The cost of borrowing on credit cards has increased over the past four years, despite the base rate remaining at a historic low for the past 27 months.

This is according to data from Defaqto, which shows that the average representative APR for credit cards currently stands at 18.7 per cent, rising from 16.6 per cent back in July 2007.

"Credit cards have become much harder for people to obtain over the course of the last few years and … we have seen a significant increase in the standard interest rates that they charge," explained David Black, Defaqto's insight analyst for banking.

He highlighted that providers are now more prudent in who they will give credit cards to, which may be the reason behind escalating interest rates.

Furthermore, Mr Black pointed out that people who have excellent credit ratings are often given incentives to go in search of new products.