Credit card users are being warned about rising interest rates and fees, which could add hundreds of pounds to a borrower’s annual costs.
Moneyfacts.co.uk said some card issuers had moved to offset EU caps on how much they can charge merchants for card transactions by adding to a card holder’s costs instead.
It charted the market movement over the past few months at a time of rock-bottom interest rates, with the Bank of England base rate at a record low of 0.25%.
Demand for credit has been growing at its fastest level for nearly a decade as a result, according to industry figures.
But the analysis from Moneyfacts showed the annual interest rate offered on HSBC’s Premier Credit Card Mastercard had risen from 11.9% to 18.9%.
The financial website said that would mean someone with a £4,000 debt paying off £150 a month having to find an extra £469.
Other examples included the annual fee on Santander’s 123 Credit Card Mastercard rising from £24 to £36.
The depressed interest rate environment has been credited for propping-up economic growth generally.
However, economists have warned that consumer spending could take a hit next year if inflation rises as fast as some forecasts have suggested because of the effects of the weak pound.
Any squeeze on consumer spending from higher prices could be exacerbated by high debt levels.
Moneyfacts finance expert, Rachel Springall, said: “The increasing cost to borrow on credit cards has been blamed on the new EU interchange fee caps as card companies attempt to sustain offers whilst seeing a reduction in card processing fees.
“It’s worrying news for these rises to be significantly high in some cases and it will frustrate many consumers, particularly those struggling with debt.”
Richard Koch, head of policy at the UK Cards Association, responded: “The EU cap on interchange fees, which came in last December, will cost card companies an estimated £750 million in lost income.
“While there has been a recent rise in APRs, there’s still plenty of good value in the credit card market, with a wide range of competitive products and many 0% deals for new and existing customers of up to 42 months.”
Join GhanaStar.com to receive daily email alerts of breaking news in Ghana. GhanaStar.com is your source for all Ghana News. Get the latest Ghana news, breaking news, sports, politics, entertainment and more about Ghana, Africa and beyond.