It has been suggested by some lawyers that the interest rates being charges by some credit card providers in the UK may not actually be legal because of little known clauses in the Consumer Credit Act.

According to reports lawyers believe that some credit card firm may be frightened of the clauses coming to light, resulting in customers taking legal action against them.

The base interest rate has now been at an all time low of just 0.5 percent for one year now, and this is something that will have pleased many borrowers.

However, despite this rock bottom base rate the gap between the base interest rate and the average credit card interest rate has been increasing, with credit card interest rates reaching their highest levels in well over a decade according to recently released data.

The average rate of interest being charged on credit cards has now exceeded 18 percent, and this something that could financially cripple already struggling borrowers.

One lawyer who looked into this issue stated: “Bank executives are terrified that someone might take this to court and win, opening the floodgates for millions of other card holders.”

”In a test case in 2001, a court established that the lender would have to show they had not acted unreasonably. But the 2008 change brought in a rule preventing lenders imposing an ‘unfair relationship’ with their borrower”

”The old curb on credit charges said consumers could only contest them if they were ‘extortionate’. The onus has moved to a situation where it’s up to the card provider to prove they are not being unfair – and there appears to be a strong argument they are when the base rate is so low.”

Related posts:

  1. Interest rates left on hold again
  2. Debt related test case to be decided early in New Year
  3. Bank charges won’t be included in high cost credit report
  4. Claims for cancellation of debts may be put on hold
  5. New measures in place for credit card users

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