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Is your credit card offering value for money?

As UK interest rates remain at 0.5% there is a need to look at each and every type of finance available to you and make sure that you make the right move for the short, medium and longer term. While it is correct to say that the loan and savings markets are very difficult at the moment, the savings rate is very low and loan liquidity is also very low, this does not mean you should not consider your overall picture.

As we have mentioned on numerous occasions, credit card interest rates have been rising for some time even though UK base rates continue to fall. In a perfect world, many people would look to convert their credit card debt into a long-term structured loan but unfortunately due to liquidity problems and potential credit rating issues, this particular avenue may not be open to everybody. However, this should not stop you from attempting to convert your high interest rate debt into a lower interest rate more structured instrument which will allow you to budget for the future with more security.

Many people automatically assumed that UK credit card rates would fall as UK base rates fell but this has not been the case. As credit card customers continue to defer on repayment of their debt, interest rates continue to rise as credit card companies look to maintain and protect their profitability. It is a very difficult situation and one which will ultimately cost the UK consumer in the shape of more expensive debt, at least in the short term.

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