Credit card rates finally rise

By MoneyhighStreet Staff. Published on July 15, 2008 This post currently has no comments.

New research has shown that the credit card market in the UK has finally been affected by the global credit crunch.

Website Moneyfacts.co.uk reported that the credit card sector in the UK had seemed to have remained isolated from the financial turmoil that has gripped the rest of the market since late in 2007.

However, it noted that since April of this year, there have been signs that lenders are being forced to react to the global problems and pass on higher costs to credit card customers.

It noted that in the last quarter, 19 cards have increased their purchase rates and 14 have seen their cash rates rise.

What''s more, five credit cards have put up their balance transfer fees and one has even increased its account fee.

Michelle Slade, an analyst at Moneyfacts.co.uk, explained: "Until recently the credit card market had seemed to continue along as it always has. Lenders extended introductory deal dates as they always have, some lenders amended their rates, while others increased charges.

"However, since April we have seen a marked increase in the number credit cards increasing their rates and charges.

"With reports showing more and more consumers using their credit cards to keep their heads above water, these increases will be a big blow."

Recently, Sainsbury''s suggested that 42 per cent of consumers plan to use credit cards to fund sales purchases.