Credit cards charging up to 46 per cent interest

AMERICAN Express has increased the cost of borrowing on one of its credit cards to 46 per cent - more than 30 times the Bank of England base rate.

The company now charges 46 per cent APR on the British Airways Premium Plus card, making it Britain's most expensive credit card.

Consumer groups said the cost of borrowing on some credit cards had now lost all touch with the base rate.

A series of other cards also have APRs above 35 per cent - despite interest rates being at the lowest level since the Bank of England was set up in 1694.

Other cards include Virgin Money American Express at 37 per cent and Citi MasterCard at 41 per cent.

Consumer group Which!'s credit card expert Martyn Saville said the Amex rate was "ridiculous".

He said: "This is over 30 times base rate. Credit card interest rates now bear no resemblance to Bank rates - it is just about what companies think they can get away with. Even at 19.9 per cent it is far too high."

The Amex rate was sent soaring from 36.6 per cent to 46 per cent because the issuer increased the annual charge paid by customers from £120 to £150. APR calculations take into account the annual fee, prompting the vast rise.

Four of the five cards with high APR have annual fees of up to £300. Amex said the interest charged on transactions had also risen, from 16.9 per cent to 19.9 per cent.

An Amex spokeswoman said fees had not gone up for the last seven years: "We've held off making any fee increases, however the cost of providing these products has increased. Rather than reduce the benefits on offer, we've slightly increased the fee."

The card offers British Airways frequent travellers benefits including 1.5 Airmiles for every pound spent on the card. British Airways said the APR was a matter for Amex.