Most people understand the recent recession was a consequence of two primary factors. The first factor was risk-taking by banks that invested heavily in the sub-prime mortgage market. The second factor was easy credit. Consumers who really should not have been able to qualify for mortgages were able to take out loans because credit was fast and easy.

When the housing market fell and prices declined, those cheap loans suddenly looked expensive leaving a wake of 'underwater' homes. But it was not just home loans that were easy to obtain. Credit cards were being issued in the millions as a result of aggressive lender marketing campaigns.

Like all parties, eventually this party ended. But it was not a slow goodbye - more like a resounding crash - that marked the end of easy credit. For two years, credit has been difficult to get as the mortgage companies tightened up their requirements and banks cut off credit cards. As if that has not been painful enough, now interest rates are expected to climb as the economy continues to improve.

Consumers have been warned to expect rising interest rates which will add to the financial problems of already stressed borrowers. Rising interest rates have been predicted for a long time as a natural consequence of government borrowing to cover the staggering national debt. Though most people are not economists, the interest rates will be raised to also slow the possibility of inflation.

The current 30-year mortgage rate is at 5.31 percent which is low by anyone's standards. It looks particularly low compared to pre-recession rates running as high at 10 percent or more for the riskier loans. Economists are worried that higher interest rates could choke off a struggling housing market.

In real numbers, a 1 percent increase in an interest rate can lead to as much as a 19 percent increase in the home cost. When looked at it in this way it's easy to understand why economists have new worries about the housing market.

Credit card interest rates are also expected to rise. In fact, they are at the highest average rate seen since 2001 at 14.26 percent. These numbers are per the Federal Reserve. Households have been using their credit cards for both standard and emergency purchases and higher interest rates means it will take longer to pay off the balances.

Projections indicate that the credit card interest rates could rise as high as 17 percent before the end of the year.

Household debt has risen by an astonishing 9 times since 1981. Though the amount of debt held by consumers has dropped during the recession years, debt is still 5 times more than disposable income.

The low interest rates have helped consumers get access to loans to buy more while paying less, they also encouraged excessive borrowing. Now it is time to pay the piper as the economic recovery gains speed. The government has begun the process of unwinding its involvement in the purchase of mortgage debt and higher interest rates are sure to follow.

Consumers need to be aware that interest rates are going higher by the end of the year and try to prepare accordingly.

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