Credit Card Rates Seem To Be Increasing After Lower Rates for A Couple of Years
Interest rates on credit card balances have been going down after hitting a high level in 2010 owing to effects of the credit crisis. Consumers have enjoyed lower rates in the last two years but this situation seems to be taking a different direction. The interest rates charged on credit card balances determines how users are able to manage the use of these cards. Higher interest rates can cause problems on personal finances.
Considering that credit card debt is the number one debt burden for many citizens, it means that any pressure to increase the rates could deal consumers a blow. Credit cards are important in the day-to-day financial needs since users can make purchases and even obtain loan facilities to meet their pressing needs.
However, it seems that buying goods and services with these cards is getting more costly and this is after Danske Bank pushed up its interest rates. What this means is that consumers will have to pay for on their credit card balances, something that may result to negative effects on the spending patterns. The increase in credit card rates by about 2 percent by Danske is an indication that consumers may need to prepare for hard times ahead.
With many reward card programs being introduced in the market, the consumer has a much wider choice to make regarding the best card. However, if the trend continues to see an increase in the interest rates, this could put the consumer in a difficult situation considering that the effects of the economic crisis are still impacting on credit card balances.
Before this hike, the Danish-owned bank had two of the best value credit cards topping in the list of the top three. Danske Bank recently changed its brand name from National Irish Bank and the increase in interest rates was the first in a period of more than three years. Experts predict that other banks could also follow suit and hike their interest rates.
A similar move was witnessed with the Bank of Ireland, which extended a card interest rate rise of close to 4 percent at the end of 2012 during the time when consumers do more shopping. Similarly, last summer, MBNA also increased its card rates by the same margin of about 4 percent. These changes could mean that the consumer will have to adjust to meet the costs.
For consumers still ailing in credit card balances, it may be a difficult time to cope with. For the credit card users to ensure that they do not suffer more, they need to ensure that they pay their balances and bills on time. Any late payment could make things worse thus causing more troubles.
Bearing in mind that missed payments can increase interest rates by up to 15 percent or even more, it means that with just a few missed payments, the balance could attract very high interest rates, which may call for a refinancing. Luckily, there are many options available for consumers to refinance their credit card debts such as the peer to peer loans and short term bad credit personal loans.