Lloyds has trimmed the rate from 1.75 to 1.65 per cent a month, so the annual percentage rate drops from 24.6 to 23.1 per cent.
Lloyds has announced cuts of more than 1 percentage point on all personal borrowing rates from 2 February. None of the other banks has announced any cuts in borrowing rates.
Barclays TSB, Midland and National Westminster banks said credit card rates were under review.
Barclays Bank pointed out that its Barclaycard and MasterCard rates, at 22.9 per cent APR, were already below the new Lloyds credit card level.
At Save & Prosper, owned by Robert Fleming, where credit card rates are currently 22.6 per cent with an annual pounds 10 fee, or 23.1 per cent without a fee, the APRs are likely to drop by roughly 1 percentage point.
'Most banks must start to become embarrassed by the margins they are earning, especially now they have removed the interest- free period,' Ian Lindsay, S&P's banking director, said.
The removal of the interest-free period for those who do not pay their bills in full every month is equivalent to 3 per cent on the rate for borrowings of pounds 100 a month.
Over the past two years banks have had to double their provisions against bad debt and fraud to around 6 per cent.
There are also fixed costs associated with running credit card accounts such as the cost of replacing cards every two years and sending out monthly statements.
A spokeswoman for the Retail Credit Group said store cards always follow base rate changes slowly in both directions. 'They want to see if this rate will last,' Elizabeth Stanton said.
The store card rates have been cut since last autumn and now stand at around 30 per cent APR.
More house purchase lenders followed the three largest lenders by cutting their basic mortgage rate to 7.99 per cent. They include Woolwich, National & Provincial Building Society, Barclays and National Westminster banks, Royal Bank of Scotland and Nottingham Building Society.Reuse content