Banks ‘charging customers higher rates’

People may be placed in financial turmoil because banks are charging customers higher rates on lending.

This is despite the historically low base r…

People may be placed in financial turmoil because banks are charging customers higher rates on lending.

This is despite the historically low base rate, according to Darren Cook, a spokesperson for Moneyfacts.

Mr Cook said that there is no direct association between the rate provided by the Bank of England and the amount individuals actually end up paying.

Regarding unsecured loans and credit cards, he commented: “When the basic economic situation is unsettled there is a much higher probability of default and unfortunately that is passed onto the consumer.”

The specialist was speaking in regard to new research disclosed by Moneyfacts that showed overdraft rates to have reached their highest level in a decade.

He added that customers should shop around before choosing a bank as there are substantial differences between rates.

Figures released by Defaqto show that the average rate of an unsecured loan has risen from 8.8 per cent in 2007 to 12.9 per cent in 2010.

By Joe Shervin

track

Tell others:

shortlink