Lenders 'tighten up' on credit cards

Wednesday, February 17th 2010

High rates for borrowing money on credit cards could be because banks are trying to tighten up on lending.

This is according to the director of Ark Financial Planning Phil Perry, who said that lenders have already made it more difficult to borrow money on mortgages.

"People keep saying they are trying to kick-start the economy, but they're not really … It is people that are still in that vicious circle that are going to get stung," Mr Perry added.

His comments follow research from Moneyfacts, which found that credit card rates are at their highest for 12 years.

At the end of the 1990s many providers were competing for customers and dropped their rates, but this trend ended in 2006 when people were struggling to pay back debt.

Spokesperson for the organisation Michelle Slade explained that there are, however, still competitive deals to be had on introductory purchases.

Looking at transferring to a different lender may also be a money-saving move, she advised.