This guide will tell you how CREDIT CARD interest rates have CHANGED since 2009

CREDIT card providers have quietly hiked the price of unpaid debt for customers since 2009 - despite ultra low market interest rates.

The average credit card had a purchase rate of 17.7 per cent back in March 2009, but this has subsequently increased to an all-time high of 22.3 per cent, according to Moneyfacts.co.uk.

By comparison interest rates on mortgages and small loans have fallen to record lows.

Bank of England cut core interest rates to record lows of 0.25 per cent from their seven year level of 0.5 per cent.

And Governor Mark Carney warned banks there is no excuse to not pass on the savings to customers.

HSBC and Virgin Money have since announced a 0.25 per cent cut to their Standard Variable Rates (SVRs) applicable to mortgages - and more lenders are set to follow suit to offer lower rate loans.

But credit card providers are expected to keep with their current trend of edging up Annual Percentage Rates (APRs).

Instead, providers are using cheap money to lure in new card customers with increasingly tempting offers to move debts.

The top interest-free period for balance transfers has progressively increased since 2009 and borrowers can now pay nothing on switched debts for a whopping 40 months - more than three years.

However, providers know that many of these borrowers will not repay their debts within the promotional period.

And the underlying rates on the cards, which customers sit on after promotional periods end, has not fallen - and in many cases has increased.

Credit card borrowers have now been urged to make sure they switch debts to low rate or interest-free credit cards, instead of languishing on their provider's APR.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: " “Borrowing £4,000 on a card charging 18.9 per cent APR will cost £1,097 in interest and the debt would linger for two years and 10 months if a repayment of £150 is made each month.

"However, if a borrower opted for a credit card charging 5.9 per cent APR from Tesco Bank, the lowest rate currently on the market, and made the same repayment, then they would save £807 in interest.

"And if they used the best interest-free credit card and paid back the debt before the offer ended, then they could avoid accruing interest charges altogether.

"The real danger with credit cards is that consumers can become too comfortable with debt.

"Larger credit limits mean that it’s too easy to innocently increase the amount of money owed, and this can lead to a never-ending vicious cycle of debt. Borrowers should always aim to pay over the minimum repayment to clear debts sooner."

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