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Credit cards rates on the up

Wed, 14 Jan 2009

Credit card costs are on the way up as firms look to protect themselves against bad debts, it has been claimed.

BBC News reports that since a clampdown on penalty changes, credit card firms have been upping rates to make sure they get their money back.

Writing for the news provider, Simon Gompertz of the programme Working Lunch, explained that more credit card firms are using risk-based pricing.

"Increasingly, card providers have been charging a higher interest rate if they think you are a higher risk, both when you apply and while you have the card," he said.

This means that credit card customers who miss payments could see their interest suddenly increased, Mr Gompertz warned.

Yesterday, Which? hit out at the Amex BA Premium Plus credit card dubbing its interest rate of 46 per cent "ridiculous".

Martyn Saville, the body's credit card expert, claimed that companies are now charging what they think they can get away with, rather than a fair price.
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