Credit card providers are poised to hit "problem" customers with higher interest rates as they attempt to protect their profit margins, a new report has warned.

Defaqto, the financial services research company, says persistently late payers face higher interest rates and card providers are likely to introduce annual fees after the Office of Fair Trading's decision to cap card charges at £12 earlier this year.

Credit card firms are also facing further regulatory action over costly Payment Protection Insurance. Defaqto estimates that the cost to consumers wanting to receive £100 of monthly credit card protection varies from £5 to a massive £28.33.

Defaqto’s report "Credit Cards in the UK – Protecting Margins" reveals that Co-Operative Bank has already introduced a £2 a month charge for its Platinum Base Rate Tracker card.

David Black, the head of banking at Defaqto says: "Annual fees will more likely be introduced for people who pay off their balance every month rather than for those who carry debts. Those who have debts on their cards are more easily targeted by an increase in interest rates."

The report adds that credit card firms are proposing to share more information on credit card customers, which has been preceded by an increase in balance transfer fees for people moving cards and a reduction in the zero per cent offers for balances of more than £1,000.

Just Britannia Building Society, Sainsbury’s Bank, Ulster Bank, Norwich and Peterborough Building Society and Stroud and Swindon Building Society do not impose balance transfer fees.

Defaqto believes some providers will withdraw from the market over the next few years. Cahoot’s credit card was closed to new customers at the end of September but it has not ruled re-entering the market and is still servicing existing customers.