A new investigation into credit card charges has revealed that they are still on the increase. The latest statistics, published by moneyfacts.co.uk, show that charge rates have shot up by over two percentage points to more than 18% in the last two years - despite the Bank of England’s base rate falling to an all time low of just 0.5%.
The report also highlighted a gradual decline in competitive deals being offered to consumers in the last two years, with lenders opting for high APR products instead.
This latest research comes hot off the heels of another investigation by the same company, which discovered that interest rates on personal loans have increased by nearly 50% over the last two years, which is causing borrowers to accumulate even more debt.
Michelle Slade, analyst at Moneyfacts.co.uk, suggested that all fingers were pointing at the recession. “Rising unemployment means that the risk of customers defaulting on their card repayments has increased, which is being passed on through higher rates. If customers are struggling with repayments, unsecured lending is one of the first casualties as consumers fight to keep hold of their properties”