Credit Card Costs On The Increase
All those millions of people who did a large percentage of their Christmas shopping by using a credit card, or those individuals with an outstanding balance on their cards, could be in for a nasty shock when they receive their usual bill through the post this month.
New research has shown that the average interest rate which is being charged on a credit card is steadily increasing, making the debt more expensive for those borrowers with an outstanding balance on their cards. In December last year, the average cost of a credit card rate reached its highest level since September 2006.
The average interest rate on a typical credit card currently stands at 16.28 per cent APR (Annual Percentage Rate) for the month of December, whereas it was just 15.89 per cent for the previous month. Twelve months earlier, in December 2008, the rate was just 15.58 per cent. Despite the fact that many people are focusing on repaying their personal loans and other debts, credit card debt is still increasing, with many individuals placing the cost of Christmas on their cards and a growing number of people using their credit cards to pay their mortgage or homeowner loan.
A large number of individuals are likely to get a nasty shock when they open their credit card statement this month and this will encourage many people to either pay off their outstanding balance, or to look for alternative methods of borrowing the money. Although they are not as common as they used to be a couple of years ago, many borrowers will be looking for a new credit card offering a balance transfer deal with a low interest rate. The other option for many people will be to consider a debt consolidation loan, which could allow them to repay several cards within one loan. For anyone looking at these options it is advisable to seek professional financial advice on the matter first to ensure you are not actually making the situation worse.
