Credit continues to get more expensive
Michelle Slade, analyst at Moneyfacts.co.uk, comments:
“With increasing costs on all household bills, many people are relying on their credit card to get by each month. But these people are going to find themselves out of pocket as purchase and cash rates, along with charges, continue to increase.
“Since the beginning of the year there have been numerous increases to rates and charges, with some cash rates being increased by over 7% and purchase rates by as much as 3%. Latest Moneyfacts.co.uk research reveals:
- 22 purchase rate increases
- 15 cash rate increases
- Over 30 increases to fees (including balance transfer fees, cash withdrawals fees and foreign usage loading)
Full details of the increases are shown below
“The number of increases to purchase APRs is quite phenomenal. Normally credit card providers avoid such increases as these are the rates customers see first. It goes to show just how tough credit conditions have become for the institutions and this is being passed onto consumers.
“For example anyone with £5,000 of purchases on the Nectar Credit Card AMEX repaying the minimum 2.5%, min £5, the 3% increase will find themselves paying an additional £1,823.75 in interest over the life of the debt.
“Credit card providers are tightening their criteria and anyone with a less than perfect credit history may struggle to get the most competitive deals. However, for those with an exemplary credit record there are still good deals to be had.
“The first thing to do when looking for a new credit card is to look at how you will use the card. If you have an existing debt on a card, it may be worth considering a 0% balance transfer deal. Currently balance transfers best buys are topped by Virgin Money’s MasterCard which offers 0% for 15 months. Alternatively, if you are looking to make some new purchases, you may wish to consider a 0% introductory purchase deal. HSBC’s Bank Credit Card MasterCard is currently offering 0% for 12 months. Anyone looking for a low rate card will find Barclaycards Simplicity Visa at 6.8% an attractive deal.
“Rates and charges on credit cards are only likely to continue to increase in the months ahead. If you are not happy with you current deal, make sure you shop around for a better one.”
Purchase rate increases
Card |
Rate Jan 2008 |
Current Rate |
Increase |
Mint MasterCard |
12.9% |
14.9% |
+2.0% |
Barclaycard Platinum Cashback MasterCard/Visa and Platinum Long Term Balance Transfer MasterCard/Visa |
14.9% |
15.9% |
+1.0% |
Smile Classic Visa |
18.9% |
20.9% |
+2.0% |
Smile Current Account Customer Classic Visa |
15.9% |
16.9% |
+1.0% |
Smile Gold Visa |
16.9% |
18.9% |
+2.0% |
Smile Current Account Customer Gold Visa |
11.9% |
12.9% |
+1.0% |
The Nectar Credit Card AMEX |
15.9% |
18.9% |
+3.0% |
Capital One Bank Platinum MasterCard |
9.9% |
12.9% |
+3.0% |
Debenhams MasterCard |
18.9% |
19.9% |
+1.0% |
Post Office Classic MasterCard |
16.9% |
17.9% |
+1.0% |
NatWest Credit Card MasterCard, Gold Card Account MasterCard, Platinum MasterCard, |
12.9% |
15.9% |
+3.0% |
Royal Bank of Scotland Classic MasterCard/Visa, Gold MasterCard/Visa and Platinum MasterCard/Visa |
12.9% |
15.9% |
+3.0% |
ASDA MasterCard |
16.8% |
17.8% |
+1.0% |
Tesco Bonus MasterCard/Visa |
14.9% |
15.9% |
+1.0% |
Yorkshire BS Classic Visa |
15.4% |
17.9% |
+2.5% |
Source: Moneyfacts.co.uk 2.6.08 |
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Cash rate increases
Card |
Rate Jan 2008 |
Current Rate |
Increase |
Mint MasterCard |
24.942% |
27.948 |
+3.006% |
Debenhams MasterCard |
22.9% |
29.947% |
+7.047% |
Egg Visa |
22.9% |
24.9% |
+2.0% |
Post Office Classic MasterCard |
20.94% |
24.942% |
+4.002% |
Post Office Platinum MasterCard |
20.94% |
22.941% |
+2.001% |
ASDA MasterCard |
25.517% |
28.385% |
2.868% |
NatWest Credit Card MasterCard, Gold Card Account MasterCard, Platinum MasterCard, |
24.942% |
27.948% |
+3.006% |
Royal Bank of Scotland Classic MasterCard/Visa, Gold MasterCard/Visa and Platinum MasterCard/Visa |
24.942% |
27.948% |
+3.006% |
Source: Moneyfacts.co.uk 2.6.08 |
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Charges increased
Card |
Charge Type |
Rate Jan 2008 |
Current Rate |
Increase |
Aqua MasterCard |
Foreign usage loading |
2.75% |
2.95% |
+0.20% |
Tesco Clubcard MasterCard and Bonus MasterCard |
Balance transfer fee |
2.50% |
2.90% |
+0.40% |
Cash advance fee |
2%, min £2.50 |
3%, min £3 |
+1.00% |
|
Barclaycard Flexi-Rate Visa and Platinum MasterCard/Visa |
Balance transfer fee |
2.50% |
2.90% |
+0.40% |
British Airways American Express Platinum AMEX |
Account Fee |
£120pa |
£150pa |
+£30 |
Alliance & Leicester MasterCard/Visa and Moneyback Reward MasterCard/Visa |
Foreign usage loading |
2.75% |
2.99% |
+0.24% |
Capital One Bank Platinum MasterCard |
Balance transfer fee |
1.70% |
3.00% |
1.30% |
ASDA MasterCard |
Cash advance fee |
2%, min £2.50 |
3%, min £3 |
+1.00% |
Clydesdale Bank Gold MasterCard |
Balance transfer fee |
2%, min £2 |
2.5%, min £2.50 |
+0.50% |
Yorkshire Bank Gold MasterCard |
Balance transfer fee |
2%, min £2 |
2.5%, min £2.50 |
+0.50% |
Egg Visa |
Foreign usage loading |
2.65% |
2.75% |
+0.10% |
American Express (All cards) |
Default fees |
£8 |
£10 |
+£2.00 |
BMW Card AMEX |
Default fees |
£8 |
£10 |
+£2.00 |
MBNA (All cards except AMEX) |
Foreign usage loading |
2.75% |
2.99% |
+0.24% |
Virgin Money MasterCard |
Foreign usage loading |
2.75% |
2.99% |
+0.24% |
SonyCard MasterCard/Visa and Sony Platinum MasterCard/Visa |
Foreign usage loading |
2.75% |
2.99% |
+0.24% |
Citi (All Cards) |
Cash advance fee |
2%, min £5 |
3%, min £5 |
+1.00% |
Sky Skycard MasterCard |
Foreign usage loading |
2.95% |
2.99% |
+0.04% |
NatWest Credit Card MasterCard, Gold Card Account MasterCard, Platinum MasterCard, |
Cash advance fee |
2.5%, min £2.50 |
3%, min £3.00 |
+0.50% |
Royal Bank of Scotland Classic MasterCard/Visa, Gold MasterCard/Visa and Platinum MasterCard/Visa |
Cash advance fee |
2.5%, min £2.50 |
3%, min £3.00 |
+0.50% |
The Co-operative Bank |
Balance Transfer Fee |
2.5%, min £5 |
3%, min £5 |
+0.50% |
Source: Moneyfacts.co.uk 2.6.08 |
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Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.
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