Rrrrrrrr

Credit card providers have hiked interest rates over the past eight months, dealing a hefty blow to their loyal customers.

An astonishing 12 credit card providers put up their interest rates during the first half of the year, according to data provider Moneyfacts. Culprits included American Express, Bank of Scotland, Capital One Bank, Halifax and Nationwide. To many people today credit cards are a way of life.

Michelle Slade, spokeswoman for Moneyfacts, says as well as rate hikes, providers are withdrawing competitive deals and launching new cards with higher APRs than previously seen.

“Customers who repay just the minimum will be hardest hit with an additional £408 in interest now being payable on a modest balance of £2,000,” she says.

Back in April, Which? Money slammed credit card companies, accusing them of being “out of touch with reality” after its research found most major providers had put up their interest rates and charges in the previous 12 months.

The report also found that 28 credit card providers had increased interest rates or other charges, reduced the number of days to pay or reduced the number of interest-free days over the last year in a bid to squeeze more money out of customers.

Credit card rates have gone up by an average of 0.5% but Mint, NatWest and Royal Bank of Scotland have all made significant rate hikes of 4%, while Abbey and the Post Office forced rates up by 3%.

Martyn Hocking, editor of Which? Money, says: “At a time when we’re all feeling the pinch, it’s hugely disappointing that credit card companies are choosing to put the squeeze on borrowers more than ever.

“They need to make credit cheaper and their charges more transparent and fair, rather than making it harder than ever for people to make ends meet and pay back their debts.”