The average APR of a secured loan is now “much cheaper” than average APR of a credit card, according to research undertaken by secured loan broker Creditlink.

The firm compared data from the latest Moneyfact report and found the average purchase rate on credit cards had hit its highest peak for 18 months with an APR of 19.1%, compared to the average APR on the secured loans Creditlink completed in the same period being 14.3% APR.

Ceri Harris of Creditlink said: “Credit cards are only a good tool if they are used as they are meant to be used – for short term convenience, with the total balance paid off within a short period of months.

“More and more often we are seeing people who are only paying the minimum repayment each month, which means their credit card debt could last them 20 years, and see them pay back thousands more in interest than they had planned when they used the card.

“For customers in that situation, a secured loan is far better option; not only do you know when the balance will be repaid in full, but as our research has shown, the APR’s compare extremely favourably at the moment.”