With the cost of borrowing set to rise again and an increase in the number of people being declared bankrupt there is no better time than to start thinking about credit card debt reduction.

Every purchase made on a credit card means you have less money to spend than if you had paid cash. Buying today on a credit card means that because of the additional interest you will have less money to spend in the future.

Interest on credit cards means that if you buy something for 100 then it costs you about 1.5% of that 100 each month. That means if you pay it off over a year it has cost you something around 15% more than the cash price. If it takes you longer then the bill just keeps rising month on month.
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The Bank of England Moneterary Policy Committee decided to raise interest rates by a quarter of a percentage point last thursday. The rate is now 4.75%.
It was an unexpected increase and it follows a worldwide trend. Australia raised it’s rate to 6% earlier in the week and the European Central Bank have also increased their rate to 3%, it’s fourth increase in the last eight months. The USA has been steadily increasing rates over the last year or so and it is now set at 5.25%

It is expected to mean a rise of Ò£12 per month on an average mortgage of Ò£80,000. The credit cards companies are sure to increase their rates too.