How the credit crunch affects us

We know from the news and media that some banks are in trouble and some mortgage houses have had to be bailed out, but I hear many people asking how the credit crunch will affect other aspects of the financial infrastructure in ways that might have an impact on the wider populace.

The initial impact that I have experienced first-hand has been in the mortgage market. For first time buyers, a new mortgage not only entails more stringent rules (a good thing..) but the cost of the 'product' itself has become more expensive even if you are just renewing (blatant profiteering..). Since the base rate went down, you will also notice that many tracker mortgages have been withdrawn because the lenders have less scope to make a profit.

Now, you might wonder how credit card balance transfers are shaping up in the credit crunch, and you might be forgiven for thinking that the 0% credit card for balance transfers is doomed. It transpires however, that this is not the case, and what is actually happening is that charges are sneaking in 'under the wire'. In the small-print, you will now notice that handling fees are increasing and transfer fees are now less likely to be capped. The good news is that good deals are still available, my advice is that you really need to compare credit cards small-print to make sure you are getting the best deal.