UK Money News
15th July 2008
Credit card borrowing becoming more costly
Credit card borrowers are being higher repayment rates and extra charges, a new survey has revealed.
Research conducted by finance site Moneyfacts.co.uk found that the days of lenders cutting rates to secure new business are gone and that instead borrowing on the cards is becoming increasingly expensive.
This was borne out by the finding that since April, 19 card providers have introduced purchase rate increases, while 14 have introduced hikes to cash rates.
Furthermore, eight cards have upped the charge for withdrawals and five have upped balance transfer fees.
Michelle Slade, an analyst at Moneyfacts.co.uk, said: "Some of the recent changes could perhaps be justified by lenders' increased risk and cost control as a result of the credit crunch.
"Others, such as reducing the minimum repayment, could just be seen as squeezing more profit from those who are already feeling the pinch."
She added: "With reports showing more and more consumers using their credit cards to keep their heads above water, these increases will be a big blow."
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