Rachel Springall, Finance Expert at Moneyfacts, said:

“The cost to borrow on credit cards has reached a record high, making it vital for borrowers to repay their debt if it’s bearing interest, or switch it to an interest-free offer. However, the cost to transfer debts has also risen over the past quarter, and consumers looking for a 0% purchase offer will find the availability of products stalled. The cost of living may result in some borrowers turning to short-term credit, such as a credit card or their overdraft, but due to the cost of interest, these should only ever be used temporarily to cover essential or unexpected expenses.

“A recent study by UK Finance revealed that over the 12 months to February, outstanding balances on credit card accounts grew by 9.5%. As the number of 0% purchase deals stalled this quarter and the number of 0% balance transfer offers fell, providers may well be cautious surrounding such a rise and conscious of those who remain in persistent debt. Borrowers will need to carefully plan their repayments to ensure they are in the best possible position to pay off their debts as soon as they can. One way to do this quickly is to change a minimum repayment to a higher fixed sum every month, which can be changed back should the need arise.

“An unsecured personal loan could be ideal for borrowers who want a fixed monthly repayment plan and know exactly when their debts will be repaid. However, the cost to borrow £5,000 over three years has risen to its highest level in over a decade. Borrowers will need to decide whether a loan is the right choice versus a more flexible credit card, but they can seek advice if they are unsure. Seeking advice from a debt charity or asking for support from an existing lender is always wise to better manage repayments and find out ways to avoid high interest charges.”