Research by financial analyst Datamonitor found that, despite recent criticism of the industry, average APRs (the standard measure of interest rates) have fallen faster than base rates over the past five years, annual fees have been all but eliminated, and perks have become widespread.

The report contrasts sharply with recent comments by the Treasury Select Committee, which criticised the industry for its lack of transparency, high charges and irresponsible lending policies.

MPs are calling for card issuers to provide clearer information and, from next March, a fact box explaining key elements and pricing structures will be introduced to advertising.

Edward Ripley, the author of the report, said: “The market is not as bad as some have said.”

“The pricing structure of the industry has changed completely, largely down to increased competition,” he added.

Since January 1998, average APRs have fallen by 4.5 percentage points from 20.1 per cent to 15.6 per cent, while base rates have fallen just 3.75 points.

Over the past decade the proportion of credit cards charging an annual fee has fallen from 80 per cent to less than two per cent, while 98 per cent now offer reduced balance transfer rates, compared with none in 1993.

However, the report highlights that many of the high street banks have failed to move credit card rates in line with the overall trend.