Beat record credit card interest rates

The average cost of credit card debt has increased to a record high of 20.6% APR, according to new research from Moneyfacts.

That's up from 19.9% last year.

One factor behind this rise is the cap on interchange fees which will be introduced in October. When you're making a transaction, your bank sends your payment to the retailer's (acquiring) bank and deducts a small fee. This is the interchange fee. It mostly covers operating services such as fraud prevention and customer call centres.

However, the European Commission is introducing a cap on these fees, which is denting the profitability of credit cards. It's already led to the withdrawal of some rewards credit cards, with Capital One and RBS scrapping their reward schemes, and is now helping to push up the interest rates charged too.

Beating the fees

Of course, if you pay your bill off in full every month, you won't have to pay any interest, no matter what rate your card carries. But if you need to pay your balance off in stages, you can still beat the fee rise by making use of a 0% credit card.

The top 0% balance transfer credit cards

If you have a big chunk of debt already on a credit card and need to pay it off in chunks, then check out the longest 0% balance transfer deals on offer today:

Credit card	0% period on balance transfers	Balance transfer fee	Cost of transferring £2,000 balance	Representative APR
Barclaycard 36 Month Balance Transfer Visa	36 months	2.49%	£49.80	18.9%
Virgin 36 Month Balance Transfer Credit Card MasterCard	36 months	2.50%	£50	18.9%
Halifax 36 Month Balance Transfer Credit Card MasterCard	36 months	2.90%	£58	18.9%
Bank of Scotland Platinum 36 Month Balance Transfer MasterCard	36 months	3.00%	£60	18.9%
Barclaycard Platinum 35 Month Balance Transfer Visa	35 months	2.39%	£47.80	18.9%
MBNA Platinum 35 Month Balance Transfer Visa Card	35 months	2.69%	£53.80	18.9%
Tesco Bank Clubcard Credit Card for Balance Transfer MasterCard	35 months	2.70%	£54	18.9%
Lloyds Bank Platinum 35 Month Balance Transfer Credit Card	35 months	3.00%	£60	18.9%

See more top balance transfer credit cards

The top low-fee 0% balance transfer credit cards

If you're happier with a shorter interest-free period, you could get benefit from a lower (or free) transfer fee:

	0% period on balance transfers	Balance transfer fee	Fee paid on £2,000 transfer	Representative APR after 0% period ends
Santander 123 Credit Card*	23 months	None	£0	16.5%
Tesco Bank Clubcard 18 Month No Fee Credit Card	18 months	None	£0	18.9%
Halifax All in One Credit Card	19 months	1%	£20	18.9%
Barclaycard Platinum	24 months	1.15%	£23	18.9%
Virgin Money Balance Transfer Credit Card	26 months	1.25%	£25	18.9%
Barclaycard Platinum Balance Transfer Credit Card	28 Months	1.35%	£27	18.9%

*Annual fee of £24

The best 0% purchase credit cards

If you have some big purchases coming up in the near future, like a new boiler or a fridge, an interest-free purchase credit card might be the best bet:

Credit card	0% period	Representative APR
Santander 123 Credit Card MasterCard*	23 months	16.5%
Tesco Bank Clubcard Credit Card for Purchases MasterCard	21 months	18.9%
Clydesdale Bank Gold MasterCard	20 months	18.9%
Yorkshire Bank Gold MasterCard	20 months	18.9%
Halifax Purchase Credit Card MasterCard	20 months	18.9%
Sainsbury's Nectar Purchase Credit Card	19 months	18.9%
Lloyds Bank Online 19 Month Platinum Purchase MasterCard	19 months	18.9%
Bank of Scotland 19 month Platinum Purchase MasterCard	19 months	18.9%
M&S MasterCard	19 months	18.9%