Thursday 23rd of April 2009
Credit card companies are making it harder than ever for consumers to repay their debts, it has been argued.
Research by consumer campaign group Which? revealed that many providers have been increasing interest rates and charges over the last year, despite reductions in the official base rate.
And editor of Which? Money Martyn Hocking called for an end to the practice, urging firms to "enter the real world".
Those who find that they are unable to cope with debts due to such increases may wish to seek IVA help, as an agreement with creditors could see interest charges frozen.
According to the survey, 28 providers have imposed higher rates, reduced the amount of time available to pay or cut the number of interest-free days.
While the average rate hike was 0.5 per cent, Mint, Royal Bank of Scotland and NatWest were all shown to have increased their interest by four per cent - a move that may have damaged the debt management efforts of customers.
Responding to the figures, the Liberal Democrats urged borrowers to pay off credit card debt as soon as possible.
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- Credit Action: UK's personal debt worth billions
