Credit card consumers feeling the pinch
Nearly a third of credit cardholders have had the APR on their existing card hiked in the past year, according to research from Moneysupermarket.
Egg, Capital One, Lloyds TSB, MBNA and Barclaycard have been the main providers changing the APRs of existing customers. Egg, for example, has been behind 11% of cardholders having their APR increased, despite only having a 4.7% market share.
Steve Willey, head of credit cards at Moneysupermarket, said: “Firms writing to customers telling them their APR is about to increase will only exacerbate the debt problem in this country, especially given recent statistics showing the average cardholder has over £5,000 of easy credit at their fingertips.
“Credit card companies should play fairer with customers. People, for example, about to come off introductory 0% deals and expecting to be paying 15.9% have instead found themselves facing an APR of 27.9%, which is outrageous.
“Increasing the interest on purchases will only make those rising food, fuel and mortgage bills harder to pay, and lengthen the time it takes people to clear their debts.”
A further worry uncovered by the research was that more than one in four cardholders didn’t know if the APR on their card had increased in the past 12 months.
Willey added: “It is concerning that people aren’t paying closer attention to their credit cards. If you aren’t aware what your APR is you might be paying a lot more for your credit card purchases than you need to.
“Despite all the doom and gloom there are still many excellent 0% purchase or balance transfer deals on the market for those with a good credit rating. Customers should look closely at their current card and see how it compares with the rest of the market.”