End practice of "rate jacking" to restore consumer trust in banks - Mackintosh

4.18.50pm GMT Tue 16th Feb 2010

Edinburgh South Liberal Democrat Westminster Spokesman Fred Mackintosh has hit out at so called "rate jacking"; the practice of banks and lenders suddenly increasing the rate of interest on credit cards, sometimes by as much as 10%.

The average rate of interest on a credit cards has climbed to 18.8 per cent, the highest since 1998, with some card holders being forced to pay as much as 46 per cent.

Almost seven million card holders saw their interest rates increase over the last year, despite the fact that the Bank of England has kept rates at just 0.5 per cent since March 2009.

Fred Mackintosh said, "At a time when Britain is still reeling from a recession for which irresponsible banking practices are partly responsible it is despicable that banks and lenders, many of whom are publicly owned, continue to pile pressure on hard hit consumers while increases in the Bank Rate are at an all time low.

"At particular risk from these practices are students and recent graduates, many of whom are already struggling to deal with high levels of personal debt accrued during their degree, and are now finding it difficult to secure a job because of the recession.

"If banks are to recover the public's trust it is vital that they end practices like rate jacking and work with those in debt to help them through their difficult financial circumstances."