Fresh evidence of a squeeze on consumer credit emerged yesterday as one of Britain’s top sub-prime credit card issuers pushed through a huge rise in its lending rates.

Marbles, the private equity-owned card provider aimed at borrowers with patchy credit histories, is preparing to hit some of its 338,000 account holders with annual interest charges of as much as 33.9 per cent for cash advances. Marbles will also charge an annual 26.9 per cent rate of interest for purchases.

As well as underscoring the increasingly sombre mood among lenders, the Marbles move is likely to provoke fresh allegations of profiteering by the venture capital industry.

Until two months ago Marbles was owned by HSBC, through its HFC arm, which was part of its 2002 acquisition of the American sub-prime lender Household. HSBC sold Marbles to SAV Credit at the end of October for £385 million.

SAV, which operates the aqua MasterCard, is backed by its management and a group of venture capital investors, including Electra, Palamon and Morgan Stanley Alternative Investment Partners. Unlike aqua, Marbles is not open to new customers. SAV generates its profits based on its management of existing borrowers.

The new charges for Marbles customers will come into effect next month. They compare with a typical average annual interest rate charged by the top ten credit card providers of about 15.5 per cent, according to uSwitch, the price-comparison website.

At present Marbles borrowers facing the much higher charges currently pay 23.9 per cent and 19.9 per cent, respectively, for cash advances and retail transactions.

Marbles insisted yesterday that its rate rises were in line with the wider market and not a reflection of higher funding costs or problems on wholesale markets. The firm began writing to customers about the changes earlier this month, a spokesman said. He said that the average rise would be roughly 4 percentage points for purchases and 6 percentage points for cash advances.

The increase emerged amid fresh evidence of a downturn in mortgage markets and amid forecasts of a surge in personal insolvencies next year.

According to KPMG, the accounting firm, a record total of more than 130,000 people are likely to declare themselves bankrupt or enter individual voluntary arrangements in 2008. This compares with 111,000 becoming insolvent in the 12 months to September this year, according to latest figures from the Insolvency Service.

Mark Sands, of KPMG, said: “Those in difficulty will find that their options are becoming limited - formal insolvency will, for many, be the only way out.”

Figures from the British Bankers’ Association (BBA) yesterday raised pressure on the Bank of England to cut interest rates next month for a second successive month. BBA data showed a near 44 per cent slide in new mortgage approvals last month. Banks approved only 44,811 mortgage loans in November, slightly up on October’s record low of 44,321 but the second-lowest level since records began.

The BBA said that banks lent home-buyers only £4.3 billion last month, £500 million less than in October and more than £1 billion below the average for the previous six months.

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