But savvy borrowers could avoid higher costs by taking advantage of longer interest-free periods.
Using a credit card for your spending has become more expensive as the average purchase annual percentage rate (APR), which includes the cost of interest and any card fees, rose to 35.7% APR in June 2025.
This is the highest this figure has been since at least June 2006 when Moneyfacts’ records began, according to data from the most recent Moneyfacts UK Unsecured Lending Trends Treasury Report.
By contrast, the average credit card purchase APR stood at 35.3% one year ago and just 31.2% in June 2023.
“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,” explained Rachel Springall, Finance Expert at Moneyfactscompare.co.uk.
“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,” she noted.
Interest-free offers thrive
However, it’s not all bad news for borrowers as the number of interest-free credit card deals on the market increased to a two-year high in June. There were 64 interest-free purchase credit card offers available at the start of the month, while the number of interest-free balance transfer deals rose to 67.
Borrowers not only have more 0% interest deals to choose from, but they can also benefit from longer interest-free periods. Indeed, the average interest-free period on credit card purchases rose from 267 days in March to 286 days in June, the longest this has been since October 2022 when the average term stood at 300 days.
The positive activity has continued into June, with the longest 0% purchase period increasing to 25 months after TSB extended the term on its Platinum Purchase Card Mastercard last week.
