A recent report has indicated that credit card rates and charges have increased in the last six months and are continuing to do so. The average interest rate on a credit card has gone up by 0.5 per cent despite the fact that the base rate has come down by 0.75 per cent since December of last year.

According to figures there has been an average rise of 0.56 per cent on credit cards for purchases, with the average rate now stranding at 17.12 per cent. The average rate on balance transfer cards has risen by around 0.83 per cent taking it to 15.95 per cent.

Industry officials claim that credit card companies have been raising fees, charges, and interest rates on credit cards to try and recoup financial losses, that occurred as a result of the penalty fee cap of £12 that was brought in by the Office of Fair Trading two years ago.

One industry official stated: “Most of us would normally seek out a new zero per cent 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. This means more of us will have to use our current credit card and if the 0 per cent deal has expired, you’ll be borrowing money at a rate of around 16 per cent; be careful what you spend on the plastic because the interest will soon mount up.”