Consumers need to be aware that there is no such thing as free credit, a credit union trade association has warned.

According to Abcul, there needs to be an emphasis on educating people in good saving and borrowing habits.

"For many people, credit cards do not help their overall situation," a spokeswoman says.

"Everyone should be aware that there is no such thing as free credit and that if they borrow on a credit card, they should do so only at a level they can afford," she added.

According to the Family Resources Survey in 2005-06, on average, 97 per cent of households had at least one type of saving account.

The most commonly held account was a current account, with 90 percent of households having one

Borrowers may be watching the results of this week's meeting of the Bank of England's monetary policy committee closely, as any change in the base rate could affect their financial circumstances.


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