Credit card companies have pocketed more than £500 million by failing to cut charges in line with Bank of England interest rates, research reveals.

The exclusive figures were calculated after a major credit card provider announced last month that it is introducing a new charging structure on borrowers. Halifax said it is linking the rate that credit card holders pay to Bank of England interest rates, and other banks are expected to follow suit.

It means customers losing out on higher charges because interest rates are widely predicted to rise this year.

However, if the policy had been adopted earlier when interest rates were being cut, customers would have benefited from lower fees. Halifax and Bank of Scotland insisted the decision was aimed at “improving transparency” for its customers The figures were calculated by personal finance website Moneynet and were based on total credit card debt of almost £60 billion and average credit card interest rates of 18 per cent.

Andrew Hagger, of personal finance website Moneynet, said..............Read more HERE