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Further increase in credit card rates

The most recent quarterly report from the Bank of England shows there has been a rise in average credit card rates even though the base rate has remained at its all time low level of 0.5%. The average credit card rate now stands at 18.7% which is up from 15.2% in July 2007. Over this period the bank base rate has actually fallen from 5.75% to where it is now which has given the banks a much larger cushion.

The Bank of England said that losses on credit card lending have been the major factor in bring the rates up. There has been a further rise this year in the amount of credit card lending that has been written off in the UK by banks and other financial institutions.

The report claims that more than a quarter of UK households are now struggling to pay their credit card bills. Those with unsecured debts that are not covered by specific assets in the event of default are struggling most.

There are however still a number of credit card companies offering good rates. There are a range of 0% and other low interest offers out there. The main requirement for these cards is that you have a good credit history.

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