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Credit card costs rising

Credit card costs rising

Category: Credit cards

Updated: 13/01/2010
First Published: 13/01/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Regular users of credit cards have been warned their next statement might carry a nasty surprise: interest rates have leapt to their highest level since September 2006.

The average cost of credit card borrowing reached 16.28% in December, up from 15.89% the previous month.

In December 2008, the rate had been lower still, at 15.58%.

The figures will come as a bitter blow to those people who bought their Christmas presents on their credit cards and should also be of considerable concern to the one million householders who were recently revealed to have used their credit card to pay their mortgage or rent in the last 12 months.

However, it is hoped that the news will spur borrowers on to find the best credit cards in the market.

Recent research suggested millions of consumers plan to transfer their credit card balance in the new year, to take advantage of zero per cent balance transfer deals and pay off high levels of unsecured debt.

More than 4.5 million bank and building society customers said they were planning to move in excess of £3.2 billion between credit cards in the first three months of 2010 – a third more than in the same period last year.

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