Although the Bank of England slashed the base rate to 0.5 per cent it hasn’t stopped credit card lenders to lower their interest rates. On the contrary, many of the leading banks have recently raised the interest rates. The problem with this is that many people that are not well off and are facing other debts as well are the ones being the hardest hit.
The rates are part of a broader policy of risk based pricing. This means that poorer people and the ones in debt will be facing higher interest rates on their credit cards. People that are more well to do will generally see a lower interest rate on their credit card purchases.
Statistics are showing that a poorer individual borrowing from £1000 to £3000 may have an interest rate of more than twenty per cent. A more well off person with a better income might only be paying a fifteen per cent interest rate on the same amount of money.
