Financial experts urge credit card users to switch as APR hits record 26%

The typical cost of a credit card purchase outside of a 0% introductory offer has reached the highest level yet in the records of a financial information website.

Between early June and late August 2021, the average purchase APR (annual percentage rate), including card fees, stood at 26%, the highest of Moneyfacts records that began in June 2006.

The selection of lower rate cards has worsened and there have been card withdrawals as well, Moneyfacts said. The findings were released as households face a cost-of-living crisis, with multiple pressures including soaring energy prices and other costs and impending cuts in universal credit.

Moneyfacts said there have been improvements to interest-free acquisition cards, now offering 316 days at 0% on average, down from 285 days in June.

Balance transfer fees also fell to 2.1% on average, from 2.28% a year ago, and the lowest since June 2018, when the average was 2.07%.

Rachel Springall, Financial Expert at Moneyfacts, said: “The cost of a credit card purchase outside of a 0% introductory offer has hit an all-time high due to a combination of changes.

She added, “As buying interest rates rise and 0% offers fluctuate, it is important that consumers stay on top of market developments and change where appropriate. “

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About Joan Ferguson

Joan Ferguson

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