The lender in question, Marbles, is a prominent figure in providing credit to those with tainted credit histories. From next month their 300,000 plus account holders will face potential interest charges of 33.9% on cash advances, and an annual 26.9% rate of interest on purchases.
This action by Marbles is likely to stir up allegations of greed and profiteering by the venture capital industry, especially as borrowers already face higher charges than most in the market (23.9% and 19.9% respectively for cash advances and retail transactions).
A Marbles spokesman countered this argument by stating that rises were in line with the wider market and not a reflection of funding costs or problems on the wholesale market.
The wider market is expected to experience a significant period of inertia, culminating in a slowdown of mortgage and lending markets and increase in personal insolvencies.
Chris Eagle, Commercial Manager at creditchoices.co.uk, warns borrowers to proceed with caution and spend sensibly:
‘The ramifications for those that use credit cards to manage their debt are grave. Borrowers with high interest cards are urged to clear their balance monthly and spend with caution. Alternatively, contact your creditors and attempt to re-negotiate your existing payment plan’.
