**Popular Credit Card Sees Sharp Rise in Interest Rate, Customers Express Concern**
Hundreds of thousands of credit card holders have been left stunned as Zopa Bank, a prominent UK digital bank, has announced significant changes to its credit card interest rates. Customers who once benefited from particularly low annual percentage rates (APRs) are now facing far steeper charges—with some rates rising from just 9.9% to a striking 26.6%.
Launched in 2020, the Zopa credit card swiftly attracted widespread attention for its low entry APR of 9.9%. At the time, the competitive rate made it a desirable choice, especially among applicants with solid credit histories. While the card’s representative APR was advertised at 34.9%—a legal requirement for at least 51% of applicants—numerous users secured much lower starting rates, setting it apart from traditional high-street offerings.
However, recent developments mean the bank’s lowest available APR for new applicants has soared to 26.6%. Existing customers, many of whom were previously locked in at more favourable rates, are beginning to see substantial increases as well. For those accustomed to single-digit APRs, the change has come as an unpleasant surprise, prompting lively discussion across online community forums.
One frustrated credit cardholder shared: “Just a heads up if you have a Zopa credit card—they’ve hiked my rate from 12% to 22% today, and it came completely out of the blue.” The customer noted they typically used the card for significant purchases and rarely exceeded a quarter of their available limit, consistently settling their bill within three months. “I can’t understand why they’re doing this, unless it’s just greed. I’ll pay off what I owe before the new rate kicks in and then close the account,” they explained.
Another user echoed similar sentiments: “Mine went up from 17% to 26.7%—I’ve closed it already. It was my lowest APR card, but that’s clearly no longer the case. Luckily, I never carry a balance, except for a 0% balance transfer.” Such comments illustrate a growing sense of disappointment among customers who feel blindsided by the abrupt hike, particularly amidst a wider cost-of-living squeeze.
Banking experts are quick to point out that credit card providers regularly adjust interest rates in response to broader economic factors, such as the Bank of England’s base rate increases or revised calculations of customer risk. However, for impacted borrowers, the repercussions are immediate and tangible. For instance, someone borrowing £1,000 would see their annual interest climb from £99 (at 9.9%) to a hefty £266 (at 26.6%), amounting to an extra £167 each year if the balance is not repaid.
A Zopa Bank spokesperson commented on the changes, stating: “We regularly review our credit card interest rates to ensure they provide fair value to customers. As part of this process, customers’ rates may increase or decrease—as we’re seeing now. When a customer’s rate changes, we always provide at least 60 days’ notice.” They also explained that customers wishing to avoid the new rates could opt out, freeze their rate, and close the account once their existing balance is cleared, with no time limit or credit report penalties applied.
For those daunted by the prospect of mounting interest, consumer advocates recommend considering a balance transfer credit card. These products allow borrowers to shift existing debt and pay a 0% interest rate for a fixed introductory period, helping more of each payment to go directly towards reducing the principal balance.
Meanwhile, these changes highlight a continuing trend in the financial sector, where once-competitive rates are increasingly hard to find. For many, the era of ultra-low APRs may be fast receding, raising further questions about how banks balance profitability with consumer support during financially turbulent times.
Zopa Bank’s decision arrives at a precarious moment for Britons navigating rising living costs and shrinking household budgets, underlining the importance of regularly reviewing personal finances and weighing up alternative offers to avoid unnecessary expense. Customers are advised to check the terms of their agreements carefully and seek independent advice if concerned about the impact of increased borrowing costs.