Interest rates will be reviewed by the Bank on England on Thursday, September 21. Many experts have warned that a rate hike could be on the cards with the City bracing itself for a figures that have been rumoured to go from the current 1.75% base rate as high as 2.25%. With this in mind, Martin Lewis has issued an urgent warning to anyone with uncleared credit card and loan debts.
While those sitting with an outstanding mortgage will be worriedly watching the rate announcements, Martin says that those with credit card or loan balances should also be aware. If expectations are correct and the base rate hike hits 2.25% it will be the highest figure for fourteen years.
Consumer champion Lewis, issued a warning. He said that "deals may get worse quite quickly. So if you need to sort yours out, sooner is safer..."
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Offering up ways that Brits could help themselves and guard against rate changes, Martin said that a 0% balance transfer could be a solution for those that can't afford to clear their debt.
Writing in his weekly newsletter, the Money Saving Expert founder wrote: "A 0% balance transfer is where you get a new card to repay debt on other credit or store cards for you, so you owe it instead but at 0%. As your repayments clear the debt itself rather than cover the interest, you get debt-free much quicker (if you don't borrow more)."
Citing cards that shift debt to a 0% for 34 months and loans at under 3%, Martin advised consumers to use an eligiblity calculator before applying. He said: "As each application marks your credit file, use a 0% Eligibility Calculator which shows your acceptance odds for each top card, so you can home in on the one you're most likely to be accepted to without any creditworthiness impact".
He also advised to aim for the card with the lowest fee but which had long enough to clear the debt. He added: "Many balance transfer deals charge a one-off fee of the amount of debt you transfer, so minimise that." Adding that if you are unsure you should "Play safe & go long".
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