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The average credit card purchase rate continues to increase, so if you have outstanding credit card debt it might be time to take action.

According to MoneyFacts, the average credit card rate now stands at 18.1%, up from 16.3% two years ago. This may not seem like a huge hike, but in this environment every penny counts. Also as the interest rate rises it makes it more dangerous to allow your credit card balance increase also.

Michelle Slade, analyst at Moneyfacts.co.uk commented: "The increase comes from a combination of card providers raising rates, withdrawing competitive deals and the launch of new cards onto the market with higher APRs than we previously may have seen."

Slade says in the last six months, twelve cards have increased rates – this is worrying, especially because many people simply do not keep up with any rate changes on their cards. Do you know how much you pay in interest each month? If it's just the minimum, you might be just treading water – the website says that customers who repay just the minimum will be hardest hit now with an additional £408 in interest now being payable on a balance of £2,000.

She says: "With only a handful of cards on the market linked to tracking base rate, very few have seen any benefit from the current all time low base rate.

"Rising unemployment means that the risk of customers defaulting on their card repayments has increased, which is being passed on through higher rates. If customers are struggling with repayments, unsecured lending is one of first casualties as customers fight to keep hold of their property."

If you have a large credit card balance there is little chance of a reprieve for you. Rates are rising so it will be harder to pay off your debt. Talk to a financial adviser about what can be done about debt in this credit crunch; you may be able to remortgage, you may be able to take out a new loan altogether or you may have to seek alternative ways to make your unsecured, risky debt a bit more secure.

SOURCE: Moneyfacts, 04/06/09

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.