Contractors should make sure they are aware of interest rates before taking out credit, one expert has said.

Richard Sorsky, money advice co-ordinator at the UK Insolvency Helpline, has said that too many people are still taking out credit without really understanding the ramifications of the interest rate.

He said that people go into borrowing with good intentions, believing they will pay back enough to avoid any serious interest.

"They think, 'I'll pay the other debt off', but something comes up like a holiday or a computer in need and before you know it, life gives you unexpected expenses," he explained.

This comes after one expert predicted that the wages of contractors and other professionals could rise as the "war for talent" heats up.

Dave Fleming, sales director at Badenoch & Clark, said that salaries are likely to see a hike in 2011 as companies compete to secure the best talent.