Commenting on the decision of the Bank of England to raise interest rates to 0.75%, Tashema Jackson, money expert at uSwitch.com, says: “This increase in the Bank of England’s base rate will see the cost of borrowing rise for consumers as the era of cheap credit comes to an end. With millions of hard working families reliant on debt to simply get through the month, this and it’s likely knock on effect will serve as a real wake up call.
“First affected by this rate hike will be the third of mortgage holders who are currently on their bank’s standard variable rate, as well as those on tracker rate mortgages – with the increase almost certainly passed on immediately. We are likely to see other changes too, such as lower introductory periods on credit cards or higher fees on overdrafts. Inevitably, fixed term mortgage deals will also see a jump in interest rates as the banks adjust their offers in response.
“If you are on a standard variable rate mortgage, or looking for a long balance transfer credit card, take a good look at your finances and consider if you need to act now. There are still a number of good deals out there which, if they match your circumstances, may help you manage your debt more easily.
“This rate rise is likely to have an impact on all borrowers, so if you are worried about what it means for your finances, speak to your lender. For many, the impact won’t be instant, so you still have time to get your finances in order.”
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