Despite the cost of borrowing getting cheaper, researchers who compare credit card costs have found that that the price of plastic borrowing is rising.
The UK base rate of interest fell by 0.25 per cent in August, but since then the average best rate credit card costs have risen 0.34 per cent.
The average best rate charged by credit card providers in October was 15.5 per cent, compared to 15.6 per cent in the same period of 2004.
The UK base rate fell 4.75 per cent to 4.5 per cent over the same period.
“For many consumers it won’t make sense that credit card firms are increasing best rate charges when the Bank of England is cutting rates,” said best rate researcher Sean Gardner.
“And if you owe money on your card it doesn’t make sense to stay with a provider which is increasing their best rate.
Consumers don’t have to accept best rate rises. There are plenty of excellent credit card offers on the market. Borrowers should be careful to compare credit cards and not just pick the cheapest card regardless of other features such as charges for balance transfer.”
Of the 180 credit cards in the UK, 50 charge less than the average best rate of 15.5 per cent.
The Cooperative Bank’s Clear Visa best rate of 8.9 per cent, Northern Rock’s Tracker Visa’s best rate of 8.94 per cent and Halifax’s Flat Rate Visa’s best rate of 5.9 per cent are particularly good.
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