Despite Bank of England interest rate cuts, the cost of credit card borrowing is rapidly rising. Credit card companies are clamping down on existing borrowers and introducing strict criteria for new customers.

According to MoneyExpert.com the average APR on credit card purchases has increased by 0.56% in the past six months from 16.56% to 17.12%. The standard rate on a balance transfers has also risen from 15.12% to 15.95%.  This means a £3,500 credit card balance, with an APR of 15.95%, would incur an annual interest charge of some £558.

"Everyone is finding it more difficult to make ends meet as the cost of living rises. People will want to turn to credit and that means splashing the cash on the plastic,” comments Sean Gardner of MoneyExpert.com. “Most of us would normally seek out a new 0% deal to tide us over the bad times, but with lenders playing a cautious game getting one of those cards is more difficult than it used to be. You'll need to convince the card company that you can afford to repay your debts.”

As lending criteria become tougher more and more people are expected to stick with their existing credit card. But Gardner warns: “Be careful what you spend on the plastic because the interest will soon mount up."