Monday 23rd of November 2009
Individual voluntary arrangement (IVA) help could be required by Britons who spend on plastic after a newspaper reveals that interest rates are being pushed up by lenders.
Capital One has hiked the interest rate on its Classic credit card to 39.9 per cent, marking a seven per cent rise for cash-strapped consumers, the Daily Mail says.
With such eye-watering interest repayments, shoppers may have to seek IVA advice in order to stop their household coffers falling further into the red.
An IVA reduces the interest rate on unsecured borrowings such as credit cards, meaning repayments spread across a number of credit cards can be merged into a more manageable and single interest repayment.
Nationwide and American Express have also raised the interest rate on two of their credit cards to 19.9 per cent.
A Capital One customer tells the newspaper that the interest rate on their old myWorld Mastercard was 15.9 per cent "and its new rate is 23.9 per cent. I told Capital One it’s no better than legalised extortion. I’ve never missed a payment or paid late - what a way to treat customers".
By Kimberley Parsons
- 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
- New figures: Bankruptcy on the rise among women
