Credit card providers increase borrowing costsAverage purchase APR on a credit card now 18.46%

23 February 2014

Graph showing rising credit card rates

Credit card providers have been steadily pushing up the cost of borrowing over the past five years, while the base rate has remained at an all-time low.

The average purchase rate on credit cards has shown a steady increase over the past five years, from 16.71% in March 2009 to 18.46% at the end of January this year. 

Worse still, as the advertised APRs must be offered to only 51% of successful applicants, it’s likely that many borrowers are being hit with considerably higher interest rates.

Credit card interest rates

The Bank of England base rate has remained at 0.5% over the same five year period, so savers have also had to contend with dismal interest rates. 

Providers have also been hiking rates for existing customers. In our latest credit card customer satisfaction survey, a fifth of borrowers said their credit card provider had increased the APR once or more in the past two years. 

0% deals get longer

Although interest rates on credit cards have continued to creep up, the maximum lengths of 0% deals for purchases and balance transfers have been increasing.

This is good news for customers as it allows them to spread the costs of purchases over a longer period without paying any interest on the balance on their card.

The market-leading 0% deal on purchases is now 18 months interest-free, compared to just 10 months in early 2009.

And over the same period the longest 0% balance transfer deal has increased from 15 months in March 2009 to 31 months. For more information check our Best rate 0% balance transfer table.   

More on this...

  • Best credit cards for borrowing - Find the cheapest credit cards for everyday use
  • Which? Recommended Providers - See which credit cards we rate highly
  • Credit card customer satisfaction- Check which credit cards are rated best for customer satisfaction