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Credit card rates 'are not justified and should be challenged'

Increased credit card rates are not justified, according to a senior researcher at the largest consumer body in the UK.

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11 June 2009

Credit card rates 'are not justified and should be challenged' ”

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The senior researcher at Which? said that some lenders could be looking to charge credit card holders more since they are making less money from their other activities such as current accounts.

Credit card holders should question the increased rates, senior researcher Martyn Saville suggested.

"There is an element of the effect of the credit crunch still carrying on because it's expensive for them [lenders] to borrow, but the rate at which they lend to each other has come down in the last six months," Mr Saville continued.

However, credit card rates should fall in the future as lenders have to become more competitive, the senior researcher predicted.

The comments come as research from Moneyfacts.co.uk shows that the cost of borrowing has increased in the past two years by almost 2%, up to 18.1% from 16.3%.

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Credit Cards	0% Balance Transfers	0% Purchases	APR Representative (Variable)
	Tesco ClubCard Credit Card
	9 months	15 months	16.9^%
16.9% APR representative (variable). Based on a credit limit of 1200 and purchase rate 16.9% p.a(variable).
	Virgin Credit Card
	20 months	3 months	16.8^%
16.8% APR representative (variable). Based on a credit limit of 1200 and purchase rate 16.8% p.a(variable).
	Barclaycard Platinum with BT
	22 months	3 months	17.5^%
17.5% APR representative (variable). Based on a credit limit of 1200 and purchase rate 17.5% p.a(variable).
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