Credit card spending rises to £21.8bn and 47.5% of balances incur interest

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, comments on the card spending statistics from UK Finance, out today.

“The latest statistics from UK Finance mean many borrowers are still incurring interest charges on their credit cards, which can be hefty. The Moneyfacts average credit card purchase APR is sitting at a joint-record high of 35.7% APR for August 2025 (joint high with June 2025), so it’s essential consumers consider switching debts to a 0% balance transfer credit card offer, or using a 0% purchase offer for bigger upfront spends, like white goods or electronics.

“Consumers struggling to get on top of their debts might only be paying the minimum repayment on their card, but this means they could have their debts sitting over them for a long time. Shoppers using a credit card charging 35.7% APR with a debt of £300 would take a whole year and eight months to pay it off based on a fixed repayment of £20, and it would cost £84 in interest. Increasing this payment to £50 per month would clear the debt in seven months, and more than halve the interest charged (£30).

“The volume of online credit card transactions rose 5.3% year-on-year, according to UK Finance. It is understandable that consumers want to use their credit card for online payments, as these can protect shoppers 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.

“As both the value and number of transactions on credit cards rise, it is essential consumers monitor their debts and adjust their repayments accordingly. Making a habit of reviewing a credit report is wise, as any incorrect information may have a negative impact on their score if not corrected. Providers look more favourably on consumers who can prove they are sensible with any debts, but no one is guaranteed to get the top deals. This makes it essential to shop around but be conscious not to run too many credit checks when looking for short-term credit.”