Credit, Collections & Insolvency News
Latest Bank of England figures show that people turning to credit cards and loans to cope with the cost of living crisis are being hit by higher interest rates.
Average credit card rates hit 21.43% in June, with this an 0.87 percentage point rise on a year ago when the average credit card rate was 20.56%.
Data on personal borrowing shows that someone borrowing £10,000 faces an average rate of 4.11%, compared to 3.43% a year ago. For someone taking out a £5,000 personal loan, typical rates have risen from 7.84% to 8.2%.
The figures show that borrowing on credit cards rose in the second quarter, accompanied by an increase in defaults. Lenders reported higher rates of default where consumers are not able to repay their loans and they expected the figure to continue to rise.
The results also reported a fall mortgage lending in the three months to June, with the drop at the fastest rate since the impact of Covid-19 in 2020.