Michelle Slade, an analyst at Moneyfacts, said: “With increasing costs on all household bills, many people are relying on their credit card to get by each month.”

“But these people are going to find themselves out of pocket as purchase and cash rates, along with charges, continue to increase,” Ms Slade warns. “Since the beginning of the year there have been numerous increases to rates and charges, with some cash rates being increased by over 7 per cent and purchase rates by as much as 3 per cent.”

The research shows that, since earlier this year, there have been 22 purchase rate increases, 15 cash rate increases and over 30 increases to fees such as balance transfer fees, cash withdrawals fees and foreign usage loading.

“The number of increases to purchase APRs is quite phenomenal. Normally credit card providers avoid such increases as these are the rates customers see first,” Ms Slade said.

“For example anyone with £5,000 of purchases on the Nectar Credit Card AMEX repaying the minimum 2.5 per cent, min £5, the 3 per cent increase will find themselves paying an additional £1,823.75 in interest over the life of the debt.”

She recommends: “The first thing to do when looking for a new credit card is to look at how you will use the card. If you have an existing debt on a card, it may be worth considering a 0% balance transfer deal. If you are looking to make some new purchases, you may wish to consider a 0 per cent introductory purchase deal.”

On the plus side for consumers, Moneyfacts found that the credit card companies’ balance transfer and introductory purchase deals are getting more competitive, with some 0 per cent balance transfer offers extending to up to 15 months.

Samantha Owens, Head of Personal Finance at Moneyfacts.co.uk, comments: “Whilst there has been growing concern in the credit card market, with a reduction in the number of applications accepted and providers increasing rates for both purchases and cash, the deals on offer at the top end of the market have not been affected.

“This time last year, for purchases, the best deal was 12 months and for balance transfers was 13,” Ms Owens says. “In the current market’ deals on balance transfers for 13 months are commonplace and credit card companies have to compete to attract new customers.”

She stressed that credit cards with 0 per cent deals deals should not be treated as a licence to spend, because at some point the balance would have to be repaid.

However, consumers with balance transfers will benefit from 15 interest-free months with only one fee, and those who need to make a larger purchase will be able to repay it over a longer term without any additional cost.

© Fair Investment Company Ltd