The average interest rate (APR) on UK credit cards has soared to 18.8%, up from 14.8% in 2006, according to new research.
The credit card figures from Moneyfacts come as Bank of England base rate has remained at 0.5% for almost a year and Libor, the rate at which banks lend to each other, has fallen from over 6% two years ago to just 0.64% today.
Check your credit card’s interest rate and switch now
Martyn Saville, Which? credit card expert, commented: ‘These new figures are staggering at a time when both base rate and interest rates for savers remain historically low. Credit card users in the UK are being punished for the banks’ poor lending decisions in the past and for lenders’ need to rebuild their own balance sheets and profit margins.
‘It has never been more important to check the interest rate you’re paying and, in many cases, to switch to a better credit card. If you have existing debt on your credit card, it’s worth considering a 0% balance transfer deal or a low-rate life-of-balance offer. Virgin currently offer 16 months at 0%, while MBNA and Leeds Building Society both offer life-of-balance deals at just 5.9% plus a 3% transfer fee.’
For all the latest credit card deals, check out Which? Best Rate credit cards. To find out which card is best for you, read the free Which? guide to choosing a credit card. And if your credit card provider puts up the interest rate on your existing balance, you have the right to reject the increase. Find out more by reading the Which? guide to your credit card rights.
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