Choose credit cards over store cards this Christmas

If you are planning to spread the cost of Christmas and the New Year there are a number of options available to you. For many people, particularly those lured into shops when the January sales come around, the temptation to take out a store card is irresistible, with retail employees throwing what sounds like offers in to encourage the consumers to apply for the store card. However, consumers should think carefully about whether a store card is worth it before making a commitment and spending money on such cards.

A store card can only be used in one shop or a certain chain of stores, and is therefore of no use to you if you want to pay for other items in other shops and stores. Store cards also typically have very high interest rates, so even though you might be offered a small discount on your purchases for using the store card you will more than make up for this in terms of the interest that you will pay for the privilege of using the card. With stores cards you don’t get special offers such as interest free periods, so you will be stuck with paying interest on any balance that you have on the card.

A more sensible solution for those planning to splurge out in the January sales is to get hold of a good credit card in plenty of time – one that offers an interest free period on purchases giving you time to repay the balance without having to pay interest. Even if you end up with a credit card that does not offer an interest free period, or where the interest free period expires before the balance has been repaid, you will still pay a lower interest rate than most store cards charge, and you have the added advantage of being able to use the card in other stores.

There are some advantages to taking out a store card, such as discounts on certain lines and products, but in order to really benefit from this type of deal you need to be the type of consumer that pays off the full balance on the store card each month, thus avoiding the extortionate interest charges that will otherwise be incurred. 

Tags: interest, sales, store, charge, cost, cards

Put credit card fraud into perspective

As Christmas approaches many consumers in the UK have started to worry about the risk of Internet fraud, and although buying gifts and other related items online has become hugely popular over the years many are still worried about the possibility of becoming the victims of credit card fraud. This worry is further reinforced through the various warnings that always come out at around this time of year, warning consumers to beware of credit card fraudsters.

However, some new advice has now been issued by a company that works to protect both retailers and consumers from this type of crime. The 3rd Man has advised consumers not to listen to ‘scaremongers’, and has urged retailers to put this type of criminal activity into perspective. The 3rd Man wants more emphasis put on the fact that by and large Internet shopping is safe, and this is because most reputable retailers use secure software to ensure that the consumer’s financial and personal data is not compromised.

Each year billions of pounds is spent on Internet shopping by consumers in the UK, but the many stories about the risk of online shopping and credit card fraud could result in a drop in consumer confidence. The 3rd Man does advise consumers to ensure that the site that they are using is a secure one, and providing that this is the case there should be no need to worry.

The CEO of the company stated: “Every day there is a story about fraudsters cheating their way into our pockets. The introduction of Chip and PIN has made a massive impact on fraud, reducing crime in stores. It has also persuaded many fraudsters to target ‘card not present’ environments such as Internet shopping, but equally many retailers have recognised this and put in place proper systems to combat the criminals. If people wish to shop on the Internet they should be confident that it is fundamentally safe. It is the safest way to shop!”

More Info:

• Identity Theft

Tags: account, steal, bank, cash, pin, charge, credit, card

Even more convenience for A&L customers

Following in the footsteps of HSBC and First Direct, the Alliance & Leicester has revealed plans to introduce a new method of banking that will offer consumers even more in the way of convenience and flexibility – mobile banking. Consumers in the UK that have accounts with major banks and building societies can already enjoy the convenience and ease of Internet banking in addition to using the facilities and amenities available at the local branch. It seems that mobile banking could be the next big step for many banking companies.

Through the use of the mobile banking service on offer from the Alliance and Leicester, consumers will be able to quickly and easily check on recent transactions that have been made, will be able to check their balances, and will even be able to top up their mobile phone credit directly from their bank accounts. In the future, according to officials from the Alliance & Leicester, consumers will also be able to make money transfers and pay bills from the account.

For those that want to take advantage of this mobile banking service, registration will be made easy and simple, and can be done via the Internet or via the mobile phone. One spokesperson from the bank stated: ‘There has not been much technical integration and all we need to do is verify the customer and their bank account details, so it has been straightforward.’

One research analyst says that over time consumers will become used to this updated method of banking, as it means that they will have one more valuable facility to help with the smooth-running of their finances and accounts. However, he added: ‘It is taking consumers a while to use their mobile phones for more than voice calls, and it is difficult for a bank to teach people to use them in another way.’

Tags: cost, transfers, charge, payments, interest, online, bank, account

Home credit lenders must make it easier to compare deals

Home credit lenders have recently been targeted by the Competition Commission in the UK, and the industry has been told that it needs to make things easier for consumers in the UK when it comes to comparing deals and repayments on finance offered by home credit companies. The commission also added that the industry needed to ensure that consumers that repaid the loan earlier than arranged received some form of rebate. However, the commission has decided not to enforce a price cap, as officials state that this could hit some consumers hard.

Research showed that the average sum borrowed by UK consumers in the form of home credit was £300, with loans starting from around £100. The home credit industry has nearly two and a half million customers in the UK, and the majority of these borrow under five hundred pounds in the form of home credit. The Competition Commission, however, has decided not to place any price cap as more vulnerable consumers that may need more could otherwise find themselves in difficulties.

After it came to light that a small number of home credit companies were controlling the market when it came to this type of finance, the commission was said to be ‘opening the market’ when it came to home credit. The commission is in the stages of doing this, and has stated that lenders in this industry will need to publish their data on a website, so that consumers can then easily compare terms and costs in order to get the best deals.

With regards to its decision not to enforce price caps, the chairman of the commission said that he thought that capping might have “…reduced the availability of home credit to the most vulnerable customers, specifically those with no access to alternative sources of credit. We also felt that price caps could prove to be extremely difficult to apply and enforce in this industry.”

Tags: loan, offers, lenders, credit, deals

No Evidence That Interest Only Mortgages Are Taken Out Under Pressure

Amidst concerns that many people may be taking out interest only mortgages rather than capital and interest mortgages simply because of the rising cost of house buying and the problems with affordability, a recent report has been published and has indicated that this is not actually the case, and it is not pressures relating to the affordability of housing in the UK that is resulting in some borrowers opting for the interest only mortgage.
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Tags: Mortgages, bank of england, base rate, interest only mortgages, interest rates

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