Latest Debt News
Credit card rates on the rise
18/04/2008 10:56:00
Credit card borrowers are being charged more since the Office for Fair Trading (OFT) forced card providers to cut their late-payment fines, new research has shown.
Figures from financial experts MoneyFacts.co.uk has revealed that the average purchase rate on credit cards has risen to 16.4 percent from 14.9 percent.
The increase has taken place since the OFT introduced a ruling where card providers could only impose a maximum fine of £12 on consumers who made their repayments late.
Michelle Slade, analyst at Moneyfacts.co.uk, said: "Previously whereas only a select number of customers were being penalised, now all borrowers are paying the price."
According to estimates from the firm, a consumer with a balance of £5,000 on their card, who repaid 2.5 per cent of their debt every month would pay an additional £755 in interest due to the changes.
Previous research from the OFT showed that the overall value of consumer detriment in the UK economy, which estimates that the cost to UK consumers over the last 12 months was around £6.6 billion.
© Adfero Ltd