Belmont Thornton Logo
PPI Claims - About PPI

PPI Claim News

Loan Protection: Credit card borrowing rises despite low base rate

The cost of borrowing on a credit card has increased despite the historically low interest rate, according to new research.

The Bank of England's latest Trends in Lending report has revealed that the average interest rate on a credit card is now 12.38 per cent, compared to 12.08 per cent in June 2008.

Credit card providers were therefore charging seven per cent more than the interest rate two years ago, but are now charging nearly 12 per cent more than the current 0.5 base rate.

Lenders also receive a significant profit with personal loans as the current margin between the base rate and loan rates is six per cent compared to 4.4 per cent in June 2008.

Louisa Parker, head of research and policy at the Money Advice Trust, said: "The cost of borrowing on a credit card has remained entirely decoupled from the Bank of England base rate, meaning the margins that credit card companies are making have increased significantly over the last couple of years.

"This also means many consumers will have seen little or no benefit from the low base rate."

Ms Parker advised lenders to consider the base rate when pricing their products.

Posted by Charles Baker

Charles is a reputed financial analyst with almost decades of experience under his belt. ADNFCR-2776-ID-800032978-ADNFCR

Bookmark and Share
Tell a Friend
blog comments powered by Disqus

Enquiry Form

First Name 
Last Name 
Mobile Phone
Home Phone
Address Line 1 
Post Code 
Claim Back Mis-Sold PPI Button

Belmont Thornton Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities; our registration is recorded on the website number 18273

Belmont Thornton Limited is incorporated in England and Wales, Company number 6621233, whose head office at Unit B11, Kestrel Court, Harbour Road, Portishead, Bristol, BS20 7AN and registered office at Harwood House, 43 Harwood Road, London, SW6 4QP.

Belmont Thornton Limited is registered with the Information Commissioners Office. Registration number Z1728023.

Please note that calls may be monitored for the purposes of staff training.

* Belmont Thornton operates on a "No Win No Fee" basis. This means that there are no upfront costs to pay. Our fee only becomes payable on a successful outcome of a claim. A cancellation fee is payable if you decide that having instructed Belmont Thornton to act on your behalf, and after 14 days of signing your Letter of Authority, you do not wish to continue pursuing your claim with us. The cancellation fee is the reasonable costs incurred for the work undertaken. Please see our terms of engagement.

By using our web-site, you agree that we can place the types of cookies described in our privacy policy on your device.Hide