Despite the cost of interest rates on loans falling to the lowest in fifty years, banks have increased the interest rates on credit and debit cards. The interest rates on high street shop cards have been highlighted in recent months, and have been accused of excessive rates to consumers. Thus far however, banks have not been featured, yet they have escaped scrutiny for not passing on interest rate cuts to their credit cards.
The Bank of England has cut its base rate from five to three percent in the last few months, yet the average APR (annul percentage rate) for credit cards has climbed in the same period. A study shows that the average interest rate on cards has risen by 0.4%, with some banks rates even higher. Charges for withdrawing money abroad has also risen, causing speculation that banks are trying to recoup the cost of debt and fraud.
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