Reno Charlton, award-winning writer, shares her financial expertise as a contributing columnist for Credit Card Comparison, where you can compare instant decision credit cards.
When we take out a credit card most of us do our best to try and find a card that offers a competitive rate of interest on borrowing. However, the problems can occur when credit card providers start to hike up the interest rates that they charge on their cards, although this is something that many people may not have imagined happening given that the base interest rate has plunged to an all time low of just 0.5 percent over the past seven months.
However, it seems that for many credit card providers reducing the credit card interest rate in line with Bank of England base rate movement is not an option, and whilst the base rate has plummeted to just a tenth of the level that it was at around ten months ago credit card interest rates have continued to soar. In fact, it has been reported that the average credit card interest rate has now smashed through the eighteen percent barrier, leaving struggling consumers to deal with crippling interest payments in what is an already difficult financial climate.
The higher interest rates could mean that you pay far more in interest over the term of the debt. For example, if you have a credit card balance of two thousand pounds, and you make only the minimum repayment each month, you could pay over four hundred pounds extra in interest alone over the term of the debt based on these higher interest rates.
One industry official has recently commented on the situation, stating: "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 customers fight to keep hold of their property. With only a handful of cards on the market linked to tracking base rate, very few have seen any benefit from the current all time low base rate."
Those that do find that their credit card interest rates have rocketed may find that it pays to compare credit cards and find a more affordable credit card deal, or better still a 0% balance transfer credit card deal, as there are still some around. This could save the average consumer a small fortune in interest if they have a current balance outstanding.
- Related Videos
- Related Articles
- Ask / Related Q&A
- Loans. Mortgages. Credit Cards. Interest Rate Rises Around The Corner.
- Eighteen percent barrier broken with credit card rates
- Has Your Credit Card Rate Gone Up?
- Credit Cards - The Basics You Need to Know
- Don't save - pay off your credit card debt
- Bank of England to inject £50bn into economy
- The Bank of England holds rates at record low
- Apply Online | New England Patriots Credit Card




What Is A Good Credit Score - Understanding The Information In Your Credit Score
By: Linda D. Gilbert | 28/11/2009A loan-provider needs to thank the credit rating system for getting a complete credit history of the loan-seeker on its report to help him evaluate the propensity to repay promptly as mutually agreed. One is expected to be reasonable enough to realize that as lender’s priority is to earn profit, he cannot endanger his money on a proposer whose rating clearly reflects his inability to repay.
Where to Get Your Free Credit Report And Have A Happy Christmas
By: Christie Love | 28/11/2009Christmas doesn't have to be a depressing just because you don't have cash. As long as you're responsible about paying back your debt on time, you shouldn't worry about spending a few dollars on Christmas gifts for yourself or others.
Get Rid Of High Payments With Credit Card Debt Elimination
By: Emily Onedge | 27/11/2009You can get rid of high payments with credit card debt elimination. High credit card interest rates and huge bank fees can put you in big financial problems before you know what hit you.
Auto Loan Shopping Tips 101...Let The Class Begin!
By: Frank A. Williams Jr. | 27/11/2009What do you do when you are about to go on the bad credit auto loan shopping voyage? In this article you will get some insight on where to start how to start and what to do! I help you take some basic steps that can raise your chances of getting an auto loan approval, even if you have credit problems.
Why I Made The Decision To Get a Free Copy Of My Credit Report and Advice For You
By: Amy Patterson | 27/11/2009From first hand experience, I explain why I got a free copy of my credit report, and I summarize the reasons why you should too.
How Can I Obtain My Free Credit Report and Why Is It So Important?
By: Amy Patterson | 27/11/2009Have you wondered why it is considered so important to obtain you free credit report? This article explains exactly why.
Shop According To Your Budget
By: Shailesh Smith | 27/11/2009Are you a kind of person who swipes credit card whenever you find something great? You use your credit card but at the end of month, you are not capable of paying the generated bill. Majority of people will nod their head while reading this statement, so you are not the only person facing this problem, you actually belong to the majority of those group.
Associated with Free Credit Check Online
By: Manish latke | 27/11/2009Free-Credit-Reports.com: Get 3-in-1 FREE credit report and credit score online instantly. See your credit report from Equifax, Experian and TransUnion.
Credit cards make it easy to give to charity
By: Reno Charlton | 12/11/2009 | CreditIn the ongoing economic downturn and the difficult financial climate giving to charity is nowhere near the top of the agenda for most people, despite their good intentions. However, a recent report has shown that many people have found a great way around this problem enabling them to give to charity without having to overstretch their own finances in order to do so.
Budgeting is vital to repay credit card debt
By: Reno Charlton | 02/11/2009 | CreditWith credit card defaults having increased as a result of the financial crisis and credit crunch, and with some experts predicting that defaults could rise further, industry officials have reiterated the importance of ensuring that you budget property to make sure that you can cope with and repay your credit card debt.
Don't spend your lifetime paying off a credit card bill
By: Reno Charlton | 21/10/2009 | CreditMaking minimum repayments on a credit card debt can be a risky business at the best of times, and cardholders that do this tend to be hit hard in terms of interest and run a higher risk of exceeding their credit limits. However, some lenders have been reducing the minimum repayment for cardholders, and whilst this may seem like a good thing it actually means that you could spend your lifetime paying off your credit card debt.
Nobody Benefiting from Advertised Broadband Speeds in UK
By: Reno Charlton | 15/10/2009 | CommunicationWhilst many broadband providers in the UK may try and tempt customers by offering high headline speeds with their broadband packages, it has been revealed that in actual fact no consumers in the UK are receiving the broadband speeds being advertised by their providers, with most consumers getting nowhere near the advertised speeds from their providers.
Watch out for rising number of credit cards with annual fees
By: Reno Charlton | 13/10/2009 | CreditWith credit card firms finding a range of different ways to try and recoup financial losses consumers may want to keep their eyes peeled for a variety of credit cards that may start charging annual or monthly fees to cardholders. One credit card provider has already launched a card with a monthly charge, and many industry officials feel that this could be the start of a trend that many other credit card providers will follow.
Do you need faster broadband?
By: Reno Charlton | 08/10/2009 | CommunicationWe all want to achieve the best speeds possible when it comes to our broadband connection, as slower speeds can cause frustration and inconvenience to say the very least. Whilst the general rule of thumb is that the faster your speed the more you will have to pay it is important to remember that there are also other things that can affect the speed of your broadband.
Credit card industry could face wide ranging bans
By: Reno Charlton | 08/10/2009 | CreditThe credit card industry has faced a lot of controversy over recent years for a variety of reasons, and has been accused of treating its customers unfairly and charging too much in terms of fees, charges, and interest rates. It has recently been revealed that credit card companies could face wide ranging bans over the way that they operate, and this includes the banning of unsolicited credit card cheques, which has already been brought in.
Which is the right broadband package for you?
By: Reno Charlton | 28/09/2009 | InternetThe wide range of broadband packages that are available from the variety of Internet Service Providers these days means that there is something to suit all needs, but it is important to bear in mind that the needs of different individuals will vary based on what they intend to use their internet connection for.