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It is time to review your credit card arrangements?

Even though UK base rates are currently standing at 1% and set to fall as low as 0.5% later today how is it that the vast majority of credit card interest rates are still very much into double digits?

While the government has highlighted the mortgage arena and the need to encourage new credit flows in the UK, the credit card industry appears to have escaped unscathed as yet. This is despite the fact that many credit card companies have actually increased their interest rates at a time when UK base rates have fallen from 5% to the current 1%. With more and more of the UK population struggling to make ends meet how can this be justified?

This is a very difficult situation because the credit card companies claim they need to increase rates (or at least retain the current levels) to offset potentially enormous write-offs against customers who are struggling to pay their debts. However, by retaining rates at current levels they are increasing the number of potential write-offs as more and more of the UK population are being dragged into financial distress.

It is now time to review your credit card arrangements and find those 0% balance transfer agreements and reduced welcome period rates. Even by shaving just a few percentage points off your current charges it will give you more breathing space and allow you to pay off more of your debt in the short term which will then reduce your longer term liabilities.

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