Experts have warned the country could be facing a ‘credit card boom’ as millions of people are lured deeper into debt with ‘reckless’ credit cards.

Despite the fragile state of the economy and warnings of a potential double dip recession, banks are being accused of luring customers into debt using offers on credit cards that are more attractive than those available before the recession.

Many banks are offering cards with eye-catching interest-free benefits aimed at encouraging customers to borrow. Credit cards are being offered with an average interest-free introductory period of 12.2 months, this is even longer than the interest free rates available at the peak of the credit boom in July 2007.

Other offers available on credit cards include cash rebates and interest free balance transfers, encouraging borrowers to move their debts between cards.

The interest free benefits may be ideal in the short term but once the zero per cent period has expired, the rate at which the borrower pays back will soar.

Kevin Mountford, head of banking at moneysupermarket.com said: ‘A key danger of borrowing this “free money” is that you go beyond the zero per cent period. While interest-free periods may be getting longer, the sting in the tail is that the rates of interest charged once they end are also increasing.’

Stewart Hosie, a member of the Commons Treasury select committee, said: ‘These may be good deals to help credit card customers in the short term, but the sting in the tail could be more punitive rates later. Of course credit card companies are businesses, but I would ask them to have not just attractive deals for new customers and transfers, they should make sure they have affordable rates all the time. There is no point offering great introductory deals if people cannot service that debt.’

Figures from the Office for Budget Responsibility estimates the average British family of four will borrow £24,000 more during over next five years. It predicted household debt will top £1.8 billion by 2015.

Andrew Hagger, from comparison site moneynet.co.uk, said: ‘The danger is that a lot of people take the cards out to help them clear their debt, but when reality comes, they continue to spend on their card and end up in as bad a situation as ever. The banks will be hoping that people aren’t as clever with the deals as they could be, and that they won’t succeed in using zero per cent deals to clear off their debts. If everyone did this, banks would not be in a good position at all. These offers mean the temptation is there for people to get into debt. People who perhaps have seen their overtime disappear, who are on less income will look at this as a way out. But if they don’t deal with their debts properly, it could be the banks who win in the end.’

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