Customers "get poor rates for staying in credit"

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Customers "get poor rates for staying in credit"

Mon 16th Jun 2008

Many people who stay in credit receive "pitiable" rates for it, MoneyExpert.com claims.

The financial comparison website says too many current account providers do not offer competitive interest rates for customers.

According to its research, the average credit interest rate on all current accounts has risen from 1.6 per cent a year ago to nearly two per cent.

The number of current accounts charging less than one per cent for a positive balance has fallen from 56 per cent to 45 per cent.

But MoneyExpert.com director Sean Gardner said that nearly half of all accounts gave customers in credit less than one per cent interest, which he called "an appalling return".

Some accounts offer ten times that level of interest, he noted.

He said customers should look for interest of 3.57 per cent and consider other aspects such as customer service.

The number of savings accounts using "bonus" rates to attract new customers has gone up by 30 per cent, with the average bonus lifespan decreasing, Investec Private Bank says.

Head of banking Linda McBain said in the Times that savers needed "a long term view" and should find an account with a competitive rate that also "guarantees consistency".

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