Borrowers have been advised to switch to a zero per cent interest introductory deal in order to tackle their credit card debt.
Ian Boden-Smyth from the UK Insolvency Helpline said that doing so is one of the “easiest” ways to obtain lower repayments.
He was commenting on the news that credit card provider Egg is to hike its interest rates, something that he described as “worrying”.
Mr Boden-Smyth noted that many customers view Egg as a “good” service but added that they may lose some clients because of the move.
“It’s always been a well known fact that credit cards and store cards are the most expensive forms of credit … [lenders] have always seen credit cards as a profit-making area,” he remarked.
Egg has written to customers to inform them that their rates could increase by up to five per cent, with those deemed to be at greater risk of defaulting given higher charges.
By Jamie Price