Northern Rock's retreat from the unsecured lending market gathered pace today as the bank increased interest rates on its loans and withdrew its sole credit card.

The stricken Newcastle-based bank pulled its Eskimo Loans brand and said it will no longer offer new customers its Visa credit card, which was funded by the Co-operative Bank.

The moves follow the bank's decision last week to hike rates on Northern Rock-branded loans by 2 per cent.

Meanwhile, Northern Rock upped its efforts to attract more savers, increasing the rate on its Silver Saver Online account from 6.30 per cent to a market-leading 6.49 per cent. It also increased the rate on its Tracker Online account from 6.31% to 6.49%, while the bonus for 12 months rose from 1.06 per cent to 1.24 per cent.

Lisa Taylor, an analyst at Moneyfacts, the financial comparison site, said: “The withdrawal from the credit card market of Eskimo loans and the increased rates on the Northern Rock loans would appear to indicate a reduced appetite for lending on an unsecured basis. While Northern Rock is not alone in the loans market, the withdrawal of its credit card to new borrowers, aside from the market wide increasing of fees, is the first sign of the credit crunch affecting this market.

Ms Taylor added: "Even Northern Rock's secured lending has seen a tightening of criteria and is currently bucking the market trend by increasing fixed rates".

Northern Rock withdrew its 5-year 'Together' fixed rate mortgages and increased the rates on its 2-year fixed rate loans by 0.30 per cent.

Northern Rock has borrowed billion of pounds from the Bank of England since being unable to raise funds in wholesale markets due to the global credit freeze.

The bank is now looking for a buyer, and a consortium led by Virgin Group was picked as preferred bidder on Monday.

For a more detailed analysis of what the possible Virgin takeover might mean for customers see the Times Money section tomorrow.