The average rate on credit cards in the United Kingdom hit its highest level since 1998 and is increasing at a pace not seen since 2005, according to data from Freedom Finance shared with Finbold on August 8. As per the analysis, the average credit card rate, jumped 0.23% compared to June, to climb as high as 21.66% in July, the highest rate since December 1998, when it was at 22.19%, the latest Bank of England figures revealed. David Hendry, Chief Marketing Officer at Freedom Finance, highlighted that this year would be difficult for households, with the industry actually carrying the burden of making it easier to get more information and better products at reasonable prices. The analysis comes after data from the ONS2 last week found that around six million people were using more credit than usual because of the cost-of-living crisis as well as rising interest rates on mortgages.
Difficult year for households
Additional data points indicate that rates for £10,000 hit a six-year high, rates for £5,000 hit a four-year high, overdraft rates are still sitting at all-time highs of 35.28%, and roughly 6 million people were using more credit than usual due to an increase in living costs. Hendry stated: In general, the double whammy of surging energy costs and higher taxes have inflicted exogenous shocks on consumers’ household budgets, which is one of the main reasons credit card borrowing has risen. Help from the government and leading loan institutions could help consumers weather the storm, but more robust action is still in the planning phases it seems. Buy stocks now with Interactive Brokers – the most advanced investment platform Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
