British households borrowing on plastic faced a representative credit-card APR of 24.71% in September, according to the Bank of England's monthly quoted-rate series for sterling lending.
That benchmark is a volume-weighted average across banks and building societies, not the rate any single applicant is guaranteed to receive. It nonetheless frames how expensive revolving credit remains even as the Bank of England debates how many more hikes markets should price in over the next year.
What borrowers actually pay
The effective interest rate on balances that actually accrue interest was 21.55% in August, up from 21.45% in July, in the central bank's Money and Credit release. That measure captures real-world pricing after promotional 0% periods end, and it sits above the 9.96% effective rate on new personal loans and the 20.27% rate on interest-charging overdrafts.
Why APR headlines diverge from offers
Comparison sites still advertise representative APRs near 24.9% on mainstream rewards and balance-transfer cards, with individual pricing driven by credit scores and affordability checks. Section 75 protection on purchases between £100 and £30,000 remains a distinctive UK benefit, but it does not reduce the cost of carrying a balance.
Balance-transfer fees typically run 2% to 4% of the amount moved, and money-transfer offers can charge up to 4% for cash sent to a current account. Those fees are easy to miss when marketing emphasises lengthy 0% windows.
Persistent debt rules still bind issuers
Financial Conduct Authority persistent-debt rules require firms to contact customers after 18 months of minimum payments that barely reduce principal, and to offer a structured repayment plan or forbearance after 36 months. Firms must also refrain from raising limits for customers who have been in persistent debt for 12 months.
The regulator's earlier research found customers in persistent debt paid around £2.50 in interest and charges for every £1 of principal repaid — the policy rationale for those timed interventions.
Household stress into the budget week
Card growth near 13% year on year lands as Chancellor John Healey prepares the 28 October autumn statement and as mortgage holders reprice onto higher fixed rates. For households using cards to smooth grocery and energy bills, the gap between promotional rates and standard APRs is the margin that determines whether consolidation or a structured repayment plan is cheaper than rolling debt month to month.