Banks crack down on credit cards for Christmas

The amount of time allowed for one to pay off a credit card is to be cut substantially by some banks over the holiday season.

Both NatWest and the Royal Bank of Scotland have given their customers just ten days after January 2nd to pay off their balances before late payment and interest charges are levied.

The change in rules has caused an outcry from consumer groups who claim that it is a deliberate move to charge customers at the time of year when they use their credit cards the most.

A spokesman for the consumer group Which? said: “Many people will use their credit cards over the festive period and wait until they get paid in January before paying off this balance.

“But this shorter interest-free period may not give cardholders the same flexibility and many will incur charges.”

All the banks that have slashed the time given to pay off credit cards are owned by the Royal Bank of Scotland.

Tags: Many people, credit, group, Royal Bank of Scotland, festive period, time, bank of scotland, which

Insurers count costs of floods

The floods in the West Country last month, along with the Central England floods in June, have cumulatively been termed the worst in 60 years in the UK.

Now, as the waters have receded, Britain’s insurers have been counting the costs.

Aviva, owner of Norwich Union and the biggest insurance company in the country, announced last week that it faced £340 million-worth of claims, split evenly between the two deluges.

Royal Bank of Scotland, the UK’s second-largest home insurer said that the floods would cost them around £250 million.

Insurance premiums for extreme weather conditions are likely to go up nationwide, with those in areas which have previously flooded likely to be most severely affected.

Last month, the Association of British Insurers (ABI) was forced to revise its estimates upwards for the recent floods to a grand total of £2.5 billion.

According to Risk Management Solutions, the damage caused by the floods was much smaller than that wreaked by those in 1947, which would cost “between £4.5 billion and £6 billion” if repeated today.

Tags: June, insurers, Central England, damage, economics

Mortgages rise above base rate

The Co-operative Bank, Alliance & Leicester and RBS Natwest high street banks have all increased their mortgages rates by more than the 0.25 per cent rise in the base rate introduced by the Bank of England in January.

While the Co-operative standard variable rate (SVR) has risen by 0.35 per cent, reaching 7.24 per cent, Alliance & Leicester raised its SVR by 0.3 per cent to hit 7.39 per cent and RBS Natwest added 0.3 per cent, taking its SVR to 7.44 per cent.

SVR is the standard rate a customer’s mortgage reverts to after the time-limit on a fixed-term mortgage deal such as a tracker expires.

Mortgage SVR rates rose by an average of 0.51 per cent over 2006, Moneyfacts.co.uk recently revealed – and adjustments to SVRs following interest rate hikes can accelerate their growth.

Over the last six months, when the Bank of England has raised the base rate three times, 13 mortgage lenders, including the Bank of Scotland, Britannia and the Co-operative Bank, have put up their SVR by more than the 0.75 per cent total increase in the base rate, Savills Private Finance has shown.

Tags: svr, Mortgage loan, mortgages rates, bank of scotland, mortgage lenders