Credit card rates creep up 0.5%

by Gill Montia

Story link: Credit card rates creep up 0.5%

The UK’s credit card providers are still struggling with the concept of “fairness”.

A recent survey by Which? found that 28 providers have been making life more difficult for consumers, despite the cuts in the base rate.

According to the consumer group, rates have increased by an average 0.5% in the past 12 months, while the base rate has come down from 5.25% to just 0.5%.

Also in the past year, credit card providers have reduced interest-free periods and shortened the number days before settlement is due and a penalty charge kicks in.

Many providers have also increased balance transfer fees over the year.

In December, credit card companies responded to government pressure by coming up with a set of principles aimed at helping customers during the credit crisis.

From 1st January, customers should have received 30 days’ notice of rate rises, while for those taking out new credit or store card contacts the rate should remain the same for the first twelve months.