Credit card interest rates hit an average of 18% - how can this be justified with an all-time low base rate of just 0.5%?!

Crosshills, West Yorkshire -- (SBWire) -- 02/24/2010 -- Following on from our news story last week – highest credit card interest rates since 1998 – A former advisor to the Government has said that credit card rates ‘cannot be justified.’

Ros Altmann is calling for an enquiry into how the credit card industry sets interest rates. He says that credit card interest rates of around 18 per cent, the highest for over a decade, are excessive and he thinks there could be the need for a regulatory body to oversee how interest rates are set.

The Government is looking into some of the charges credit card companies make but this does not include the setting of interest rates.

The credit card companies say that failed payments during the recession are the reason why interest rates are so high. However, this is becoming harder to accept considering the all-time low Bank of England base rate of 0.5 per cent.

Craig Gedey, Marketing Manager at Debt Advisory Line said: ‘Higher interest rates simply mean higher repayments for customers.’

‘Interest rates of 18 per cent will surely only force the credit card customers already struggling with repayments, further into debt?’

‘Higher interest rates may also tip some customers ‘over the edge’ and into a situation where they miss a payment.’

‘Anyone who is struggling to keep up with repayment on any debt can speak to us at the Debt Advisory Line. We know how stressful debt is and work to help people under pressure pay off their debts by providing Expert Debt Advice.’