One in five (20%) credit card borrowers only made the minimum repayment on their most recent credit card bill, Compare the Market has found.

Research by the price comparison website revealed that less than half (48%) of borrowers are regularly paying off their credit card balance in full each month, suggesting that outstanding balances on cards are increasing as people struggle with the cost of living crisis.

Of these people, two thirds (66%) said they have been late paying their credit card bill within the last 12 months.

The average credit card debt in the UK now stands at £1,160.

This follows the Bank of England’s latest money and credit data, which revealed that credit card borrowing has increased 12.5% year-on-year.

Furthermore, separate card spending figures from UK Finance also show outstanding balances on credit cards have grown by 8.7% in the past 12 months.

The research by Compare the Market also found that the most common uses of credit cards are online shopping (52%) and holidays (48%).

However, the comparison website said that people could be missing out on future savings, as just 23% of people typically use their credit cards on purchases that will earn them rewards such as cashback or air miles.

More than two in five (41%) borrowers believe the length of the 0% interest period is a key feature when selecting a new credit card.

Just over one in five (21%) said the ability to transfer the balance from their old credit card is important, as 37% of borrowers have previously used a balance transfer to avoid paying high interest rates.

Chief growth officer at Compare the Market, Andy Hancock, said: "Credit cards can be a valuable tool for making purchases. For example, they often come with built-in consumer protection features including Section 75 of the Consumer Credit Act.

"That being said, when taking out a credit card you have to be mindful of not borrowing more than you can afford. It’s worthwhile paying off your credit card balance in full every month to avoid paying interest.

"If you’re looking to take out a new credit card, you should check in advance if you are eligible for the card."

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