Warning as typical bank card borrowing charge reaches 20-year excessive

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Your assist makes all of the distinction. Learn extra Bank card rates of interest have soared to their highest level in a minimum of twenty years, new information reveals.

The common annual proportion charge (APR) for bank card purchases hit 35.8 per cent in February, marking the very best determine recorded since monetary data web site Moneyfactscompare.co.uk started monitoring these statistics in June 2006.

This important improve signifies that many customers may face increased prices on their excellent balances.

For these carrying bank card debt, specialists recommend both prioritising quicker reimbursement or exploring choices to switch balances to playing cards providing an introductory 0% curiosity interval.

<img src="https://static.independent.co.uk/2026/02/17/10/a332478961ed358c63a9ff094df26f41Y29udGVudHNlYXJjaGFwaSwxNzcxNDEwMjMx-2.33094179.jpg" srcset="https://static.independent.co.uk/2026/02/17/10/a332478961ed358c63a9ff094df26f41Y29udGVudHNlYXJjaGFwaSwxNzcxNDEwMjMx-2.33094179.jpg?quality=75&width=320&auto=webp 320w, https://static.independent.co.uk/2026/02/17/10/a332478961ed358c63a9ff094df26f41Y29udGVudHNlYXJjaGFwaSwxNzcxNDEwMjMx-2.33094179.jpg?quality=75&width=640&auto=webp 640w" loading="lazy" alt="Shifting debts around is good for those who want to grab interest-free offers, Moneyfactscompare.co.uk said" class="sc-1mc30lb-0 ggpMaE"/> Shifting money owed round is nice for individuals who need to seize interest-free gives, Moneyfactscompare.co.uk mentioned (PA Archive) Rachel Springall, a finance skilled at Moneyfactscompare.co.uk, mentioned: “The most recent statistics from UK Finance reveal round half of bank card holders are actually incurring curiosity costs, and whereas some would possibly solely owe a number of hundred kilos, there shall be others with considerably extra debt that must be paid again.

“Fortunately, there are some prolonged interest-free stability switch playing cards to select from, with TSB main the market with a 38-month time period, which costs a switch payment of three.49 per cent per cent.

“Reviewing card statements repeatedly is important to remain on high of money owed, nevertheless it’s additionally sensible to make a calendar word of when any balances will incur curiosity.

“Shifting money owed round is helpful to seize interest-free gives, however the debt will grasp overhead if solely the minimal repayments are made every month.”

Ms Springall additionally prompt checking credit score stories earlier than making use of for a brand new card.

She added: “Client behaviour continues to alter, many now use their digital pockets to make funds, comparable to with a sensible cellphone or watch.

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“It's then important for customers to maintain on high of their transactions, comparable to establishing notifications every time they spend from their financial institution, or checking their on-line statements every week.”

In the meantime, Philly Ponniah, Chartered Wealth Supervisor and Monetary Coach at Philly Monetary, described rising excellent balances and better charges as a "poisonous combine" that might "derail" mortgage functions.

She mentioned: "Bank card debt is creeping up at precisely the incorrect time. Balances rising 8.5 per cent 12 months on 12 months tells us that households are leaning on credit score to plug gaps.

"Sure, the share of balances incurring curiosity has dipped barely to 47.8%, however that also means almost half of all card debt is being charged at a median 35.8% APR. That's eye-watering and really arduous to outrun.

"For mortgage hopefuls, this issues. Lenders take a look at excellent balances, minimal funds and total utilisation. Excessive card debt can shrink how a lot you may borrow or derail an utility completely.