With the rise of the credit crunch, credit cards are becoming increasingly hard for consumers to get their hands on and are costing more as providers raise their rates to stave off the credit crisis.
People who borrow on their credit card are suffering at the hands of the squeeze on liquidity as providers have increased the interest rates they charge by an average of 0.56 per cent in the last six months, from 16.56 per cent to 17.12 per cent, according to MoneyExpert.com.
Despite the Bank of England cutting the base rate three times over the last three months – which has seen it drop from 5.75 per cent to five per cent – research has shown that rates of borrowing have continued to rise, and balance transfer fees have gone up even more, by 0.83 per cent, from 15.12 per cent to 15.95 per cent.
Those who think that they will simply move from their current provider to a more competitive deal might have to think again, because lenders are not only increasing interest rates but are also making it harder to secure credit by tightening their criteria for new customers to avoid problem borrowers who cannot repay their debts.
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