Millions of Brits in for shock charges as credit card rates hit highest level since 1998

With credit card borrowing growing at its fastest pace since 2005, new analysis shows that last month average rates on credit cards hit their highest level since 1998.

An analysis of the Bank of England’s quoted household interest rate figures uncovered that average credit card rates jumped 0.23 percentage points from June to hit 21.66 per cent in July – the highest average monthly rate since December 1998 (22.19 per cent).

The data, shared by digital lender marketplace  Freedom Finance, further showed that rates for £10k personal loans also rose in July to 4.18 per cent – a six-year high.

Moreover, rates for a £5k personal loan also ticked up by 0.07 percentage points to 8.27 per cent in July, a four year-high.

Meanwhile, overdraft rates stalled in July but are still at all-time highs of 35.28 per cent.

ONS data last week found that 6m people using more credit than usual due to the cost-of-living crisis.

Discussing the findings, David Hendry, Chief Marketing Officer at Freedom Finance, said: “With credit card rates at record highs in this millennium, it is crucial that people take all necessary steps to get the most suitable product for their circumstances.”

“It will be a difficult year ahead for household budgets,” he added.