Rachel Springall, 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 (June 2006). The average purchase APR, average purchase rate and average cash rates increased during Q2 2025, despite a cut to the Bank of England base rate in May. A combination of factors led to a hike, with Halifax and Bank of Scotland increasing their purchase and cash rates during the quarter, but new credit cards were also launched onto the market. One such deal from Zable is suited to consumers who have a limited credit history and find it difficult to acquire a typical credit card. Providers must continue to offer an array of options, such as for those who may only need to borrow small amounts sparingly, in hopes to improve or create their financial footprint. If borrowing options become scarce, it can result in consumers using more expensive forms of credit in desperation.
“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 Q2 2025, however, the cost to move debts rose, making it essential for borrowers to weigh up the upfront 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. According to the Money Charity, supported by Vanquis Bank, the average credit card debt per household stands at £2,579, which could be cleared using a 0% balance transfer card in around two years if someone repaid just £115 every month, taking into account an upfront transfer fee of £64.
“Consolidating debts is essential for those struggling with multiple debts, particularly if they are accumulating a high rate of interest. An unsecured personal loan is a sensible choice for consumers to merge their debts into one place, and in positive news, loan rates have fallen over Q2 2025 to low levels last seen outside of this quarter in 2023. Those who plan to borrow a small sum of £3,000 this year will be pleased rates have plunged during Q2, compared to Q1 when rates escalated to a six-month high. Whether now is the right time to secure a deal or if a credit card would be a more flexible option will come down to someone’s individual circumstances. Therefore, it’s wise to seek support from a debt advice charity to get on the right path to pay off debts.”
Rachel Springall, 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 (June 2006). The average purchase APR, average purchase rate and average cash rates increased during Q2 2025, despite a cut to the Bank of England base rate in May. A combination of factors led to a hike, with Halifax and Bank of Scotland increasing their purchase and cash rates during the quarter, but new credit cards were also launched onto the market. One such deal from Zable is suited to consumers who have a limited credit history and find it difficult to acquire a typical credit card. Providers must continue to offer an array of options, such as for those who may only need to borrow small amounts sparingly, in hopes to improve or create their financial footprint. If borrowing options become scarce, it can result in consumers using more expensive forms of credit in desperation.
“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 Q2 2025, however, the cost to move debts rose, making it essential for borrowers to weigh up the upfront 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. According to the Money Charity, supported by Vanquis Bank, the average credit card debt per household stands at £2,579, which could be cleared using a 0% balance transfer card in around two years if someone repaid just £115 every month, taking into account an upfront transfer fee of £64.
“Consolidating debts is essential for those struggling with multiple debts, particularly if they are accumulating a high rate of interest. An unsecured personal loan is a sensible choice for consumers to merge their debts into one place, and in positive news, loan rates have fallen over Q2 2025 to low levels last seen outside of this quarter in 2023. Those who plan to borrow a small sum of £3,000 this year will be pleased rates have plunged during Q2, compared to Q1 when rates escalated to a six-month high. Whether now is the right time to secure a deal or if a credit card would be a more flexible option will come down to someone’s individual circumstances. Therefore, it’s wise to seek support from a debt advice charity to get on the right path to pay off debts.”
