The total amount outstanding on the nation’s credit cards has surged by almost £5 billion – around 10 percent – in a year to reach just over £65 billion.

New figures from the banking industry trade body UK Finance found that around half this figure – 49.8 percent – incurred interest with APR rates often charging as much as 30 percent.

The net effect is that people who are relying on credit card to cover everyday expenses, such as food, clothes and energy, are facing punishing interest rate bills.

New figures from the banking trade body UK Finance show outstanding balances on credit cards rose by 9.9 percent over the 12 months to March this year.

Mortgage brokers warn it is becoming increasingly difficult to find a bank or building society to offer a home loan to someone weighed down with high levels of credit card debt.

Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said: “Increasing balances on credit cards is a huge problem. It’s been made worse by higher interest rates and the cost of living crisis.

“It’s fueled by the use of credit cards to cover day-to-day household bills and is made worse by the lack of balance-surfing, with more borrowers having to suffer rates in excess of 25 percent per year rather than the 0 percent options enjoyed for years.

“With less appetite from mortgage lenders to consolidate unsecured debt, the spiral of expensive card borrowing is not abating while mortgage rates remain high.”

Dariusz Karpowicz, Director at Doncaster-based Albion Financial Advice, said: “This rise in debt is starting to impact people’s ability to get a mortgage, as higher outstanding balances can negatively affect credit scores and overall affordability assessments.

“We’re seeing more clients struggling to pay down their credit card debt, which complicates their mortgage applications.”

He said it is time for the Bank of England to cut the base interest rate and said, in the meantime, borrowers should focus of managing their debit and building a healthy credit score.

Andrew Montlake, Managing Director at London-based broker, Coreco, told Newspage: “People living with sizeable credit card balances that they can’t shift is becoming more and more common.

“The cost of living crisis, coupled with higher mortgage rates, has impacted people’s ability to pay their credit card balances in full.”

Aaron Strutt, Product and Communications Director at Trinity Financial, said many people have no idea that lenders use affordability calculators to determine their borrowing ability.

He said: “Loan sizes are typically reduced when people have credit cards, loans, cars on finance, and childcare fees If people have unsecured debt, such as 40 percent or 50 percent of their salary, they may struggle to get a mortgage, although lenders have different acceptance criteria.”

Riz Malik, Director at Southend-on-Sea-based R3 Mortgages, said: “Credit card debt is spiralling, and we have noticed it is increasingly impacting borrowers when it comes to affordability calculations!

Many people have tried to consolidate credit card and other debt by adding it to their mortgage. However, Graham Cox, Director at Bristol-based Self-Employed Mortgage Hub, said: “It’s a good solution for many, but the danger is consolidating debt can become addictive. And unless you make overpayments, it’s often more expensive in the long run, as the interest is paid over the entire mortgage term.”

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