A financial expert has given advice on how to avoid a rise in credit card rates as the Bank of England voted to raise interest rates to 1.75%.
Consumer price index inflation is also expected to hit its highest level since September 1980 in two months, rising to 13.3% if regulator Ofgem raises the bill price cap. energy at around £3,450, Bank forecasters said.
Energy prices will drag the economy into a five-quarter recession, with gross domestic product (GDP) shrinking every quarter in 2023.
READ MORE – Cost of living: interest rates rise as inflation is expected to reach 13% in October
While the purchasing power of citizens has once again weakened, measures exist to ease certain financial worries.
Simon Read, a personal finance journalist, gave advice on how to avoid a credit card rate hike on the BBC News Live Blog covering rising interest rates.
He wrote: “Keep an eye out for any messages from your credit card company in the coming weeks.
“If they decide to increase the interest rate charged on your card, they will have to notify you.
“But did you know you don’t have to take a raise?
“If this increases the interest rate on your card, you should have 60 days to decline the increase and then pay off your balance at the existing interest rate.
“You will no longer be able to use the card but at least you will reimburse it at a lower cost.
“But if you can afford to wipe out the debt and close the card, the increased interest rate charged could be a powerful motivator to get your debt under control.”
The Bank of England has said it expects inflation to come back under control in 2023, dropping below 2% towards the end of the year.
“The UK is now expected to enter recession from the fourth quarter of this year,” the Bank’s Monetary Policy Committee (MPC) said.