Card costs climbing despite rates freeze

Credit card providers have continued to raise borrowing costs over the past two years even while the Bank of England base rate has remained unchanged at 0.5 per cent.

The average credit card interest rate is currently 18.7 per cent, according to financial researchers Defaqto, up from 16.6 per cent in July 2007, when the base rate was 5.75 per cent.

The base rate hit a record low of 0.5 per cent in March 2009, and the margin between the average credit card cost and the Bank's base rate has soared from 10.85 percentage points in mid-2007 to 18.1 points now, the research found.