Credit card APRs have hit a 13-year peak(Getty Images)

Squeezed Brits are being hit with yet more financial woe as new figures reveal the average credit card interest hit a 13-year high this month.

Research from Moneyfacts.co.uk showed that the average rate offered on plastic has now hit 18.9%, despite the Bank of England base rate standing at a record low of 0.5% for almost two years.

That means borrowers with £5,000 debt on their card will now repay an additional £2,360 over the life of the debt than they would have in February 2006, assuming that they only meet the minimum payment each month.

The news comes as the increased VAT, high inflation and rising unemployment continue to erode our spending power. So what's behind the increase? And what can you do to beat it?

Compare credit cards

Job fears
While many of us are worried about rising joblessness, it's also a big concern for credit card providers, which face the risk of more people defaulting on their borrowing when unemployment rises.

These fears are unlikely to recede anytime soon, with job losses expected to continue rising throughout this year. On top of that, new lending restrictions placed on credit card providers could lead to further rate hikes.

Michelle Slade, spokesperson for Moneyfacts.co.uk, cites one example: "Since the beginning of 2011 most card companies have moved to a positive order of repayments. This dent in their revenue stream is likely to mean customers will continue to see rates rise rather than fall."

Credit card rates since 2007(Source: Moneyfacts.co.uk)

The graph above shows how credit card rates have soared since 2007

More bad news for borrowers
And while unhappy customers may have once found it easy to register their distaste at rate rises by simply switching to a rival provider, things are no longer quite so simple, as Slade explains.

"Customers who would previously have switched to another provider are now finding it's not so easy to do so," she said.

"Competitive deals for balance transfers and introductory purchases remain on offer, but card providers are selective over exactly who they accept for these deals."

As a result, it's perhaps more important than ever that you take the measures you can to keep your credit profile attractive to potential lenders.

Get a free trial of your credit report


How to beat the rate hikes
A good way to beat the hikes is to ensure you qualify for the best deals out there - and you can do that by ensuring you maintain an excellent credit rating. Put simply, the better your rating, the more attractive a proposition you are to lenders, and thus the greater the likelihood of getting accepted on the best deals.

For a full range of expert tips, take a look at our guide to improving your credit rating.

And of course, once you've done all that, it pays to scour the market to ensure you're getting the best deal you can for your needs. And don't forget that the best way to ensure you're not paying out more than you have to is by paying your debt off as quickly as you can.

Compare credit cards

Related Links

New credit card rules: how to get the best rates
Get a free trial of your credit report
MSN Money's guide to credit reports