The last month, the average rates on credit cards hit their highest level since 1998, with credit card borrowing growing at its fastest pace since 2005.
In July, the Bank of England's quoted household interest rate data showed that average credit card rates jumped by 0.23 percentage points from June to 21.66 per cent, the highest average monthly rate since December 1998 22.19 per cent. Rates for 10 k personal loans rose to 4.18 per cent a six-year high.
In July, the rates for a 5 k personal loan went up by 0.07 percentage points to 8.27 per cent, a four year high.
Overdraft rates stalled in July but are still at all-time highs of 35.28 per cent.
ONS data found that 6 m people are using more credit than usual because of the cost-of-living crisis.
With credit card rates at record highs in this millennium, it is important to take all necessary steps to get the most suitable product for their circumstances, according to David Hendry, Chief Marketing Officer at Freedom Finance. He said that it will be a difficult year ahead for household budgets.