Shopping around and comparing credit cards is becoming increasingly important as credit card companies squeeze consumers by hiking the average interest rate to 17.4 per cent.
More than 70 credit card
companies now charge 17.9 per cent or higher, research from MoneyExpert.com has revealed, with the highest rate reaching an astronomical 43.5 per cent, hitting consumers that are already feeling the pinch of higher food and energy bills.
Borrowers are feeling the repercussions of tighter credit conditions that are causing the credit card providers to limit who they lend to and increase rates to help profits as lending falls.
The average rate has risen 0.6 per cent since February, when it was at 16.8 per cent, despite two interest rate cuts from the Bank of England in the same time period which have seen rates fall from 5.5 per cent to five per cent.
There has also been a rise in the number of providers charging rates of 17.9 per cent or higher, which amounted to a considerably lower 59 companies in February compared to today.
However, MoneyExpert also reminds consumers that there are still competitively rated credit cards available, such as the Barclaycard Simplicity credit card
, which still offers a rate of 6.8 per cent and hasn't changed in the last six months.
"Homeowners have been the most visible losers in the credit crunch but credit card customers are also sharing the pain." said Sean Gardner, director of MoneyExpert.com. "Average rates of 16.8% were bad enough in February but despite two Bank of England rate cuts which reduced borrowing costs by 0.5% credit card average rates have increased by 0.6%.
"Mortgage customers might complain about rates of six or seven per cent but for credit card customers the charges are much higher. And with some cards charging more than 40% it really seems like the sky is the limit."
Mr Gardner urges consumers that there is still plenty of choice in the credit card market, and recommends that those paying high rates for their credit card debt should compare credit cards
and switch as a matter of urgency.
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