Rise in interest could affect credit card debt

Credit card debt could be causing consumers more worry over the coming months as interest rates continue to rise.

Figures from Moneyfacts.co.uk show the average credit card rate is now at 18.7 per cent APR.

The biggest jump in interest since the beginning of the year is from Capital One Bank, whose credit card charges have risen by five per cent.

Barclaycard and Sygma Bank have seen a two per cent increase in their deals, with Egg and MBNA Europe Bank’s credit cards showing a one per cent rise in their charges.

Michelle Slade, spokesperson for Moneyfacts.co.uk, said: “Unfortunately for customers, interest rates continue to rise and are only likely to increase further as providers are forced to lose revenue from moving to a positive repayment order.”

However, the changes in the repayment order could ease credit card debts for some consumers, as the AA and MBNA have announced that borrowings charging the highest interest rates will be paid off first from September.

By James Perkins