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Cost of credit cards on the up, figures show

Thu, 13 Nov 2008

The cost of borrowing on a credit card will be significantly more this Christmas than last, according to new research.

A study by Moneyfacts.co.uk reveals that since August of this year, 16 credit cards have seen an increase in their interest rates for new purchases.

Furthermore, 12 have upped rates for cash withdrawals, while 11 now charge more in balance transfer fees.

According to the firm, the number of zero per cent balance transfer deals has also dropped over this period, meaning credit card customers will find it more difficult to refinance.

Michelle Slade, analyst at the financial website, said: "In the last three months alone, the average rate across all cards has increased from 16.8 per cent to 17.2 per cent."

This is because credit card firms are factoring in greater risk to their prices, she added.

Recently, Sean Gardener, director of MoneyExpert.com, warned that people who are planning on putting their Christmas shopping on a store credit card face paying interest rates of up to 30 per cent on their purchases.
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