There has never been a better time in recent years to compare credit cards. That is the conclusion of a new survey which has found that credit card rates in the UK have hit their highest level this century. Lender worries over increased arrears have nudged the average credit card interest rate to levels not seen since 1998.
Interest free credit cards can help you reduce your interest costs
Research has found that the average credit card rate in the UK is now 18.9 per cent; the highest level for thirteen years. Credit card rates have been increasing gradually from their average of 16.8 per cent in 2008, although rates have not been this high since February 1998 (when rates averaged 21.1 per cent.)
Consumers are being urged to compare credit cards and to take advantage of a wide range of interest free credit cards that are available. Switching balances to interest free credit cards and undertaking careful research online to compare credit cards could save you hundreds of pounds, experts say.
Credit card rate hikes mean higher payments
This recent data found that an increase in the average card rate means that if you made the minimum repayment each month on a debt of £5,000 you would pay a total of £11,372 overall. In February 2006 (when rates were at their lowest point) you would have paid £9,012.
Lenders have increased rates on purchases, balance transfer and reward credit cards over recent months due to the continuing problems with the economy. Fears over job losses and increasing bad debts on credit cards have led to many credit card providers increasing their rates.
However, if you compare credit cards there are still many great deals to be found. Interest free credit cards offer a remarkable 18.9 per cent discount on the average UK credit card rate and could save you a significant sum.