Benefiting from credit cards as a student

As a student in the UK it can be very difficult to maintain a healthy cash flow, and often students need a little flexibility and assistance when it comes to finances, whether it is for books, entertainment, or just general purchases such as travel costs or groceries. This is particularly true for students that are living away from home, who often aren’t able to get financial support as readily as those living at home with parents and who also have the added cost of bills and rent to deal with.

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Tags: balance, finance, financial need, added cost, uk, student credit cards, financial products, debt

Holidaymakers incur charges by using plastic abroad

Holidaymakers are being warned that using debit and credit cards abroad could prove costly due to the charges implemented by providers.

Moneyfacts claims that the majority of travellers opt to use their plastic overseas as travellers cheques are seen as old fashioned, but added that these individuals need to be aware of hidden charges.

The site claims that some credit card providers charge up to three per cent for both purchases and cash transactions when using the card in a foreign country.

“This charge is applied each time the card is used and can soon mount up to a significant amount,” states a spokesperson for the site.

Methods for minimising the effects of these costs include taking out cash in larger lump sums to avoid a number of payments.

“Customers could find their balance much lower than expected when they get home if they are not careful”, concluded the spokesperson.

Meanwhile, in related news, the Association of Independent Tour Operators recently stated that do-it-yourself holidays are often a false economy as booking in this manner can mean that people are not covered by insurance.

Tags: travellers cheques, Business Finance, independent tour operators, card, balance, lump sums, larger lump sums, Insurance

Over £1bn to be transferred between credit cards every month

Up to £1.1 billion is expected to be transferred between credit cards every month, according to new research.

Findings from a study by Sainsbury’s Bank showed that an estimated 716,000 consumers are responsible for the transfer of the sum.

The average transfer balance is £1,500 but one in ten consumers intend to transfer plans worth £4,000.

Donald MacLeod, head of cards with Sainsbury’s, said research indicates that 40 per cent of card holders think it will take longer than a month to clear their current balance.

“Although there are a number of credit cards offering introductory 0% on balance transfers, there is a considerable difference in their duration so people need to choose carefully. Also, when choosing a card for a balance transfer, it is also worth considering what else it offers,” he added.

Meanwhile, research from Fool.co.uk showed that UK spenders are more likely to use their cards than cash when paying for everyday purchases.

Tags: Donald MacLeod, Sainsbury, sainsburys, Business Finance, fool, balance

How well do you monitor your savings account?

A recent report has suggested that many Brits with savings fail to monitor their savings accounts to the degree where many would not even notice right away if there was £1000 was missing from the account.

The report suggests that around 10% of those with savings would not immediately realize if £1000 went missing from their accounts. The survey was carried out by the mobile banking service Monilink, and comes at a time when many people may be at risk of fraudulent transactions following the loss of 25 million account details by HM Revenue and Customs.

It is thought that the reason why so many people are so lax about checking their bank accounts is a condition known as finance phobia, which is a condition where people are afraid to look at their accounts in case the balance is lower than expected. Officials from Monilink state that many people would simply prefer to ignore their accounts than risk looking at them and finding that their account balance was lower than they expected it to be. It is thought that around 20% of those that do not check their accounts blame finance phobia.

On a national basis there is over £43 billion pounds stored away in accounts that are not monitored by account holders. Around 50% of the British public do check their bank account balances on a weekly basis, but a further 25% only check their savings accounts once a month. Around 25% of those that were polled said that checking their accounts would materially affect their lives because they suffered sleepless nights as a result of their finances.

‘These findings suggest consumers need all the help they can get to keep tabs on their money. Poor money management and existence of “finance-phobia” in Britain is worrying considering the rising levels of debt problems Britons face.’

Tom Smith
1st December 2007

Tags: money, balance, savings, accounts, bank, lose

No interest will be charged on A&L overdrafts

Another bank has revealed its new charge structure with regards to overdrafts and bounced cheques. According to recent reports the Alliance and Leicester will now no longer be charging any interest at all on its overdrafts on current accounts.

The bank will also be reducing the charges applied for a bounced cheque, which will go down from £34 to £25. Officials from the Alliance and Leicester state that in place of interest charges on overdrafts new daily charges will come into force.

Banking will still be free for customers that keep their accounts in credit, state bank officials. The new charge structure is due to come into force around the third week of October. Some banks, such as Lloyds TSB, have already announced their plans to reduce overdraft charges and fees for bounced cheques, which many think is a direct response to the investigation into bank charges that has been carried out by the Office of Fair Trading.

However, officials from Alliance and Leicester claim that this is not the case, and that they had plans to change the fee structure prior to the investigation.

One official from the Alliance and Leicester stated: “The combination of fees and interest is unnecessarily complex when you are trying to present your business as simple.”

Under the new charge structure customers using an authorized overdraft will be charged 50p per day up to a maximum of £5 per month. If the overdraft is unauthorized then the customer will have to pay £5 per day until the account is brought back into order.

One industry professional stated: “Customers should ask themselves whether the new simplified fee structure does actually save them money in the long-term.  According to our analysis, the new way of charging will result in Alliance & Leicester customers being marginally better off.”

Tom Smith
24th October 2007

Tags: customer, unauthorized, charge, interest, pay, leicester, overdraft, authorized, alliance, balance

Sainsbury’s increases interest free period on credit cards

The supermarket giant Sainsbury’s has been offering a range of financial products and services over the years, including some very competitive deals on credit cards.

According to recent reports the retail giant has now announced that its credit cards – which already offered an attractive ten months interest free credit on purchases – will now be offering an increased interest free period of twelve months, which is likely to attract increased custom as well as placing the cards amongst the top of the best buy tables.

Officials from Moneyfacts have stated that the cards are all the more attractive because they also offer a low rate life of balance transfer facility, so in addition to enjoy twelve months of interest free credit on purchases customers can also transfer costly existing credit card balances and enjoy a low rate of interest for the life of the transferred balance – the rate currently stands at 5.94%. The standard variable rate on the credit cards is 15.9%.

One official from Moneyfacts stated: “The standard and platinum deals were already competitive, but extending its offer to 12 months pushes its standard card to hold joint top position of the moneyfacts’ best buys, along with Halifax and HSBC, with all three offering a standard revert to rate of 15.9% APR. The Platinum card offer is market leading, with the next best interest free offer at 11 months. These cards also come with the added benefit of a lifetime balance transfer deal at 5.94% pa, which in today’s market is a pretty competitive. Combined with the 0% offer, these deals are a very attractive overall package.” 

She added that the Sainsbury’s credit cards were now looked upon as a five star deal, as they offered savings on both transferred balanced and purchases, making them great value and convenient.

Tom Smith
5th September 2007

Tags: increased, introductory, platinum, purchases, credit, sainsburys, card, offer

Credit Card Deals In Different Categories

Looking for a credit card?
What deal are you looking for?
Here are the best three deals in certain categories, depending upon what you are looking for.

These are some of the best balance transfer credit card rates currently available.

Mint Credit card
This has a free interest balance transfer until 1 August 2008, and a 2.5% transfer fee. There is zero percent on purchases until 1 January 2008, and another six months at zero percent for balance transfers made in October 2008. The interest free period works out at 54 days. The APR on purchases is 14.9%. The transfer or handling fee is one of the lowest at 2.5% and over a year at zero percent on balance transfers. That’s a good period, and with zero percent on purchases till January you have a long period of free money – just be careful to tie things up before you go onto regular interest rates.

Capital One Platinum card
This has a 3% handling fee and zero percent interest on balance transfer until 1 July 2008. The APR on purchases works out to 15.9% and the interest free period is 54 days at maximum. The card also comes with three months worth of free credit on purchases. This has a shorter period than the Mint and a shorter period for both the balance at zero percent and for purchases.

Barclaycard Premium
The zero percent interest on balance transfers lasts until 1 July 2008 with a 2.9% fee. The interest free period works out at 56 days maximum. The APR on purchases is 14.9%. The card comes with various insurance protection deals and three months of free interest on purchases. This has a similar period to the Capital One Platinum but a slightly lower handling fee.
Of the three Mint looks the best.

What about the best life of balance rates? These are rates for borrowers who are fed up of continually transferring their balances.

M&S &More card
The life of balance interest rate is 4.9%, and there are no fees. The APR on purchases works out at 19.9% with a maximum interest free period of 59 days. The card also has zero interest on purchases until 31 January 2008 and &More reward points on purchases. The zero percent interest on purchase makes this attractive.

Citibank Platinum Mastercard
The life of balance interest rate is 4.9%, and there is a fee of 2.5%, which is capped at £75. The APR on purchases works out at 16.9%. The card also has 0.5% cash back on all purchases and comes with Identity Theft protection. The cap at £75 only kicks in if you have a balance greater than £3000, but the cash back could make this seem tempting. Apply now

Sainsbury’s Bank Platinum card
This has life of balance interest rate of 5.9% no transfer fee. The APR on purchases works out to 15.9. The card comes with ten months free credit on purchases. The free credit on purchase make this card look a good bet, as the ten months will take you further than the M&S option. M&S’s reward points might swing it for you.

Now onto those cards with the best APR rates on the market? This is for steady card owners who don’t want to switch, but want a good interest rate.

Barclaycard Simplicity
This has an APR of just 6.8%. There is no balance transfer available. The maximum interest free period is 56 days. The card comes with various insurance products, but these may of limited use to you. The low APR may be the key.

Egg Money
The APR is 7.9%, with no balance transfer available. The maximum interest free period is 50 days. The card has one percent cashback on all purchases. The APR is attractively low, and the cashback may make this a good bet for you.

Intelligent Finance Flat Rate
This has an APR of 8.9%, with no balance transfer available. The interest free period is up to 59 days, and the card comes with no extras. Compared to Barclaycard’s Simplicity and Egg’s card this has no frills and a higher APR, so the other look to give a better deal.

Finally here are the top three card for cashback deals. Here card holders earn cashback on their spending.

American Express Platinum card
The cashback offer is 3% for the first three months, followed by 1.5% on balances over £10,000. The APR on purchases works out at 14.9%. There is no balance transfer offer and the interest free period is 56 days. The card has online fraud and purchase protection benefits. If you’re after a cashback deal, then three percent is the best you can get, but you’ll need to have no need of a balance transfer. The other benefits are probably of limited value. Apply now

Egg Money
The card has one percent cashback on all purchases. Selected dealers have a higher cashback rate, e.g. electrical goods from Dixons.co.uk earn 5% cashback. The APR is 7.9%, with no balance transfer available. The maximum interest free period is 50 days. The card has one percent cashback on all purchases. If you think you’ll be buying a lot of electrical goods from Dixons, then this card will probably come out as better than the American Express option. But overall the Amex card has a wider appeal.

CitiBank Online Platinum card
The cashback offer is 0.5% up to £3,000 per month. The APR works out at 16.9%. There is a balance transfer offer of 4.9% for the life of the balance. The interest free period is 56 days, and there are no additional benefits. This is third best on cashback – by quite a way. Apply now

It is best for you to understand your requirements and look at your outstanding balance and future spending before you choose yourself a card. Getting a particular card for your specific requirements can work for a set period.

Tom Smith
13th June 2007

Tags: back, cash, offers, deals, current, transfers

Choosing the right card

Choosing a credit card can be a process full of heartache and confusion; there are so many to choose from. But do they really offer different benefits?

Whether you are venturing into the world of credit for the first time or are thinking of changing your card, we examine the process of choosing a card and reach some interesting conclusions.

Loads of money!

It was clear some decades ago that credit cards were here to stay. In the late seventies there were articles on TV and in newspapers that soon we wouldn’t use cash any more – no more paper and no more heavy coins jangling in the pockets.

It hasn’t quite gone that way, but certainly these days it’s a question of which card to choose not “do I want one?”

Everybody’s different

What type of credit card user are you?

There are some very set patterns that go to make up the million or so credit card users in the UK today. There are so many of us that all together we owe in the region of £180 billion. And that’s a lot of interest!

Pay it off

Do you clear your balance every month? If you are one of these tidy users then really the market is completely open to you as you won’t have to concern yourself with how much interest the credit card company charges. It would be worth casting an eye around the market though just to make sure you’re aware of what is on offer.

To pay it off, or not pay it off, that is the question

If you use your card for regular purchases each month and usually pay off those regular sums but occasionally run up larger bills, perhaps at holiday time or Christmas, then you do need to be aware of how much interest you are being charged.

You should also examine how long the interest free period is offered on the card. Most companies will give you between 56 and 59 days interest free credit, but a rare few don’t give any!

The hole in the wall

If you are going to use your credit card to obtain cash then you are going to get stung anyway you look at it. Going to the hole in the wall will incur interest on the cash as soon as it’s in your hand; there are no interest free periods with cash transactions.

Check to see what rate the company charges for cash; it’s bound to be higher than other rates on the card.

A debt is a debt is a debt

If you are somebody who has run up a debt, or is likely to run up a debt, on your credit card and lets it sit there, then you really do need to go for the cheapest option you can get your hands on.

There are two schools of thought for outstanding balances. Some people say chose a credit card that has a low interest rate for the life of the balance and stick with it. Some people say go for the zero rate promotions and switch when they come to an end. We say it’s up to you.

Buyer beware

If you are going to change between zero rated cards and become a bit of a ‘rate tart’ then you will need to keep an eye on how often you do so and whether there are any penalties charged when you transfer to the next zero rated account.

Switching from card to card for the zero rated incentives can affect your credit rating. Credit card companies have now got wise to the fact they are losing something like £1bn a year in potential revenue by people taking advantage of their offers. So watch out for those fees.

Something for nothing

Credit card companies have also now introduced what are known as honesty boxes on their promotions. These show all the interest rates they charge and should be displayed in a clear understandable form, so you can easily compare like for like.

As far as other incentives are concerned there are cards out there that offer reward points or discounts at selected retailers, cashback, zero percent on goods purchased or even, on special charity cards, a small donation to a named charity every time you make a purchase. There will be one for you.

Choose your weapon

The credit card industry spends billions of pounds every year on encouraging users to transfer balances or to take out more credit. The different types of card on offer are staggering and have been developed to compete in the High Street wars of open finance introduced in the eighties. Today, some of the larger organisations like Barclaycard or American Express will offer several different cards each with their own unique benefits. These demonstrate that we all may be unique, but we each share the same type of habits when it comes to dealing with our finances.

Choose carefully, for your credit card can be your friend if used wisely in the fight to survive the daily financial grind or it can very easily become your enemy.

Tags: compare, cards, best, choose, balance