Over the past 6 months the credit crunch has been a huge focus in the news, everywhere you turn you hear credit crunch but what is it all about?

Those in the financial world understand this phrase, but to the average person on the street what is the fascination, is it really as bad as people claim and most importantly how does it affect me.

The credit crunch is the name given to the effect the financial industry is currently experiencing. It is due to the lack of money available across the financial market.

Due to the lack of funds banks have available to them they are not able to lend or borrow from each other.

As the credit crunch worsens banks feel the pinch and in order to rectify the situation they have little choice but to charge customers more. Banks do this by increasing fees, charges and increasing interest rates on mortgages, loans and other products.

This is where it affects you, the customer. Fees and charges have increased and interest rates have seen a steady rise since the end of last year. This has lead to repayments jumping through the roof.

As banks funds whittle down they have tightened their lending criteria, meaning if you want to apply for a loan your application will be thoroughly checked out. They will only lend to those that do not pose a risk.

Experts say at this time the market is very unsteady, only take out a loan or other financial commitments as a last resort.