A finance expert has given advice on how to avoid a credit card rate rise as the Bank of England voted to increase interest rates to 1.75%.
It is also expected that the Consumer Prices Index Inflation will hit its highest level since September 1980 in two months' time climbing to 13.3% if regulator Ofgem hikes the price cap on energy bills to around £3,450, the Bank’s forecasters said.
The energy price will push the economy into a five-quarter recession – with the gross domestic product (GDP) shrinking each quarter in 2023.
As people's spending power was once again weakened, there are some measures to ease certain financial worries.
Simon Read, a Personal Finance Reporter, gave advice on how to avoid a credit card rate rise on the BBC News live blog covering the interest rate rise.
He wrote: "Keep your eye on 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 give you notice.
"But did you know you don’t have to accept an increase?
"If it increases the interest rate on your card you should be given 60 days to reject the increase and then pay off your balance at the existing interest rate.
"You won’t be able to use the card anymore but at least you’ll be repaying it at a lower charge.
"But if you can afford to clear the debt and close the card, then the increased interest rate charged could be a powerful motivator to get on top of your debt."
The Bank of England said that it expects inflation to come back under control in 2023, dropping below 2% towards the end of the year.
“The United Kingdom is now projected to enter recession from the fourth quarter of this year,” the Bank’s Monetary Policy Committee (MPC) said.
