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Credit card figures 'may boost personal loans'
The number of consumers choosing to take out personal loans could rise due to the cost of credit card borrowing, it has been suggested.
Figures from the Money Advice Trust have revealed that, despite the historically low Bank of England rate, the cost of using consumer credit remains high.
While the average interest rate on a card was 12.08 per cent in June 2008, the average rate at present is 12.38 per cent.
Such figures suggest that many consumers may opt for personal loans instead of credit cards in the coming months.
Louisa Parker, head of research and policy at the Money Advice Trust, said: "The cost of borrowing on a credit card has remained entirely decoupled from the Bank of England base rate, meaning the margins that credit card companies are making have increased significantly over the last couple of years."
In a recent column for Lovemoney.com, Jane Baker suggested that personal loans are often a better fit for consumers than credit cards.