Bank of England base rate and credit card firms

Credit card companies refused to reduce interest rates much to the dismay of Gordon Brown who has been urging them to cut their rates since last Thursday’s base rate cut. However the Prime Minister clearly indicated in his monthly press conference yesterday that he will be coming down heavy on the credit card companies stating he is calling for a “new, responsible approach” to lending.

According to analysts Defaqto, the average interest rate charged covering around 72 million credit cards in circulation has risen from 16.8 percent to 17.6 percent in just a year. Despite in the same period the Bank of England Base rate reducing to 3 percent from 5.75 percent.

Over the past six months Store cards have risen up by 1 percent which is at an even faster rate than credit cards, with 30 percent being charged to some store card holders.

We have grouped together credit cards for comparables on interest rates: Vanquis Bank 39.9%, Capital One Classis Visa 34.9%, MBNA Travel Amex 31.5%, NatWest Classic 16.9%, Lloyds Bank Airmiles Duo 15.9%, Bank of Scotland Mastercard 15.9%, Co-Op Bank Platinum Fixed Rate Visa 9.9%, and Barclaycard Simplicity Visa 6.8%.

Source: Guardian