Lending rates on credit cards have increased by almost a third over the last two years, new research has discovered, although many borrowers may be underestimating the true extent of the rises.
According to figures from financing website uSwitch.com, typical credit card lending rates in March 2007 are 27.06 per cent annual percentage rate, up 30 per cent on the 20.8 per cent recorded in May 2005.
However, the report suggests that most people are unaware of the difference between annual percentage rates and the recently introduced per annum rates, with the latter failing to take into account compound interest or associated charges.
As a result, it is suggested that consumers are assuming that lending rates have only increased 14 per cent to 23.79 per cent.
Commenting on the findings, Nick White, director of financial services at uSwitch.com, said that the move among credit card lenders "to increase cash rates and charges could be seen as an exploitation of the average consumer's lack of understanding of how their charges are calculated".
According to financing charity Credit Action recently, the total amount of personal debt among consumers in the UK stood at £1.25 trillion in December 2006.
News Side
Lending rates rising ahead of expectations, financing study suggests
Mon, 19 Mar 2007
Recommended links
Find the best credit card deal for youCompare credit card providers
Credit card search and comparison tool
Find a card to suit your circumstances
Credit card tips
Financing report suggests why people are hitting their savings accounts
Credit card users warned about hidden conversion costs abroad
news content
Search
