Interest rate rises across board leave many savers very happy as they rake in some historic returns. As news of hikes filtered through the media, there were concerns that the average debt-burden will even worsen. Neverthesless, savers are in for some very attractive rates. For instance, the National Savings & Investment index-linked certificates which offer tax-free inflation beating returns, is now offering the highest ever rates on one year fixed-rate bonds - more than 6%. This is the first time this is happening in 5 years.



Although, inflation increase is not seen in a positive light, higher rate taxpayers can now enjoy the equivalent of 9.25% per annum which is 4% more than normal savings accounts. For base rate taxpayers, this figure is around the 7% mark. Returns from fixed-rate bonds is also increasing. Birmingham Midshires, has now launched a one-year fixed rate bond which will pay 6.05% gross. This is better than some of the best margins offered on normal products which stands at around 5.5% oon average and 5.9% at best. With further interest rate hikes expected this year, savers are bound to be laughing all the way to the bank, as there is likely to be more products or deals with 6% or more as rate of return. With these tax-free, index-linked accounts enabling savers to save a certain fixed sum every year, tax-free they are a good option for any serious would-be saver.

While rate hikes may be have a brighter side, it is more of bad news than good news for the average credit consumer. Already, some retail shops have suffered over the Holiday period as the consumer reigned in due to higher bills and expenses overall. Bankruptcies have also increased as inflation rates combined with a myriad of factors have forced small businesses out of the market. Business insolvency is dwarfed by the number of personal bankruptcies. Going bankrupt can cause untold amount of stress both for businesses and individuals. Even when the ordeal seems to be all over, one realises that a record of it is available on your credit report for seven years or more. This means that during this period, most major lenders will decline giving you any credit including home loans and auto laons leaving you to the vagaries of loan sharks.

Good credit repair advice can go a long way to improving your credit score, should you happen to be in this situation to enable you to borrow at lower rates in the future. In short, meaningful credit repair can take a while. There are immediate things that can be done to improve credit rating, such as avoiding late payment, honoring all your bills on time and many more. In the long run, you have to build trust so that future lenders can risk their money on you. Although, some people may recommend not borrowing at all this time, that advice may be a bad idea as it can result in no credit history for that period. The best is to borrow small manageable amounts and make payment on time when the moeny is due. This way, there will have a record of your new and improved credit behaviour leading to easy and cheap loans in the future.

All in all, rate rises affect people in two different ways. If you are a saver, you win. If you are in debt, it's bad news.