Credit card purchase costs ‘jump to highest level in nearly 20 years’

Average rates charged for credit card purchases have reached their highest level since at least 2006 – but the choice of zero interest deals has increased, according to a financial information website.

Moneyfacts said that between March and June, the average purchase annual percentage rate (APR), including fees, was 35.7% – the highest on its records which started 19 years ago, in June 2006.

Meanwhile, the number of interest-free purchase offers rose to 64 during the second quarter of 2025 – the highest number since 65 were counted in summer 2023.

Longer interest-free purchase terms are also being offered on credit cards, at 286 days on average, up from 267 days in March 2025.

The number of interest-free balance transfer offers rose from 65 to 67 during the second quarter of 2025, which is also the highest since the summer of 2023.

Interest-free balance transfer periods are also longer, rising to 536 days on average, from 529 days in March.

But fees for transferring the balance have also increased, to 2.50% on average during the second quarter of 2025, up from 2.42% a year ago.

Costs have risen despite the Bank of England base rate having edged down.

Rachel Springall, a finance expert at Moneyfacts, said: “Consumers who use their credit cards for everyday purchases will be disappointed to see borrowing costs rise to the highest point since records began almost two decades ago.”

Ms Springall said several factors led to the overall hike in rates, with some providers having increased their rates during the past quarter, while new credit cards were also launched onto the market.

She continued: “Those who want to spread the cost of their purchases may find it encouraging that providers have improved their 0% purchase and balance transfer deals during (the second quarter of) 2025, however, the cost to move debts rose, making it essential for borrowers to weigh up the up-front costs and lengthy interest-free terms.

“An introductory 0% offer will be particularly attractive to those struggling with the cost-of-living, as it encourages them to plan out repaying their debts without incurring interest each month.”

Ms Springall said some people may find that consolidating their debts is a cost-effective option.

Some may also want to seek support from a debt advice charity, she added, “to get on the right path to pay off debts”.