9 December 2008
The cost of credit card borrowing has increased over the last three months, with average interest rates now standing at 17.7%, up from 16.6% a year ago.
These are the findings of an analysis by the Independent and come despite three large cuts in interest rates by the Bank of England.
Business Secretary Lord Mandelson held a meeting with credit card providers last month during which he gave them two weeks to implement a set of fair principles.
But according to the Independent, companies have so far made no move to cut their rates, despite Lord Mandelson's deadline being just days away.
Failure to act could result in the launch of an investigation by the Office of Fair Trading (OFT).
A government source told the newspaper: "We are not backing off. If the companies don't move, if necessary, we will go down the OFT route."
Last month's summit was held in response to calls from Gordon Brown, who insisted that the credit card industry should adopt a more responsible approach to lending.
Consumers could benefit from lower rates by switching to a different credit card provider.