Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Credit Card Debt and the Costs of Borrowing Are on the Rise

Personal_Finance / Credit Cards & Scoring Jun 19, 2018 - 03:11 PM GMT

By: MoneyFacts

Personal_Finance

The quarterly Moneyfacts UK Credit Card Trends Treasury Report, which studies the UK personal finance market (Unsecured Personal Loans, Credit Cards and Overdrafts), reveals that the average purchase and cash rates on credit cards have risen during Q2 2018, as has the average cash withdrawal fee. This comes at a time when credit card borrowing is on the rise, up by around £3 billion year-on-year, while £318 million of credit card debt was written off in the first quarter of 2018*.


It is more likely than not that interest rates will rise in the future, and with growing economic uncertainty, these figures alone should be a cause for concern for any consumer with mounting credit card debts.


Rachel Springall, Finance Expert at Moneyfacts, said:

“Consumer debt on credit cards is on the rise and so is the cost, in the form of interest. As per the latest statistics from The Money Charity, the total credit card debt in the UK sits at £71.1 billion, which translates to £2,613 per household on average (up from £68.08 billion, or £2,521 per household, a year prior). In addition, our own statistics show that it’s not just the average credit card purchase rate and cash per annum rate that increased over the last quarter, as cash withdrawal fees rose too.

“The rise in consumer debt is cause for concern, particularly as £318 million was written off during Q1 2018. So, while many card providers are poised to offer introductory interest-free deals aimed at customers planning a purchase, balance transfer or money transfer, customers could nonetheless struggle to repay their debt before interest applies and, in the worst circumstances, require a write-off. Indeed, UK Finance found that 55.6% of credit card balances were bearing interest in Q3 2017.

“To make matters worse, the average credit card APR rate has hit 23.1% over the last quarter (including card management fees), with the average purchase per annum rate and average cash per annum rate rising also. In Q2 2018, Bank of Scotland, Halifax, HSBC and Lloyds Bank increased the interest rates charged on standard purchases and cash by 1%, while Tesco Bank increased the cash withdrawal fee by 0.99% on its entire credit card range.

“These increases might seem small, but it’s worth noting that all these changes took place over the last three months alone, and included activity from some well-known brands. It’s unsettling news at a time when consumers would not be expecting interest rates to rise, especially if credit cards are their lifeline.

“Clearly, there are many consumers out there struggling to cope, and while credit cards are considered a common way to carry debts or switch them to an interest-free deal, this is only a temporary fix that simply buys a little more time to pay debts back. Without diligence, a growing debt could overwhelm customers and dent their chances of being approved for important financial milestones such as a mortgage. If in doubt, customers should seek out help, for instance a debt charity like StepChange, for vital support.”

*Borrowing figures acquired from The Money Charity.

moneyfacts.co.uk is a financial product price comparison site, launched in 2000, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, there is no commercial influence on the way moneyfacts.co.uk ranks products, showing consumers a true picture of the best products based on the criteria they select. The site also provides informative guides and covers the latest consumer finance news, as well as offering a weekly newsletter.

MoneyFacts Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in