If you are still spending with plastic as a means of running away from your problems rather than tackling them head on, now is the time to ditch the cards and get serious.

The UK is slowly weaning itself off of its obsession with spending. For the last five years credit has been cheap and mortgages have been plentiful, so Brits were given a carte blanche to spend and keep spending. Now, unfortunately, the music has been turned off and the party is over.

You may have lived life on credit for years, but for a while that worked. You could buy clothes, go shopping, buy cars, go on holiday and go for nights out all on credit. It would stack up and up and up and then, a few years down the line you simply walked into your mortgage broker's office and found that your house had increased in value and you were eligible for a sub prime mortgage. You took the mortgage, it consolidated your debt and you were free to continue.

If needs be, you could have also taken out a second mortgage inbetween times. Times were good, spending was easy. But now the tables have turned; there are no sub prime mortgages, there are no second mortgages and house prices are not increasing.

So if you are still living in 2005, its time to ditch the cards. Whatever unsecured debts you have right now, you are stuck with them; a broker cannot come and save you now – now is the time to get sensible with your credit.

By all means, visit your broker, but do not expect miracles. A broker will now offer you chances to pay off your debts, through saving or through sensible consolidation. they may be able to offer you a remortgage or they might even be able to offer you a new deal – but it won't be able to clear your debts and give you another instant chance to spend again. Now is the time to save, to look to the long-term and to face the fact that the credit party is well and truly over.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

Credit card companies are hitting Brits hard by adding hidden charges and increasing rates despite us being in an all-time low rate environment.

According to a study by Which?, lenders such as NatWest, Mint and the Royal Bank of Scotland have all raised interest rates by as much as 4% over the last year in the face of an industry average of just 0.5%.

Which? also says some of the major providers are resorting to tactics such as cutting down on interest-free days and increasing withdrawal and balance transfer fees.

Which? money editor Martyn Hocking, says: "At a time when we're all feeling the pinch, it's hugely disappointing that credit card companies are choosing to put the squeeze on borrowers more than ever.

"They need to make credit cheaper and their charges more transparent and fair, rather than making it harder than ever for people to make ends meet and pay back their debts."

Liberal Democrat Treasury spokesperson, Lord Oakeshott says: "The new bosses at RBS are fast learners in the Fred Goodwin school of greed: these taxpayer-owned banks must stop spanking their credit card customers. Paying these extortionate interest rates in the high teens destroys your financial health just like 50 cigarettes a day or 50 drinks a week."

These findings by Which? just highlight how unfair and expensive unsecured credit card debt is. If you think you are paying over the odds for your unsecured debt, maybe now is time to consolidate the debt and get rid of it for good.

SOURCE: Lib Dems, 22/04/09

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.

It's another holiday and another time where you could spend more than you can afford – we all do it – but if you are doing it on your credit card it might be time to reassess.

Over the last few years you probably couldn't open your door due to the sheer number of requests for credit cards – 0% APR, free for a year, free balance transfers, limits of thousands of pounds – it was literally free money landing on your doorstep.

And you could always afford the cards, because you knew when the time came you could either transfer your balance onto another card, or simply use this time as an opportunity to refinance your home and consolidate your debts.

But the party is over, and the hangover is setting in. People who used to live on credit are finding that their overdrafts and credit limits are being severely reduced, and people who just looked to a remortgage as a means of consolidation are finding that they are being turned down for home finance.

So if you haven't yet stopped living on your credit card, it might be time to rethink. Every time you use your plastic, your credit score is deteriorating and you are taking one step back from financial security. There is little chance of getting instant finance or extensions of credit limits. Now is the time to take sensible action.

This has to start with good financial advice. Go and see an adviser and lay it all out on the table: your spending habits, your debts and your financial problems. This might seem daunting but it is the only way you can stop living on credit and begin saving, planning and repaying.

To keep up with the latest news and comments on current financial affairs please visit the Secured Loan Blog.