Virgin raises interest on its credit cards

Virgin Money has raised interest rates on its credit cards by almost 50 per cent in a further blow to borrowers faced by mortgage rate rises.

Rates on purchases using Virgin credit cards have risen from 16.8 per cent to 24.9 per cent for some customers, while balance transfer rates have increased from 18.9 per cent to 27.9 per cent.

Thousands of selected Virgin Money customers have been earmarked for the increases following a review of the database.

Sir Richard Branson’s Virgin Money, which recently bought Northern Rock, said the rises reflected “responsible” lending and were part of a regular review taking customers’ performances and external risks into account.

Virgin Money has 2.5 million credit card customers and fewer than 20,000 people are understood to be affected.

Customers have been given 30 days’ notice of the rises and have 60 days to tell Virgin Money if they do not accept them.