Should I be Scared of High Interest Rates?

High interest rates can feel worrying but they need not be. It all depends on your financial situation. If you do not have any loans, then high interest rates are more likely to benefit you as you will get a better return on your savings. However, if you do have loans then you may worry about the rates. It will depend on the type of loan that you have though. If you loan has a fixed rate of interest then this will not change. If it has a variable rate then it could go up and if you are applying for new loans then these could be dearer. There are ways that you can get a better deal though.

Only use loans when necessary

It is wise to only take out payday loans online if it is completely necessary. Think hard about what you are using the loan for and decide whether you really need it. It might be that you will be able to manage without the loan. A loan should either be for an emergency purchase or to pay for something that will better your situation and you would not be able to afford otherwise. Think about whether your loan will be used for this. Also note that loans include outstanding credit card balances, overdrafts and store cards as well as more conventional borrowing.

Use savings if you can

If you have savings then it better to use these instead of using a loan. This will enable you to buy the items at a lower price. Loans can cost a lot of money and although you will lose interest on that money that you had saved, you will be likely to still be better off than had you borrowed the money. You can compare the interest rates to check and you will be likely to find that the loan interest will be higher than the savings interest. The loan may also have additional fees which are not included in the interest.

Compare loans

It is worth comparing different loans to make sure you have the one that will offer you the best value for money. They will differ and so you want to look and see which will be best. You can compare the interest rates, but also look at the fees so that you know what the total cost is. It is also wise to look at the repayment schedule to see if it something that you will be able to afford. Consider how long you will be repaying for as this will have a big impact too as you will need to find those repayments for all of that time. You may also want to look at the lender and what they are like, look at their website, find out more about them and see if you can find any reviews of them so you know what to expect from them.

Switch providers

You may decide that you would like to switch providers so that you can get a better deal. This can be possible, but you will need to check. You may be tied in with a lender or you may have to pay a fee if you want to move your loan. These costs could add up to more than you will save by switching so it is important to be aware of how much they are. If you do not have long left to repay the loan then you may not feel that the hassle of switching is worth it, but if you have a lot left to repay then it could save you a significant amount of money.

Pay loans off early

If you can, then repaying loans early can save you money. Even if the interest rates go up, you could still end up saving more money because you have repaid the loan early. Some loans are expensive to repay though so you need to check whether there are any penalties for repaying early. These could be so high that it will be cheaper to not repay it early. It is therefore wise to find out before you consider repaying it early. If you are not sure then you should be able to contact the customer service department and they will be able to tell you.


So, in conclusion, although high interest rates are not ideal for those that are borrowing money there are ways to make sure that you are not paying more than necessary. Making sure that your loan is cheap and trying to repay it early could help to keep the costs down. You may also find that you can manage without a loan and that will protect you even more from rate increases. So, do not be scared of rising interest rates but have a plan in place so that you can protect yourself from them.

What to do if you Cannot Repay your Store Card

A store card is quite an expensive way to borrow money, which means that it is sensible to repay it in full when you get your monthly statement. There are a lot of people though, who will only pay off the minimum balance but they will then be charged interest on the remaining balance and this could add up to get very expensive if you leave it unpaid for a long period of time. This is why it is really important to repay the full balance, but what if you struggle to repay?

Pay off in instalments

If you cannot afford to pay off the whole balance then it is wise to pay off as much as you can. This will mean that you will be charged less interest and so the loan will be cheaper. Paying off as much as you can afford will allow it to be repaid more quickly than if you just repay the minimum. If you wait until you have the full amount required to repay it then you will end up paying more interest so it is better to pay as you can. You could decide on specific amounts to pay each month or you could just pay in ad hoc amounts when you have spare money.

Do not use the card until repaid

It is wise to stop using the store card until you have repaid the outstanding balance. If you keep using it and borrowing more money then it will be more difficult to repay it. Hopefully it will not take you that long to repay it and then you can decide whether you want to use it again. Once you have cleared the card, if you are using it again then consider setting up a direct debit to pay the full balance each month so that you cannot get back to the point that you are now.

Try to cut spending elsewhere

It can be helpful if you cut down what you are spending elsewhere so that you can afford to repay more on the card. This may not be easy but it will just be for a short amount of time until you clear the debt. Try to prioritise your spending so that you just buy essentials and do not but luxury products. So, make sure that you pay for everything that you have to buy do not buy those little extras. It can be useful to keep comparing prices to make sure that you are not paying more than necessary for the items that you are buying.

Try to earn some extra money

It can be useful to see if you can earn some extra money and put it towards repaying the card. This could be easier for some people than others. It may be that you will be able to take on more hours in your job or do some overtime and get paid for that. You may have some items that you can sell in order to make some extra money. It may be that you can take on a second job, do some freelance work or find a way to earn some extra money online. There are lots of opportunities out there, you just need to find the right one to suit you and your lifestyle.


Hopefully, if you try some or all of these things you will be able to pay off your card. It can be quite daunting, but once you start whittling down the debt you will be able to see that you are making progress and it will hopefully encourage you to keep going. It is worth keeping in mind why you are working so g=hard and the reward that you will have at the end of no store card interest to pay. It can even be worth writing this down to remind yourself each day so that you stay focussed. It can feel like you are punishing yourself because you are not able to spend money on things you might like, but realising that it is for yourself that you are doing it, should help. You might even start to think of new ways that you can pay the card off more quickly so that you can move towards your goal faster. It will be hard, particularly if you have a large amount to repay, but it will just be for a small amount of time and then you will be able to go back to how you were. But do be careful to then keep a track of your card spending and make sure that you feel confident that you will be able to afford to repay it in full each month. Try not to spend too much on it and always be aware of how much you have spent so that you know if you should stop spending until the next bill arrives so that you can afford it.