Fool.co.uk is urging consumers to put pressure on credit card providers to reduce interest rates to help fight the effects of the credit crunch. Despite the recent announcement by the Bank of England to maintain interest rates at 5%, credit card rates remain extremely high.

"The Bank of England has trimmed interest rates three times since December 2007. But, despite the cuts, interest charges on outstanding credit-card balances remain disgustingly high,” comments David Kuo, Head of Personal Finance at Fool.co.uk.
According to the company the typical Annual Percentage Rate (APR) on popular credit cards is around 16%. This is over three times higher than the Bank of England base rate.

“Consumers carry about £64 billion of outstanding credit card debt, of which three-quarters is interest bearing. This means we are forking out £7.7 billion in annual interest payments, around £250 for every credit-card holder a year,” says David Kuo. “But APRs are not set in stone, and are open to negotiations. Every 1% reduction in APRs represents an extra £74 million that go into consumers' pockets to ease the credit crunch. It is a fraction of the £50 billion bailout that lenders are grabbing from the Central Bank, which is, after all, our money. Fool.co.uk therefore urges card holders to ask their providers for a reduction in interest rates. Banks may want their cake and eat it, but we deserve a slice too, since we are paying for it."