Over the past few years, banks and building societies have tightened their lending policies to such an extent that there are virtually no unsecured loans available at the moment. Consumers have therefore looked for other unsecured borrowing and consequently we now have record levels of credit card debt.
Despite the base rate of interest remaining at an all time of low of 5%, credit card companies are slowly increasing interest rates; with new rules being imposed on the industry, aimed at giving consumers a better deal, the chances are interest rates will continue upwards.
Basically if consumers are getting a better deal, it means the credit card companies will make less money than they would like and therefore look to make up the difference through an increase in interest rates.
However, there is one other area of unsecured lending, which has grown massively in the last 3 years and which is getting a lot of press