Banks putting rate up, not down, report warns

Thursday 20th November 2008

A number of the leading UK high street banks are moving to take advantage of the current economic crisis by putting their credit card and personal loan interest rates up, it has been reported.

Over the past 12 months alone, the Bank of England has cut the base rate of interest by 2.75 points in a bid to help out struggling consumers and stave off recession.

However, according to new research cited by the Daily Mail, most lenders have failed to pass on these cuts to their customers, and some have even raised their own rates, thereby pushing people even further into debt.

And this problem is likely to be exacerbated over the next few weeks, with the New Year likely to see a rise in demand for debt-management solutions such as IVAs and even for bankruptcy.

"The concern is that more people could turn to them in the run up to Christmas, and over the next year, as the recession begins to set in and consumers find themselves more cash strapped," Louise Bond, personal safety manager at uSwitch explained.

"However these quick fix solutions could turn into serious financial hangovers as they are one of the most expensive ways for people to get their hands on cash."

News article brought to you by SimpleIVA – UK IVA specialists.

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