Wednesday 10th of June 2009
Borrowers who find that credit card rates increase have been advised to question their lender.
Martyn Saville of consumer campaign group Which? explained that providers should be told to justify such changes and revert to the original rate if they are unable to do so.
He also noted that customers whose rates increase have the right to cancel the card and pay it off at the old level, which could help avoid the need for solutions such as debt management plans.
With Moneyfacts.co.uk having found that average charges increased by nearly two percentage points in the last two years, Mr Saville noted that many people have little choice but to pay high rates.
Debt management plans can help borrowers to reduce what they owe and make repayments at a more affordable level, but the expert suggested some of the pressure could be lifted in the future.
"As soon as house prices start to recover or secured or even unsecured loans start to free up a little bit more, credit card companies will have to become more competitive," he remarked.
- Debt consolidation loans falling, figures show
- Britons 'changing attitudes' towards debt management
- Homeowners 'more concerned with debt management'
- Low interest rate 'contributing to debt management efforts'
- Debt management growing in importance, survey finds
- Cost of living 'still up' despite inflation fall
