An ePetition was recently launched by Martin Lewis Money Saving Experts Website to bring financial education into schools. The petition caused a lot of debate amongst lots of people, as some believe that debt occurs because of lack of knowledge, while others believe it is due to unforeseen events such as illness, redundancy or an addition to the family.

Whatever your reason for debt, it is always important for you to have an understanding about the charges that are applied to your credit cards and loans.

If you have taken out a loan you will know that you signed an agreement prior to it outlining the amount you are borrowing, the interest percentage that will be charged and the total amount that you will pay back as well as detailing your repayment amount and period. This agreement is known as a Consumer Credit Agreement and is required under the Consumer Credit Act. Once you have signed this agreement, you are acknowledging and accepting the terms including interest and charges that may be applied if you fail to comply with the agreement.

If you have taken out a credit card you will once again know that you must sign and agree to a Consumer Credit Agreement, the same as with a loan. With a credit card, the card provider can increase or reduce the interest rate over the time that you have your account. The new interest rate will apply to all of the money you owe on your card, except for any amounts you may have at special promotional rates.

If your card provider decides to increase your interest rate, it must give you at least 30 days notice. When card providers tell you about an increase in your interest rate, they will explain in clear language how it is changing, what it will cost and the options available to you.

You can decide not to accept the new interest rate. If you do this within 60 days, your card provider will close the account and you will need to pay back the money you owe at the current interest rate. If your card provider also offers other lending products, such as personal loans, it may let you transfer the balance on your credit card or store card to one of these, at your current interest rate (or a lower rate).

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