Credit card interest rate lottery

Andrew Hagger of Moneynet.co.uk comments on the latest reports that credit card rates are at their highest for over 10 years.

Whilst interest rates in the credit card market remain high, not all providers have been increasing their rates in the last 12 months.

Recently Moneynet has seen MBNA increase the pricing on its platinum and platinum rewards card by 1% to 16.9% and Barclaycard increase the rate on the platinum simplicity card by 1% to 7.8% however  last April SAGA bucked the trend by cutting the rate on its platinum card by a massive 4% to just 11.9% APR.

Whilst the average purchase rate for new customers is now approaching 19% APR, this is far from the real picture as applicants with a less than squeaky clean credit record will end up paying much more.

Just because you sign up to a card with an attractive rate, it doesn't mean it's going to remain that way, with increasing numbers of customers receiving notification that their rate is being hiked even though they are adhering to the terms and conditions of their agreement.

With the UK suffering from a surge in unemployment and the potential of more job losses to come if public spending is curtailed, just as with unsecured personal loans, it's no surprise to see rates remain stubbornly high.

However if you've been managing your card in accordance with your agreement, why should you be expected to pay a vastly increased rate to subsidise lenders mistakes and other customers bad debts?

Cardholders are having a tough enough time as it is at the present, without greedy card providers sticking the knife in.

If the likes of Saga can manage to cut their rates amidst challenging economic circumstances then you have to question why other providers are pushing their rates in the opposite direction.