UK Credit Card APR Soars To Nearly 25 Pct.

Interest rates on credit card balances in the U.K. are the highest they have been in 13 years, according to a report by the Financial Times.

Lenders in the country have stopped giving their best low interest rate deals due to new regulations by the Financial Conduct Authority (FCA) in an attempt to get control of deepening debt.

The average annual percentage rate for people making purchases with credit in September is 24.7 percent, which is the highest since Moneyfacts.co.uk started keeping data. Last year it was 23.4 percent.

“Consumers who turn to credit cards for their everyday purchases will find that the cost to borrow is starting to rise, as the most lucrative low rate cards have worsened,” said Rachel Springall, finance expert at Moneyfacts.“In fact, over the past quarter, we said goodbye to the lowest rate purchase credit card on the market and have seen rates increase on these lucrative offers.”

Previously, the card with the lowest rate on the market was Tesco Bank’s Clubcard, with a 5.9 percent interest rate, but Tesco Bank recently pulled it. Three prominent banks, the Bank of Scotland, Lloyds Bank and Halifax, all raised their rates from 6.4 percent to 9.9 percent.

“Once you are a customer, your card provider can increase your rate if they feel there has been a change in your financial circumstances and they see you as a greater risk,” said Andrew Hagger, personal finance expert and founder of consumer website MoneyComms.“For those people struggling with their finances, the last thing they need is a higher rate on their plastic.”

The yearly growth rate of balances that are outstanding has gone down from 8.3 percent at the start of last year to 3.6 percent now, and the size of credit card balances drawing interest has fallen to 53.4 percent, from 54.6 percent a year ago, according to a recent study from U.K. Finance, suggesting that more consumers are looking to go interest-free.