IVA & Debt Consolidation Advice

A new report is showing that numerous credit card companies have increased their rates over the past few months. This data came from the financial data firm, Moneyfacts, who reported that 19 leading credit card companies have increased their rates.

Some of the most well known credit card companies who have increased rates include American Express and Barclaycard, as well as many of the United Kingdom's most popular banks including the Halifax, HSBC, NatWest and Lloyds TSB.

It was shown that American Express may have raised rates more than 6% on certain credit cards, while other credit card companies may have increased rates higher.

"While it may be argued that the 0.25% increase to base rate in August resulted in some of these increases, with rises of up to 12.1% it is clear other forces are at play," said Moneyfact's Lisa Taylor. Rising bad debts and the lost fee revenue has left many providers with no choice but to look for alternative avenues for income. And it seems, raising interest rates is a popular option."

The credit card industry has been under scrutiny over the past few years. In March, the Competition Commission created new rules to protect customers form overcharging. The government also required that banks give clearer information about credit cards and cheques, and all of the fees involved.

Even more amazing is that while credit card debt had made up a major percentage of debt all across the world, so far, just £55 billion of the national debt, over £1 trillion, is due to credit card debt.

The British Bankers Association has reported recently that, “borrowing on credit cards had fallen for the fourth month in a row, the first time there has been such a decline.”

In 2005, the Association of Payment Clearing Services (APACS) predicted that this year credit card use would fall for the fist time in the history of the United Kingdom, and so far, it looks as if they were correct. The increase in rates won’t help in attracting new customers to opt for credit cards.