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Should you switch your credit card?
The average credit card APR is now 35.7%, matching June’s record high
Keeping a balance on your credit card could now be costing you more than ever.
The average credit card APR has climbed to 35.7% – matching the joint-highest rate on record (set in June 2025) – according to data from Moneyfacts.
With around half of all credit card balances now incurring interest, according to UK Finance, it’s worth checking whether switching your card or changing how you use it could save you money.
Here, Which? explains what’s happening to credit card rates, how much you could save by switching, and how to keep costs to a minimum.
What’s happening to credit card interest?
According to financial data website Moneyfacts, the average purchase annual percentage rate (APR) across all credit cards is sitting at 35.7% in August. This is a joint-record high with June 2025.
Here we look at how credit card interest has changed over the past two years.
- Find out more: best credit card deals August 2025
Should you switch cards?
With average credit card APR on the rise, you could stand to save a lot of money by switching cards – whether to pay off existing debt or avoid paying interest on future purchases.
Option 1: Cut interest with a 0% balance transfer card
If you're paying interest on a large balance, moving it to a 0% balance transfer card could help you pay it off faster – and for less.
These cards let you transfer debt from an existing card and pay no interest for a fixed time. The longest deals currently offer up to 34 months interest free.
Because all your repayments go towards the balance rather than interest, the savings can be substantial.
Repaying a £2,000 balance at 35.7% APR
If you repaid £80 a month on a card charging 35.7% APR, it would take nearly three and a half years to clear the debt and cost you £1,249.25 in interest.
Move that balance to a 0% balance transfer card, and you’d be debt-free in just over two years – with no interest charged at all.
You’ll usually need to pay a one-off balance transfer fee, which can range from 0% to 5%. The longest 0% deals currently come with fees between 3% and 3.49%, so you'd pay around £60 to £70 to transfer a £2,000 balance.
- Find out more: best balance transfer cards
Option 2: Spread the cost with 0% purchase card
If you’re planning a big spend, a 0% purchase card can help you borrow interest free for a limited time – as long as you repay the balance within the deal period.
The best offers currently give you up to 25 months to spread the cost without paying interest.
Spending £1,000 on a card charging 37.5% APR
If you used a standard credit card with a 37.5% APR and repaid £1,000 over 12 months, you’d pay around £185 in interest.
Put the same purchase on a 0% purchase card, and you’d pay no interest at all – provided you repay the full amount within the interest-free period.
To avoid unexpected charges, make sure you clear the balance before the deal ends. Once the 0% period expires, you’ll be charged interest on any remaining debt at the card’s standard APR, which is typically around 24%.
- Find out more: best interest-free purchase cards
Check your eligibility before you apply
It’s worth checking your eligibility and working out exactly how much you could save before switching cards.
The best balance transfer and 0% purchase offers are usually only available to those with a high credit score, meaning you may not receive the advertised deal.
Applying for too many credit cards in a short space of time can also damage your score, which could make borrowing more expensive in the future.
- Find out more: best credit card providers 2025
4 ways to cut the cost of your credit card
Following these golden rules will help keep the cost of using your credit card to a minimum.
1. Pick the right card for the job
Credit cards are designed for different needs – and using the wrong one can be costly.
If you’re borrowing, steer clear of reward or credit builder cards, as these usually charge high rates of interest. But if you’re confident you’ll repay your bill in full every month, a cashback card could help you earn something back on your spending.
Our experts review hundreds of credit cards every month to find the best deals based on how you use your card.
- Find out more: best cashback credit cards
2. Avoid cash withdrawals and currency charges
Using your credit card to take out cash or buy foreign currency usually comes with extra fees and a higher APR – and you won’t benefit from an interest-free period.
These transactions also appear on your credit report and can affect your credit score, which may make future borrowing more expensive.
- Find out more: best travel credit cards
3. Tackle the most expensive debt first
If you’ve got multiple card balances, focus on clearing the one with the highest APR. It’s the quickest way to reduce how much interest you pay overall.
And if you’ve got savings, it may make sense to use them to pay down your debt – especially if your interest charges outweigh what you’re earning.
- Find out more: how to pay off your debts
4. Don't just pay the minimum
Minimum payments are calculated as a percentage of your balance, so they shrink as your debt falls. That means it can take years to clear your card – and cost more in the long run.
For example, a minimum repayment of 2% on a £500 balance would be £10. Once the balance drops to £400, the minimum falls to £8.
If you can afford to pay a fixed amount each month, you’ll clear the debt faster and pay less interest overall.
