Christmas shoppers could receive higher than usual credit card bills as firms are accused of increasing rates to an 18-month high to take advantage of the festive period.
Firms are charging an average of 19.1%, which is calculated as 38 times higher than the 0/5% interest base rate set by the Bank of England. It is a higher increase than last year when credit card companies hit 18.1%.
Credit card companies are taking advantage of families expected to fund Christmas with their cards due to the difficult economic environment, the Daily Mail said.
Observers will be suspicious that firms want the raise the money to find the 0% interest rate deals which are available to customers and to also put back the money lost on the refunds to customers who were mis-sold payment protection insurance.
IMRG forecasts that card spending online during the two weeks beginning December 3 will top £4.6bn.
Under a billion of that figure, £920m, is expected to go through mobile devices such as smartphones and tablets.
Money Facts finance expert Rachel Springall said: “Shoppers may be relying on their credit cards to cover Christmas this year; while this method may seem secure and straightforward, customers should be aware that the interest they are being charged is rising.
“Borrowers with a £5,000 debt on their card, who repay the minimum each month, will now repay an additional £692 over the life of the debt compared to a year ago.”
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