Since the start of 2010, average credit card rates have hit a 12-year high. Strange, you might be thinking, since we’ve been enjoying the bank’s emergency rate of interest being set at 0.5%. Well, that just highlights that it isn’t all rates that have been on the increase. Essential, lenders have been targeting specific groups of borrowers and raising their rates without warning. This helps to keep the increase under the radar. High risk customers, those with poor credit ratings, tend to feel the brunt of this activity as the increases are introduced as an added punishment for going over their arranged credit limit and missing or making late payments. Of course, they are already penalised and charged for these things but that doesn’t stop them being punished again.

The Office of Fair Trading has put a limit of £12 on this type of penalty, limiting the lender’s ability to recoup the full sum from the missed payments. This loss of revenue was obviously not an option for the credit card companies, who simply looked elsewhere for the money. Pushing up the interest rates for lenders who feel that they aren’t in a strong enough position to argue may not seem a particularly fair way to do this but it’s the situation we find ourselves in.

It’s not just those who are considered to be potentially risky borrowers or those with a poor credit score who are currently having higher rates applied to their credit card accounts. Even those with a first rate, unblemished credit report are being hit with the big fees.

Right, so those with a great credit score are penalised and those with a poor credit score are being penalised. So, who’s not being penalised? Those safely ensconced in the middle? Even if you miss the odd payment, nothing severe but nothing too risky, you’re still fair game for the rate hike. Each case must therefore be looked at and judged on its own merits. With that in mind, should you find your rate has been increased, phone your lender and make tell them you’re leaving unless they readjust your rate, but always make sure this can actually be a possibility first. Get debt advice from an impartial financial advisor too. They’ll be able to assist you in solving a host of debt related problems.

Ultimately, there is no better way to avoid the rising interest rates on credit cards than to not have one. Freeing yourself from the stressful burden of bad debt is a priority for a lot of people but as everyone faces different financial difficulties, the debt solution that best suits their circumstances will differ too. For a free advice about how to deal with your credit debt, drop by www.harringtonbrooks.co.uk who can help find you the debt solution to your circumstances.

Unsecured personal debt can creep up on you. Outstanding credit card balances, a little on a couple of store cards, the odd unsecured loan and even your overdraft facility on your current account; it’s amazing how much debt we can simply take for granted, as a constant feature of our lives. You may feel that this debt is manageable, that you have greater financial problems than those that tick along relatively unobtrusively in the background, but it’s frightening how quickly these background debts can become serious concerns.

Recent studies have found that 1 in every 10 people in the UK is permanently overdrawn, with another 12% using their overdraft facility at least 5 times in the year and almost half of the population using it at least once. As bleak as this sounds though, it’s actually an improvement on the same time last year, when it was almost 2 in every 10 that were permanently in the red and over half depended on their overdraft at least once in the year.

At least we’re moving in the right direction. As personal finance has been such a hot topic for so long now, it’s perhaps only natural that individuals in the UK have taken advantage of the emergency rate of interest to pay off as much of their outstanding debt as they can. It’s great that fewer people rely on their overdrafts but the number of people who are permanently in their overdraft is still too high. Were they to find themselves faced with an unforeseen expenditure or emergency outgoing, this safety net may have already been used up. Also, should their circumstances change and they were to lose their source of income and means of paying off this debt, it can become a serious debt problem.

As inflation is rising, individuals will find it increasingly difficult to get themselves out of their overdrafts if they are used to living off them. Likewise, we could well see more and more people being drawn into this way of life, depending more and more on their overdraft to pay for ordinary expenditures, rather than saving it for emergencies. So, not only are we set to be hit with a sustained cost of living increase, research suggests that banks will also increase rates of interest on their customers overdraft facility.

For impartial advice on clearing your unsecured debt, from a dedicated debt advisor, visit www.harringtonbrooks.co.uk . Harrington Brooks are one of the longest established and most respected financial solutions institutions in the UK. Their professional advisors are on hand to offer debt help to those facing financial problems.

Everyone’s financial circumstances are different. The way we budget, manage our income and service our debts; all based on a diverse range of criteria, founded on our personal priorities. When we talk about personal finance, that’s what we mean. That’s why a “one size fits all” approach simply doesn’t work when looking to solve the Great British public’s debt problems. After all, each individual’s route into debt will have been based on a range of pressures and a different set of circumstances. Even the most common of credit streams, the overdraft, can be used in a variety of ways to suit your specific needs. Again, people use their current accounts in their own way, to suit their income. So, banks should apply any overdraft charges in a way that suits this individualised use of the service. Sadly though, this isn’t the case.

The charges imposed for inadvertently breaching your overdraft limit can be intensely frustrating and an argument has recently arisen over your banks power to halt any payments that would push you over your limit. In a recent survey by a leading UK consumer group, it was found that almost half of us would like to see banks ‘bounce’ payments that would take you over your arranged overdraft limit. Only 38% of those surveyed said they’d prefer that their bank honour such a payment and charge them accordingly. These findings were prompted by a Supreme Court ruling that unauthorised overdraft charges did not fall under the jurisdiction of the Office of Fair Trading.

This highlights two very different attitudes to what is, essentially, another form of credit. As a current account holder who goes over their overdraft limit, you are effectively being lent money without asking for it and then being charged an excessive amount for the service. Breaching your overdraft limit to any extent can incur fees of £35 or more but the actual cost to your bank for providing this service could be as low as £2.50. Therefore, these charges are generating an estimated £2.6bn of revenue for banks each year. The answer would appear to be offering this service only to customers who ask for it, allowing others to view their overdraft limit as just that. This is not without its difficulties though. Cheque payments which have been guaranteed with a bank card must be honoured. There is also the view that halting these payments could lead to more severe financial difficulty later. If, for example, you have direct debits set up to cover the cost of your utility bills and your bank was to ‘bounce’ one of these payments, the company could take legal action.

The range of financial circumstances facing British consumers is vast and varied. Even as a relatively small piece of the wider credit puzzle, an unauthorised overdraft can have serious implications on your personal finances. If you are feeling the pressure of mounting debt of any type, it’s important to get specialist debt advice to help you find the solution best suited to your circumstances. Harrington Brooks are one of the longest established and most trusted financial institutions in the UK. Their dedicated team of debt advisors can help you with all aspects of your debt problem and assist you in finding the right solution. Visit their website and try the free Harrington Brooks debt wizard for a quick and easy insight into the debt solution that’s best for you.

The Citizens Advice Bureau has reported that the number of people who have come to them for debt help has shot up over the past year. In fact, there was an increase of over 20% in the number of people who approached the service between July and September when compared to the same period last year. In those three months alone, they received 573,000 inquiries from individuals who were caught up in the spiral of mounting debt. It may not come as a surprise, due to the extent of the financial strife that has swept Britain over the “Credit Crunch” years but debt is now by far the most popular issue with service users. Since the recession started in earnest, around April of last year, they’ve dealt with over 3 million people’s debt problems.

It is essential to seek out debt help from a specialist as soon as you find yourself facing the pressure of mounting debt. The more quickly you react, the more debt solutions will be open to you. Also, the less severe these solutions will be. A popular area for debt help is advice on the best way to avoid bankruptcy. The implications of bankruptcy are serious and can include things like the loss of your home or other valuable assets. There are alternatives though. As everyone’s financial circumstances are different, there isn’t a one size fits all response to debt. The key benefit of specialist debt advice is a solution that’s tailored to suit your situation. As one of the longest established and most trusted financial institutions in the UK, Harrington Brooks are experts in the field.

If you are concerned about which is the right debt solution for you, there are few people who share Harrington Brooks extensive knowledge of the market. A quick visit to their website will let allow you to use their free Debt Wizard and in 15 seconds you’ll have a solution that is tailored to your specific debt problem. There is also detailed information on the different avenues that are open to you; whether it’s a debt management plan, a debt consolidation loan, an Individual Voluntary Arrangement or support with bankruptcy proceedings.

Perhaps the most common mistake among those currently facing debt problems is the stage at which they began to consider debt management. It may seem a little counter intuitive but it’s not smarter debt management if it only starts once you’re in financial strife. This is a little like shutting the stable door once the horse has bolted. Be debt savvy and get in the know before you owe.

Smarter debt management comes with advanced financial planning. Sit down with a calculator and work out a budget, taking into account all of your outgoings, your monthly earnings and the amount you can afford to repay. You want to manage your debt in such a way that ensures you’ll have credit available to you whenever you need it.

1. Know your budget. Manage your income and keep a close eye on your outgoings. This will give you a good idea of how much you can afford to pay back each month and help you to ensure smarter debt management.
2. Shop around for a good deal. You should really think about borrowing as you would shop for any other product or service. So shop smart, make comparisons and see what kind of rates are on offer.
3. Don’t get suckered in by the large print. As clever, astute shoppers, we all know that there can be hidden costs in the small print. However, phrases like “0% Interest!” and “No Money Down!” are designed to draw you in but can have a sting in the tail. Beware of hidden fees or exorbitant penalties or late payment charges.
4. Don’t just hand control of your repayment schedule over to your lender. Even though you’ll be grateful of the credit, stick up for yourself and be sure to come to an agreement that works for all parties. Smarter debt management relies on you taking control of the situation.
5. There is no shortage of debt advice out there, some a lot better than others, so use your brain! Find out as much as you can and see what makes sense to you. Don’t be shy about checking with the experts either. It is worth remembering though, just because someone has written a book, or has a debt-related web site, doesn’t actually make them an expert on smarter debt management. As a savvy debt shopper, look for the right credentials. Talk to a specialist like Harrington Brooks.

Harrington Brooks

One of the longest established financial practices in the UK 0800 048 1764