Banks are jacking up the cost of borrowing as more people fail to repay their debts.
Credit-card charges and the price of personal loans both jumped in the last three months, according to a Bank of England report.
Lenders are also turning down more applications and cutting credit limits, a trend they expect to continue.
Details emerged on the same day as the Government's Better Deals For Consumers white paper was published.

Some said: "Personal loans start at 8% even though the Bank of England base rate is only 0.5%.This is because the banks know bad debt will rise as unemployment is
increasing and more people won't be able to keep up their repayments. They have put up their rates in order to build up funds to cover these bad debts but it is bad news for borrowers". Mirror