Interest rate shock for Capital One card holders

The group, which has imposed rate hikes of up to 7 per cent on credit card holders, blamed the move on the "economic environment".

Some people have seen the interest they are charged on outstanding balances jump from 8.01 per cent to 15.31 per cent. The rate increases will come into force after customers receive their March statements, with the new interest rates shown on their April ones.

The group declined to say how many of its customers were affected by the move.

A Capital One spokeswoman said: "The economic environment has changed dramatically and we must adjust rates to account appropriately for the increased risk of lending to consumers in an economic downturn.

"This significant downturn means that we have had to increase rates for some of our customers by up to 7 per cent.

"This decision reflects similar moves throughout the credit card industry."

But the group is giving customers who do not want to accept the rate increase the choice of staying on their existing interest rate but no longer using their credit card, and instead gradually repaying the balance.

Halifax has also increased the rates it charges some of its credit card customers by up to 5 per cent.

The group, which reviews customers' rates on a monthly basis, said some people had seen their rate increase, while others had had it cut.

But it stressed that the changes affected only a small number of customers.

A Halifax spokesman said: "In common with other credit card issuers, we continuously review our pricing structure and will adjust interest rates on cardholder accounts from time to time.

"We do this for many reasons including market and competitor conditions as well as risk based assessments which reflect a customer's individual circumstances. As part of this activity rates will go down as well as up."

The interest rates charged on credit cards have been steadily increasing during the past year, as providers factor in the increased risk of customers defaulting on their debt.