Credit Card Interest Rates Hit A Thirteen Year High

The Bank of England’s base rate may be set at a record low of 0.5% but this has not stopped the average credit card interest rate rising to 18.9%, the highest rate in thirteen years. Members of the British public are twice as likely to have plastic credit as people in any other western European country: This goes some way to explaining why Britons owe more than £52 Billion on credit cards.

These high interest rates would be understandable if the excess was channelled back into small businesses or loans for first time buyers, but mortgage approval rates have fallen. Some banks claim that the interest rates are a necessary precaution needed to cover bad debts as rising unemployment and pay curbs make lending more risky.

Critics have argued that the bank’s priorities are their partners’ bonuses and these exorbitant interest rates deliver the massive profit margins needed to pay them.

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