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2004 was a great year for canny borrowers, but a terrible year for most of us! Credit cards Once again, it was yet another great year for "rate tarts" – borrowers who use 0% credit cards to save themselves a fortune in interest. It was also a great year for "stoozers" – card sharps who borrow money on 0% credit cards and stick it in high-interest savings accounts to earn "free" interest. In 2004, the number of 0% balance-transfer deals peaked, with about eighty lenders offering introductory no-interest deals for anything from five to twelve months. There was even one short-lived campaign that offered balance transfers at 0% for eighteen months! However, in November, accountancy firm PricewaterhouseCoopers (PwC) noted that these 0% deals were unprofitable and warned that banks would begin to pull out of this market. I disagreed strongly! One thing that started to creep in during 2004 was the use of balance-transfer fees to recoup some of the cost of offering interest-free deals, with Barclaycard being a notable example. It's possible that these upfront fees could become more widespread during 2005, as lenders seek to repel the rate tarts. Find great 0% deals in our Credit Card centre. Mortgages The Bank of England raised its base rate five times from November 2003, hiking it from 3.50% to 4.75%. Of course, mortgage lenders responded by raising their standard variable rates (SVRs) shortly after each hike. As most homeowners have a mortgage that is linked to their lender's SVR, millions of borrowers with tracker, discounted or variable-rate deals saw their payments rise by at least 1.25%. This added £1,250 to the cost of a £100,000 interest-only mortgage. As for fixed-rate mortgages, it was a year of two halves. Fixed rates rose sharply from autumn 2003 to summer 2004, as rate hikes increased the cost of long-term money. However, in the latter months of this year, fixed rates have come down, as the markets predicted that the base rate wouldn't rise much further. Another big change to the mortgage market came with the arrival of tougher regulation from Halloween onwards. I'm neither an economist nor a crystal-ball gazer, so I won't make any predictions for interest rates for the years ahead. What I will say is that wise homeowners will take steps to reduce their expenses and strengthen their finances, just in case rates do take off once more. Alternatively, finding a better mortgage deal could reduce your interest bill by thousands of pounds a year – so don't pay more than you have to! Find a high-quality home loan in our Mortgage centre. Personal loans Oddly, although the base rate rose during 2004, rates for personal loan crashed to a record low. For most of the year, it was possible to borrow £5,000 over three years with a Best Buy lender and pay a "typical" interest rate of under 6% APR. However, in recent weeks, several big players have upped their rates, notably king of the Best Buy table Northern Rock. What's more, new legislation has forced lenders that quote typical APRs to give this rate to at least two-thirds (66%) of new borrowers, which has ironed out some sneaky tricks! Several times this year, I questioned whether lenders could make money out of personal loans with margins of less than 1% over the base rate. With only two lenders now offering a rate under 6% APR, this has proved to be the case. It remains to be seen whether lenders will cut their rates to grab a bigger slice of the traditional New Year rush for personal loans, but I think it's worth hanging on to see... One trick that lenders may employ to increase the profitability of personal loans in 2005 is to increase the cost of payment protection insurance (PPI). Thanks to high-pressure selling, seven out of ten loans are sold with PPI, which is hugely overpriced. Few borrowers realise that the cost of PPI doesn't affect the APR, so increasing the price of this rip-off cover by a few hundred pounds won't change the APR whatsoever. That's why it's important to check the Total Amount Repayable (TAR), which shows the total sum that you'll repay, including the amount you borrowed and the total charge for credit. Check out the deals in our Personal Loan centre. Our total borrowing 2004 was another year where UK borrowers went over the top. Although the final figures won't be known until the end of January, I predict that we increased our total borrowing by over £115 billion during 2004. That's the highest one-year increase in personal debt ever recorded, and more than we borrowed in 1994, 1995, 1996 and 1997 combined. Yikes! Learn how to turn the corner in our Get Out of Debt centre. More: Find better Credit Cards, Mortgages and Personal Loans.