Credit-card interest rates are rising despite the low interest rate environment, the Consumer Council warned today.

The high borrowing costs contrast the current mortgage lending rate of 2% and the deposit rate of below 1%.

Of 21 credit cards recently surveyed, 52.4% charged consumers carrying a card debt of 30% or above for annualised interest while only 13.6% of providers charged in 2006.

Financial institutions charge consumers an annualised interest of 8.4% to 36% for retail purchases and 20.6% to 37.5% for cash advances.

The study showed credit cards usually provide an interest-free repayment period of 46 to 90 days, but only two card issuers provided interest-free repayment period for new spending.

All credit cards offer a rewards programme with a redemption period of one to five years, with most of them providing a cash rebate at rates of 0.357% to 1%.

Consumers should monitor reward calculation as the varied redemption criteria can make comparison difficult.