Credit Card News Barclaycard Interest Rates Soar 15058597

Barclaycard interest rates soar

05 October 2005
Barclaycard, the UK’s biggest credit card provider, increased rates by two per cent this week, affecting more than nine million customers across the Britain.

Barclays claims that it increased rates amid fears that more and more people could not keep up with their debts.

A Barclaycard spokesman said: “It is a reflection of the changing market conditions. As it gets more risky to lend we have to change our rates to reflect that.”

The credit card provider is also reducing the number of rates that is offers to customers from 30 to only five, ranging between 14.9 per cent and 27.9 per cent.

Barclays also said that rising National Insurance contributions, increased mortgage payments and current debt, meant that many customers could not keep up with repayments.

The group feels that Britain’s borrowing culture is getting out of control – consumers currently owe over £1 trillion in mortgage payments, credit card bills and other loans.

Barclaycard also reported recently that profits fell sharply by 17 per cent because of an increase in ‘bad debts’, worth £504 million.

The company reported that the figure was up over one million on the previous six months.

During the six-month period between January and June this year banks wrote off £2.7 billion of bad debt, an increase of almost 40 per cent from last year.

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Written by Editorial Team