There are concerns that many borrowers in the UK are now turning to sub-prime credit cards that charge astonishing rates of interest because they are unable to get finance through more traditional routes. According to a recent report around one million people that have been desperate to get finance but have been turned away by traditional lenders have turned to these credit cards, some of which are charging rates of interest that are as high as 60 percent.

One firm that offers credit cards for those with damaged credit ratings is Provident Financial, which offers the Vanquis credit card. The company claims that it has been receiving a massive 2700 applications a day for its credit card, which charges some consumers an astonishing rate of interest based on their credit rating and risk. With so many people getting turned down for credit, and others having their credit limits slashed or their accounts closed, firms like Provident are enjoying a roaring trade.

Provident now has over four hundred thousand borrowers on its books, although officials from the company said that it had also had to turn down well over three quarter of a million applications from desperate applicants. The figures from Provident have raised concerns that more and more people could be forced into finding finance from companies such as door step lenders where the rates of interest charges are extortionate.

An official from the debt charity, Credit Action, said: ‘These people are not being served by the high street banks and it just goes to show the appetite that there still is out there for credit. The rates on these cards are very high if you cannot manage your debts. The fear is that while some of these people will hopefully have been put off, many will have to turn to doorstep lenders or pay day loans companies which can charge exceptionally high amounts.’

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