Crunch spreads to cards
The credit crunch has hit the card market in the form of increased rates and fees, comparison site Moneyfacts has revealed.
Research from the site shows there have been 19 increases to credit card purchase rates since April. There have also be 14 cash rate increases, five cards that have increased balance transfer fees and two minimum repayment reductions.
Michelle Slade, analyst at Moneyfacts, indicated the increases to some credit card purchase rates was surprising since this is the headline rate consumers use to compare cards. “Many card companies have preferred instead to increase the rates and charges that many consumers may take little notice of when selecting a card,” she added.
“Some of the recent changes could perhaps be justified by lenders’ increased risk and cost control as a result of the credit crunch. Others, such as reducing the minimum repayment, could just be seen as squeezing more profit from those who are already feeling the pinch.”
Slade added that such increases would “be a big blow” to consumers using credit cards to keep their heads above water at the moment.