Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:
“The past 20 years has seen a significant shift in the use of credit cards, they are much more convenient and arguably safer, but one area that has got worse is the cost to borrow. The Moneyfacts average credit card purchase APR sits at 35.8% APR for February 2026 (highest rate since records began in June 2006), so borrowers incurring interest need to make fixed repayments to clear debts faster.
“The latest statistics from UK Finance reveal around half of credit card holders are now incurring interest charges, and while some might only owe a few hundred pounds, there will be others with significantly more debt that needs to be paid back. Luckily, there are some lengthy interest-free balance transfer cards to choose from, with TSB leading the market with a 38-month term, which charges a transfer fee of 3.49%. Reviewing card statements regularly is vital to stay on top of debts, but it’s also wise to make a calendar note of when any balances will incur interest. Shifting debts around is handy to grab interest-free offers, but the debt will hang overhead if only the minimum repayments are made each month.
“Not every borrower will have the best credit score, which is why it’s wise to check a credit report often before applying for a new card, and sort out any discrepancies. Those who get turned down will need to prioritise paying their debts as quickly as possible. Making fixed credit card payments is the fastest way to clear debts, those using a credit card charging 35.8% APR with a debt of £500 would take an entire year to pay it off based on a fixed repayment of £50, and it would cost £85 in interest. Increasing this payment to £100 per month would clear the debt in six months, and halve the interest charged (£42).
“Next month, banks and building societies will be permitted to amend the contactless limit of £100. There have been understandable concerns surrounding fraud of amending any contactless limit, but the change should be putting the power back into people’s hands to set their own limit or turn it off entirely. Consumer behaviour continues to change, many now use their digital wallet to make payments, such as with a smart phone or watch. It is then essential for consumers to keep on top of their transactions, such as setting up notifications each time they spend from their bank, or checking their online statements each week. Credit cards, whether physical or in a digital form, will continue to be of benefit to consumers, particularly for their protection for those who may be ripped off, as any goods or services not received which are valued over £100 up to £30,000 are covered under section 75 of the Consumer Credit Act.”
Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:
“The past 20 years has seen a significant shift in the use of credit cards, they are much more convenient and arguably safer, but one area that has got worse is the cost to borrow. The Moneyfacts average credit card purchase APR sits at 35.8% APR for February 2026 (highest rate since records began in June 2006), so borrowers incurring interest need to make fixed repayments to clear debts faster.
“The latest statistics from UK Finance reveal around half of credit card holders are now incurring interest charges, and while some might only owe a few hundred pounds, there will be others with significantly more debt that needs to be paid back. Luckily, there are some lengthy interest-free balance transfer cards to choose from, with TSB leading the market with a 38-month term, which charges a transfer fee of 3.49%. Reviewing card statements regularly is vital to stay on top of debts, but it’s also wise to make a calendar note of when any balances will incur interest. Shifting debts around is handy to grab interest-free offers, but the debt will hang overhead if only the minimum repayments are made each month.
“Not every borrower will have the best credit score, which is why it’s wise to check a credit report often before applying for a new card, and sort out any discrepancies. Those who get turned down will need to prioritise paying their debts as quickly as possible. Making fixed credit card payments is the fastest way to clear debts, those using a credit card charging 35.8% APR with a debt of £500 would take an entire year to pay it off based on a fixed repayment of £50, and it would cost £85 in interest. Increasing this payment to £100 per month would clear the debt in six months, and halve the interest charged (£42).
“Next month, banks and building societies will be permitted to amend the contactless limit of £100. There have been understandable concerns surrounding fraud of amending any contactless limit, but the change should be putting the power back into people’s hands to set their own limit or turn it off entirely. Consumer behaviour continues to change, many now use their digital wallet to make payments, such as with a smart phone or watch. It is then essential for consumers to keep on top of their transactions, such as setting up notifications each time they spend from their bank, or checking their online statements each week. Credit cards, whether physical or in a digital form, will continue to be of benefit to consumers, particularly for their protection for those who may be ripped off, as any goods or services not received which are valued over £100 up to £30,000 are covered under section 75 of the Consumer Credit Act.”
