Last week I wrote all about the impact on mortgages and what to do if you are worried about your options. It’s incredibly hard to predict what the future might hold right now, but most of the experts in finance, economics and mortgages I’ve spoken to suggest we’ll need to plan for a pricier time till at least 2024.

Of course, while rising mortgage rates can have the most dramatic effect on your finances, there are other financial products that are affected by the rising base rate. Here’s my guide.

Credit cards

Credit card interest rates often move in line with rises in link with the BoE interest rate – but the card provider must give you notice of changes to the rate in advance

Credit card interest rates are constantly changing and often move in line with rises in link with the BoE interest rate (though I don’t often see them come down). This tends not to happen straight away though – and the card provider must give you notice of changes to the rate in advance.

This can sometimes mean you can escape a rise if it’s too expensive. The Consumer Credit Act says credit providers must give you 30 days’ notice before the price increase occurs. You then have 60 days to ‘reject’ the rate if you are unhappy.

Of course, this doesn’t mean you get to waltz off into the distance without paying. When you end the arrangement the money you owe becomes payable. However, the card provider must allow you to pay back the money in a ‘reasonable’ amount of time and at a rate you can afford. If you are going to go down this avenue, do a mini budget and have it handy so the credit firm knows your circumstances.

In the past, I’ve heard from readers who have not been offered realistic deals, so if you still can’t afford the debt, make a complaint. You might also be able to switch the debt to an interest-free credit card – but this will incur a fee and you’ll need a bit of discipline when it comes to paying off the debt.

Savings

Huge controversy has abounded because many banks have failed to provide decent interest rates for savers that match the base rate rise – while whacking up the interest on mortgages and loans. This is particularly frustrating as if decent rates were more widely available, then more people would save and inflation would drop as we’d be saving not spending.

However, there are a few good deals out there if you are willing to lock in your money for anywhere from seven to 30 days up to five years. MoneySavingExpert has great comparison tables.

Loans, car finance and credit agreements

A loan or credit agreement that you have already should not fluctuate as a result of the current chaos in the financial markets. However, it is going to become more expensive to borrow money. We are already seeing rises in the cost of borrowing.

Worryingly, the payday loan industry, long assumed to be dead and buried, is back and has had a makeover. However, all that has changed is the loans run for a slightly longer period instead – the interest rates are still shocking. Don’t use high interest loans to borrow your way out of debt. Speak to StepChange if you are struggling.

Overdrafts, loans and credit

To my intense annoyance, banks now charge complicated fees for using your agreed overdraft by the day. This means the longer you are in an agreed overdraft, the more you will pay – and that’s even before you go over the limit. So being stuck in the overdraft is actually one of the most expensive ways to ‘borrow’ money.

Banks are obliged to help you if you say you are in financial difficulties and the regulator has given them wide ranging instructions on how to do this. It’s possible they could turn your overdraft into a low or even no interest loan in return for you abandoning the overdraft. You can then pay back the money at a rate you can afford.

Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist. Visit martynjamesexpert.co.uk

Interest rates: What do rising rates mean for your finances? - Martyn James

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