Credit cards Updated:
Credit card companies are following the lead of mortgage lenders and factoring in greater risk, an expert has suggested.
Michelle Slade, analyst at Moneyfacts.co.uk, explained that providers are protecting themselves against the possibility of borrowers defaulting by raising interest rates.
The price comparison site has found that the average rate has risen from 16.8 per cent to 17.2 per cent in the last three months.And as consumers prepare to fund Christmas spending through this form of finance, Ms Slade advised against repaying only the minimum amount."If you can't repay in full, then even paying a small amount over the minimum could reduce significantly the amount of interest and time to repay the debt," she said.
Moneyfacts.co.uk also recommended transferring to zero per cent balance credit card deals, in order to manage debts.
Prime minister Gordon Brown has hit out at credit card companies over rising interest rates, urging them to take a more responsible approach to lending.
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