Interest rates on credit cards are currently lying at the highest rate since 1998.
As providers worry about consumers defaulting on their debt, it has been revealed that the average credit card now charges an interest of 18.9%
Moneyfacts.co.uk, a financial information group, have said that credit card rates had been rising steadily since 2008.
As a result of the increase, someone who was £5,000 indebted to their credit card, paying only the minimum monthly figure, would pay an additional £2,360 over the life of their debt, in comparison to the 14.8% proportion which figures dropped to in 2006.
The group also expressed that the high percentage was only the average rate charged to new borrowers, while many older customers received further increases in their interest rates.
Further explained was the difficulty that customers would now experience when attempting to switch providers.
However the rights of consumers borrowing money were improved yesterday, as the EU consumer credit directive came into force.
Newly enforced is the opportunity to cancel loan agreements until up to 14 days, along with the ability to make partial early repayments as opposed to only being able to clear any outstanding balance in full, as was previously the case.
Consumer minister Ed Davey said: “The implementation of the consumer credit directive will help strengthen a culture of responsible lending.
“With new legal rights for consumers and greater responsibility for lenders, consumers will be better able to take charge of their money.”