American Express

Amex the popular credit card brand has increased its interest rates on one of its cards to 46%. Which in simple terms means that if you buy something for £100 it will cost you £46 in interest payments.

The British Airways Premium Plus card makes it one of the UK’s most expensive cards and is so far removed from the base rate that you would thing you are living in Zimbabwe.

There are many other cards out there that are averaging between 25% – 35% so it seems like the credit card companies are able to play their own game and charge as much as they like. The margin they are making in terms of profit is huge as the base rate is only 1.5% at the moment so the cost of borrowing for them is cheap compared to what they charge thier customers.

As the supply of credit dries up more and more people will turn to their credit cards to get by, this only perpetuates the debt cycle. There are new industry standards that have come into play which mean credit card companies have to give at least 30 days notice before increasing their interest rates. Also no interest rates increases can be made during the first 12 months of you having your card.