Warning as the average credit card interest rate reaches a 16-year high of 30.3%
- Rise due to interest rate rises and the withdrawal of low-rate cards
- 0% credit card period before interest is charged has also fallen to 266 days
The cost of borrowing money on a credit card has hit a 16-year high, according to Moneyfacts.
This month, the average purchase interest rate on a credit card reached 30.3 per cent, the highest level since the analyst's records began in June 2006.
APR is the interest rate that is charged to credit card holders if they do not pay back their balance in full each month and includes card fees.
- Check our pick of the best credit cards
![Borrowing costs: The average purchase interest rate on a credit card has reached 30.3% - the highest level since the analyst Moneyfact's records began in June 2006](https://i.dailymail.co.uk/1s/2022/12/14/09/50555481-11534555-Borrowing_costs_The_average_purchase_interest_rate_on_a_credit_c-a-1_1671011698565.jpg)
Borrowing costs: The average purchase interest rate on a credit card has reached 30.3% - the highest level since the analyst Moneyfact's records began in June 2006
Moneyfacts says the increase is due to interest rate rises, the withdrawal of low-rate cards and the launch of new cards.
The period for which you can use a 0 per cent credit card before interest is charged has also decreased in the past year from an average of 303 days to 266.
However, there are more credit cards offering an interest-free period than there were this time last year, up from 62 to 67.
Andrew Hagger, personal finance expert at MoneyComms, says: 'If you do not pay off your balance in full, the amount of interest you pay on your card will increase.
'Unfortunately, this is another cost to bear alongside higher energy and food bills.'
a.cooke@dailymail.co.uk
Most watched Money videos
- Bugatti Automobiles launch stunning £3.2m new hyper sports car for 2026
- We review the UK's cheapest EV - the £14,995 Dacia Spring
- Aston Martin unveils new £2million limited edition hypercar
- Bentley unveils record-breaking hybrid £240k Continental GT Speed car
- Ford revives Capri with new electric SUV priced from £42,075
- 1992 Ford Escort RS Cosworth used by Jeremy Clarkson to be auctioned
- Bugatti unveil new sports car with watchmaking-inspired interior design
- Ford Capri name returns but as a sporty electric SUV
- Step inside new high-security vehicle storage facility near Gatwick
- Britain's favourite affordable SUV: We take a spin in the new MG HS
- The new MG Cyberster EV roadster reviewed by TiM Motoring
- Honda to relaunch one of best-known sports car names in 2025
-
Paramount loses £5bn as viewers turn off cable TV
-
MARKET REPORT: Cheers! Revolution Bars restructure approved
-
Tesco may be a stock to add to your shopping list if you...
-
Insurers could have to pay millions over cancelled Taylor...
-
Amazon's £3bn AI Anthropic investment probed by Britain's...
-
Hargreaves Lansdown agrees £5.4bn takeover by private...
-
SMALL CAP MOVERS: Seeing Machines captures market's...
-
Do we have the worst roads in Europe? New survey shows...
-
Will stock markets keep stumbling - and how to be calm in...
-
UK stocks claw back their losses after turbulent week in...
-
BUSINESS LIVE: Hargreaves Lansdown agrees takeover;...
-
One-of-a-kind yellow Ford Escort RS Cosworth could sell...
-
Shein looking to open first British warehouse as it gears...
-
With global markets in turmoil, look closer to home for...
-
RAY MASSEY: Swift new ride for chart topping Nissan Qashqai
-
ALEX BRUMMER: Chancellor Rachel Reeves nettles Square Mile
-
Founders in line for £850m payday as Hargreaves Lansdown...
-
Bellway sales buffered by 'moderation' in mortgage rates