Interest rates on credit card debt `highest in 13 years`

The average credit card rate has reached 19.1%, according to comparison website Moneyfacts.co.uk - the highest it has been since 1998.

Since the beginning of the year, interest rates on 18 credit cards have increased, compared with just four over the same period in 2010. The rate increases range from 0.6% up to 2%.

Michelle Slade of Moneyfacts.co.uk commented: "It is unlikely we have seen the last of the increases and we expect more providers to follow suit."

But she added that some customers are benefiting from better promotional deals. "While credit card interest rates have risen, customers are now being offered the longest-ever zero per cent balance transfer and introductory purchase deals."

An expert at debt management company Gregory Pennington said: "In the current financial climate, we should all be cautious about debt, but higher credit card rates provide all the more reason to be careful. The higher the rate, the faster that debt could grow if the borrower finds themselves unable to meet their repayments.

"Credit card borrowers can actually avoid paying interest altogether if they clear their balance in full every month, regardless of the rate. But those who don`t do this should have a clear plan as to how they`ll repay the debt."