Lechlade, UK -- (SBWIRE) -- 06/27/2011 -- The UK credit card industry has had a rough ride this week, being slated in the press on several occasions for exploiting customers. As the Bank of England (BoE) held the base rate at 0.5% for the 27th month in a row, many are questioning why credit card interest rates continue to progressively rise.

A recent investigation into interest charges on many cards issued by the High Street banks found that all of them had raised their key credit card rates over the last 24 months, despite the BoE Base Rate remaining stable at the lowest rate for 2 generations.

Halifax Bank of Scotland (HBOS) came in for strong criticism for recent rises of around 2%, and for pegging their credit card interest rates to the Base Rate which clearly can only now go up. Evidently they want future interest rate rises to look like the fault of the BoE and not their own charging structures.

One source we identified, a card holder with HSBC, states that the interest rate on his HSBC MasterCard has risen steadily from a manageable 15.9% in January 2009 to a staggering 25.9% today.

So what you can do if you’re stuck with a credit card you can’t really afford to clear, but that’s clearly no longer offering a competitive interest rate. Recent statistics we’ve discovered online state that consumers are still slow and reluctant to compare credit cards and other financial products and switch providers.

However with a wealth of new credit card deals in the market many offering long term 0% promotions, it’s really important that consumers do shop around. A difference of 2% in two credit card interest rates can make a difference of £500 a year in interest payments on a typical £2,500 credit card balance, some £41.66 a month.

Part of the reason credit card interest rates have gone up is the changes in credit card legislation. Recently rules on the allocation of customer payments have seriously dented the card issuer’s ability to make money from customers who don’t clear their credit card accounts at the end of the month.

Until recently consumers accepted the unfair way credit card companies allocated their payments, often allocating their cash to balances that incurred the lowest interest rates first. This left the credit card companies to make their maximum rate of interest on any outstanding balances. But new legislation originating from the European Commission has changed all that. Credit card companies now have to allocate any customer payments to amounts that incur the highest rates of interest first.

Tracking down the best credit cards isn’t as complex as it used to be. Credit card comparison websites like Cardchoices.co.uk keep consumers updated daily with the latest deals.

Although interest rates are at an all-time high, competition is fierce in the UK credit card market and there’s always one or two issuers offering a deal that if you switch at the right time, can save you significant money.