Consumers feel the pinch from rate hikes on credit cards
Rises in rates and charges over the past twelve months that have been enforced by a variety of credit cards could result in many consumers in the UK feeling the financial pinch whilst the credit card companies and banks reap millions of pounds in extra revenue. It is estimates that there are nearly seventy million credit cards in use in the UK generating expenditure of over one hundred and twenty billions pounds. And with only a percentage of card holders able to repay the balance in full on their credit card each month, many consumers could be hit with additional interest rate charges on the balance on their credit cards.
According to statistics over ten popular credit cards have enforced rises in interest rates on their cards over the past year, with many adding as much as five percent to the interest rate charged on the balance of consumers’ credit cards. Smile, Capital One, Halifax, Egg, Mint, Barclaycard, Lloyds, and MBNA are amongst those that have hiked up interest rate charges and other charges, often by a substantial amount – resulting in increased financial pressure for consumers and even more difficulties for those struggling to clear their credit card debts.
In addition to raising the interest rate charges on credit cards, many cards have also increased charges for making cash withdrawals. All of these charges could see banks and card issuers rake in a fortune in additional revenue whilst making it difficult for around forty percent of card holders – around the figure that does not repay the balance in full each month – to clear the balance on their credit cards.
Consumers in the UK are advised to keep a check on interest rate charges and other charges on their cards, and wherever possible look at cheaper and more cost effective solutions such as transferring their credit card balance to a 0% balance transfer credit card or opting for a 0% interest on purchases credit card of they do not intend to repay the balance in full each month.
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