RAC reports that average gasoline and diesel prices have reached new highs due to the crisis in Ukraine. Petrol prices have risen to £1.49 a litre, beating the previous record high of £1.48 set in November 2021. And the outlook is even bleaker, with petrol prices set to climb to as high as 1 £.60.

Escalating gasoline prices added to the overall pressure on the cost of living. Inflation recently hit its highest level in 30 years, driving up food and energy prices. And borrowers face an increase in the cost of their debt with higher interest rates.

So what will be the impact of the escalating situation in Ukraine on prices at the pump? And if you’re struggling with your finances, what steps can you take to manage credit card debt?

What is the likely impact on gasoline prices?

The UK imports six times more oil and gas from Norway and the US than from Russia, according to Statista. But the UK is still dependent on global wholesale prices.

Russia is the world’s second largest oil exporter and natural gas producer. The UK, US and EU have threatened to impose tough sanctions if Russia invades Ukraine. This supply disruption could cause the cost of crude oil to skyrocket according to JP Morgan.

The FT reported that Brent crude oil rose to $100 a barrel earlier this week, its highest price in eight years. A further rise to $120 a barrel could push petrol prices above £1.60 a litre. This would increase the cost of filling a 55 liter family car from £82 to £88.

How can you reduce your fuel expenses?

Here are some suggestions to reduce your fuel consumption:

• Watch your speed: you use 18% more fuel at 120 km/h than at 100 km/h according to the Energy Saving Trust.
• Remove roof bars and storage boxes: Consumer Reports tests show that removing these items when not in use improves fuel economy by 19%.
• Check your tire pressure: under-inflated tires can increase fuel consumption by 5% according to Cars Direct

How can you save money on credit card debt?

According to The Money Charity, the average credit card debt in the UK is over £2,100 per household. This figure is likely to increase given the rising cost of living and interest rates. The Bank of England recently raised its key rate to 0.5% and is expected to raise it to 1.25% by the end of 2022 according to Capital Economics.

This is bad news for borrowers, especially those with high interest credit cards. If you are unable to repay your balance in full each month, interest is added to the balance. Trying to reduce credit card balances can therefore become a vicious cycle.

Here are three steps you can take to help pay off your credit card debt.

1. Look at a credit card with balance transfer

A 0% balance transfer card can allow you to transfer an outstanding credit card balance without paying interest for a set period of time. This can give you the breathing room to start reducing the overall amount you owe. If you’re considering this option, we’ve compiled a helpful comparison of our top-rated balance transfer credit cards.

2. Consider a 0% spend credit card

These cards offer an interest-free period for new purchases. This could free up money to pay off higher interest credit cards without incurring more interest charges. We’ve provided details on this on our shortlist of top-rated 0% APR credit cards for new purchases.

3. Pay off high-interest credit card balances first

If you have multiple credit cards, it’s best to pay off the balances on the higher-interest cards first. This will reduce the overall interest charged to you. However, it is important that you continue to make the minimum payments on the other cards. Missing payments can also affect your credit score.

Our credit card repayment calculator can help you calculate how long it will take to pay off your balance based on your interest rate, repayments, and outstanding balance.

Carry

Households are already facing significant increases in the cost of living. Rising gasoline prices will only make the situation worse.

If you’re struggling with credit card debt, you might want to think about ways to reduce the interest you pay. Our credit card eligibility checker does some of the hard work for you by listing the credit cards you might be eligible for.

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