Credit card and personal loan costs for new borrowing have jumped in recent months, according to analysis by a financial information website.
Looking at the credit card market, the average purchase APR (annual percentage rate), including card fees, rose to the highest level on Moneyfacts’ records in September, at 31.8%.
Moneyfacts’ records go back to June 2006.
Credit card borrowers may also find they have shorter periods before interest kicks in.
If borrowers are struggling with their debts, it is imperative they speak to their provider and seek advice if they are worried about missing any repayments— Rachel Springall, Moneyfacts
The average interest-free balance transfer term on credit cards fell to 543 days in September, from 553 days in June, marking the shortest period since March 2021.
The typical percentage fee for transferring the balance was 2.29% in September, up from 2.26% in June.
The average cost of taking out a £10,000 loan over five years is the highest in more than a decade (since January 2012), at 8.4%.
Rachel Springall, a finance expert at Moneyfacts, said it now costs nearly £800 more in interest to take out a £10,000 loan over five years than it would have done on average in September 2022.
Ms Springall said: “Consumers looking for a new credit card, perhaps for them to spread the cost of their purchases in the run-up to the festive season, would be wise to compare deals now.
“It’s also important they take time to check their credit score before they apply.
“If borrowers are struggling with their debts, it is imperative they speak to their provider and seek advice if they are worried about missing any repayments.”
