Debt levels poised to skyrocket as cards become more costly

Credit card companies are continuing to make borrowing money more expensive, fuelling predictions that consumer debt levels will soar this year.

According to a study conducted by price comparison site Moneyfacts.co.uk, since the start of the year rates have been raised on 15 credit cards.

The site also detected 30 increases to fees, which include balance transfer fees, cash withdrawals fees and foreign usage loading.

Michelle Slade, analyst at Moneyfacts.co.uk, 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."

The squeeze on household finances brought about by higher food prices and more expensive borrowing is thought to have fuelled a 4.3 per cent increase in the number of people opting for individual voluntary arrangements (IVAs) during the first three months of this year.