Credit card fraud increases

The flexibility and ease that credit cards provide have made them hugely popular amongst consumers in the UK, and many people now have one or more credit cards, which they use for making purchases on the High Street, by phone, and online. However, whilst these cards do offer the ultimate in freedom and flexibility they can also pose a danger if users are not vigilant.

Credit card users are being warned that they need to be more vigilant when using their credit cards and with their credit card information. This is because figures have shown that the level of credit card fraud has increased, with 6.4 percent of plastic cardholder falling victim to fraud in the past twelve months compared to 4.7 percent in the previous year.

The figures were released as part of the British Crime Survey, and the rising level of card fraud has made many people concerned about falling victim to this type of activity. In a survey 53 percent of cardholders said that they were concerned about becoming a victim of plastic card fraud.

With fraudsters now using a range of sophisticated methods to conduct this type of criminal activity, cardholders are being urged to be extra vigilant when using their credit and debit cards. It is also advisable for cardholders to check their statements carefully and also check copies of their credit reports in order to look out or any suspicious transactions.

One credit card holder stated: “I used to do a lot of shopping online with my credit card, and I’ve never been a victim of fraud. However, these days I often think twice about shopping in this way because the level of card crime in the UK really worries me. I think it is vital that shoppers are really careful when they use their cards.”

Tags: fraud, cards, Credit Cards, plastic, range, credit card holder, Visa Inc., flexibility

Cards set to replace cash transactions

According to recent reports less than half of all transactions will be made by cash in five years’ time. A report from the UK Payments Council has suggested that at the moment 80 percent of cash transactions were low value transactions that were for less than £10. The Payments Council said that cash was taking over as the main method of payment for transactions, whereas cash and cheque use had fallen into decline.

In years gone by those making purchases used cash and cheques to make payments, with only a small percentage having access to or wishing to use plastic cards. However, over the past decade this has changed, with a rising number of people having access to plastic cards and many preferring the convenience and ease of paying by card.

In addition to this the use of cheques has really declined over recent years, and many retailers have stopped accepting cheque payments altogether. In fact, the banking industry has confirmed that it is planning to phase out cheques altogether over the next eight years, but this is something that is being opposed by many pensioners who have become accustomed to using cheques.

Based on trends over the past few years the UK payments Council developed a report with predictions relating to how consumers will be spending in the future. The report predicts that by 2018 only one in every fifty workers will be paid in cash, whereas in 1999 this figure stood at one in eight.

An official from the Payments Council said: “Although cash will not disappear in our lifetime, the continuing payments revolution will make it an ever smaller part of our spending. The noughties have been the decade of the debit card. Especially since chip and pin, which has speeded up transactions, it has become socially acceptable to buy small items by card now too, for example in a sandwich shop or a pub.”

Tags: cards, finance, cheque, Banking, plastic

‘Tis the season to avoid store cards

As Christmas continued to get nearer and nearer experts have been warning consumers across the UK to avoid the temptation as taking out a store card, as this could lead to high levels of debt and real financial difficulties once the festive season is over.

With December upon us millions of shoppers are hitting the high streets and shopping malls to get their gift, clothes, and other Christmas goodies, and many retail staff are just waiting to pounce and talk vulnerable consumers into taking out a store card.

Store cards are fine for those that will repay their balance in full each month, thus avoiding any interest charges, but many experts state that consumers would be far better off with a rewards based credit card, as you can still avoid paying interest by repaying the balance in full each month, you can still enjoy benefits in the form of rewards, and you have the luxury of choice, as you can use the card in any shop rather than only at a specific shop.

However, the real problem is with those that do not repay their balance in full, as store cards charge very high rates of interest, and the interest that you will pay on any outstanding balance will by far exceed any rewards and discounts that you receive. Therefore those that wish to spread repayments on their Christmas spending are strongly advised to opt for a 0% purchase credit card in order to avoid paying interest rather than an expensive and restrictive store card.

One industry official stated: ‘With storecards the advice is simple: Don’t use them, avoid the gimmicks, don’t be lured in. Invariably people forget about spending on their plastic, or they use credit precisely because they know they won’t be able to repay the debt immediately. Under those circumstances there is no more expensive form of borrowing than a storecard. The discounts can be attractive, and some storecards offer 0% deals if you spend a lot of money in-store. So if you’re adamant you need a storecard, ensure you make the most of it by keeping up to speed on all the incentives on offer.’

Tom Smith
1st December 2007

Tags: cost, cards, interest, uk, store, credit, incentives, purchases, high

The importance of keeping your credit clean

Over the years more and more of us have become reliant on credit for the things that we need in life, whether it is a new home or a new car or whether it is to fund a wedding, and education, or even a luxury holiday.

Most of us would be lost without our credit cards, and the majority of us take the ability to be able to open a current account for granted. Yet, if you find yourself facing severe credit problems you could find all of these things impossible, leaving you to deal with a very bleak and difficult financial future.

This is why it is so important to keep your credit in good shape. Those with good credit can enjoy a far easier financial future, with access to a choice of financial services and products from a wide choice of lenders. People with good credit can get the best interest rates, making it more affordable to take out finance. Whether you are looking for a mortgage, a personal loan, a secured loan, a credit card, a store card, or any other type of finance you will find that having good credit can make a huge difference to the amount you pay on your borrowing – and whether you are even eligible to get the credit that you need.

Your credit can be affected in a number of ways. Firstly, it is important to remember that having no credit rating can be as bad as having a poor credit rating, as it means that lenders have no way of knowing whether you are going to be a viable risk when it comes to taking out finance. Therefore, it is important to kick start your credit as early on as possible. One thing that has a major effect on your credit rating is your repayment habits – those that pay their bills and debts on time, regularly, and for at least the amounts requested will enjoy a good credit rating and access to some great deals on finance.

If, however, you make regular late repayments on your financial commitments, or worse still you default on your financial obligations, you will find that your credit rating rapidly declines, and this is where you will start experiencing problems. Those with poor credit will find that their access to finance is greatly reduced, and many lenders will not take risks on those with damaged credit, particularly in the current economic climate. Those with very bad credit may find that they cannot get any form of unsecured finance, and will have to rely on credit that is secured against their homes – even then the interest rates charged are likely to be very high.

There are other factors that can adversely affect your credit, such as fraudulent activity, out of date information, or mistakes on your credit file. This is why it is advisable to order a copy of your credit report on a regular basis and checking through the information on the file. You may find that there are mistakes and inaccuracies that could having an adverse effect on your credit, out of date information that needs to be updated, or even suspicious transactions that could result in your credit rating taking a knock. If you pick up on anything like this you should contact the credit reporting agency as early on as possible to get it rectified.

You should also bear in mind that a log is made on your credit file each time you apply for finance, and the more rejected finance applications that are logged onto your file the more your credit rating will suffer. Therefore if you are turned down for finance you should resist the temptation to keep on making applications. Instead, try and find out what may have affected the lender’s decision by going through your credit report, and wait at least three months before you make another application.

Related articles:

• How To Build Up a Good Credit Rating
• Credit Building Tactics

External links:

• Credit Reports
  Every time a customer applies for a financial product such as a credit card, the credit company will consult that customer’s credit file. This file records all their financial activity in terms of credit applications and banking activity.
• Credit Cards Designed To Improve Your Credit
  Credit cards have become very popular over the years because of the ease, convenience, and flexibility that they provide, and these days there are many different types of credit card available
• Applying For Credit Cards When You Have Bad Credit
  For those with a poor credit score, getting a credit card is harder. However, there are solutions and we will discuss and offer these in the article.
• Using Your Credit Card To Build Credit History
  Let’s say you want to buy a house, but you need to get a mortgage to help pay for the house. However, you have no credit history to speak of, so how can you apply for the mortgage to get your dream home?

Tags: credit, debt, bad, rating, Loans, secured, poor, personal, build

Payment Protection Insurance Cover

Anyone that takes out finance likes to have the peace of mind that they are protected against situations that could render them unable to make repayments, and payment protection insurance cover is an effective way to do this. Read more

Tags: protection, finance, credit, ppi, cover, illness

Organising your spending money when going abroad

When you are jetting off abroad there is a great deal to try and think about and organise – it can be easy to forget about something as simple yet important as sorting out your spending money.

However, it is important to organise your spending money properly when going abroad, otherwise you could face security issues or costly charges that could put the dampeners on your holiday. It is best not to rely on any one particular source for your spending, and there are a number of options that you should look at to fund your spending whilst on holiday.

Most people benefit from taking a combination of cash and traveller’s cheques when going on holiday in order to ensure that they increase security for themselves. It is a good idea to take a credit card along as well for emergencies. If you take just cash on holiday with you and your money then gets lost or stolen, you could find yourself without any comeback, and you could be stranded without any money of means of paying for anything. This is why it is important to take a smaller amount of cash rather than relying solely on cash for your holiday spending.

Of course it is important to take a small amount of cash. This includes English currency for when you are travelling to and from the airport or departure point, and for any purchases you may want to make whilst at the airport/ferry port/departure point. You should also take a small amount of cash in the currency used in the destination to which you are travelling for things such as cab fares when you arrive and any smaller purchases you may wish to make on your first day before you have got yourself organized.

Most people prefer to take the bulk of their spending money in the form of traveller’s cheques, which are available from banks, post offices, and other foreign currency providers. You can get traveller’s cheques in Sterling as well as in other currencies. Although it can take a little longer to make a purchase using a traveller’s cheque instead of cash, you have the added security that you can quickly get your cheques replaced in the event that they are stolen or lost, although you should remember to note down the cheque numbers and the contact details for replacement sot that you have these details to hand whilst you are away.

Taking a credit card along for emergencies is another good idea. However, if possible you should avoid using your card unless you really have to, as you could find that the charges imposed by credit card companies for each transaction made can quickly add up, and you could have a shock when your statement comes through. In particular you should avoid using your card to make cash withdrawals whilst abroad, as the combined charges for making even one withdrawal a day can be very high.

Be careful about becoming the victim of credit card or debit card fraud whilst abroad, as recent reports have suggested that Brits have seen a rise in card fraud whilst abroad. Always be vigilant when you do use your card, and if your card goes missing make sure that you report it right away so that the account can be frozen to minimise on any fraudulent transactions or theft carried out using your card.

Tags: credit, travel, money, cards, transactions

ICICI to expand in UK

Indian bank ICICI is planning to expand its operations in the UK, offering consumers the chance to take out personal loans, current accounts, and insurance services.

The bank is planning to expand its services over the next year. In addition to expanding operations the company has stated that it will also improve on the time it takes to respond to customer queries, which currently takes between 24-48 hours.

ICICI is a subsidiary of the second largest bank in India, and was established in 2003. It has enabled consumers in the UK to enjoy excellent rates on savings accounts, and due to its high rates on savings has gained popularity amongst consumers in the UK. However, one thing that has gone against the bank is that many consumers have never heard of it and therefore have avoided it despite the high rates of interest offered on its HiSave Account.

Until recently the bank had refused to sign up to the Banking Code in the UK, and consumers were concerned about this as well as the bank’s reputation when it came to dealing with customer complaints and queries. One official from ICICI stated that the reason that it had not signed up to the Banking Code previously was because its bank cards were not yet chip and pin compliant.

One official from the bank stated: ‘The major obstacle was that our cards weren’t compliant. Customers can now change their pin numbers as they like and, as our systems have become more automated, we have cut down on the time it takes to open a new account to bring it in line with the industry average.’

Alan Wright
15th November 2007

Tags: cards, Loans, indian, account, credit, icici, bank, personal, current

Financial regulators are ’sleeping on the job’

A debt charity in the UK has accused financial regulators of being ‘asleep on the job’ stating that many consumers in the UK are being pushed into soaring levels of debt by irresponsible lender but that regulators are failing to take the necessary action.

According to officials from the Citizen’s Advice Bureau, which deals with many debt related issues, there have been over 1.7 million debt related issues to be dealt with by the bureau over the past year, which reflects a rise of 20% on the previous year.

Officials state that although the CAB is doing all that it can to help consumers deal with their debt related issues, it is up to financial regulators to try and tackle irresponsible lending in order to tackle soaring debt levels. The charity is currently embarking upon a conference to help consumers to deal more effectively with money issues, and this problem has been highlighted as part of the conference.

One CAB official stated: “Time and time again, we come across people in desperate straits who need not be there if the firm who lent them money had acted responsibly on day one. And while some regulators have taken action on scandals like the mis-selling of payment protection insurance, others seem to be asleep on the job.”

The Cab says that rising debt is one of the major issues facing the economy and that action must be taken by the financial services industry to combat the problem.

According to recent data spending on plastic has rocketed by nearly 50% since 2002, and in 2006 Brits spent around £511 billion on credit, debit, and store cards. However, figures from the Bank of England show that there has been a steady decline in the amount owed on credit cards since the start of 2006.

Alan Wright
14th November 2007

Tags: cards, plastic, credit, finance, debt

Competition Commission still investigating PPI

The controversy over payment protection insurance has been going on for some time now, and regulators have been investigating the problems surrounding the sale of PPI after it was found that many consumers were being mis-sold this insurance, and that in some cases the cost of PPI was higher than the interest costs on a loan.

The Competition Commission has stated that its investigation into PPI is still ongoing as no conclusions have yet been reached.

The Competition Commission has stated that the issues that are being considered are complex and therefore more time and consideration is required. The Competition Commission plans to publish its provisional findings in May of next year. The chairman of the inquiry stated that the Competition Commission had already reviewed a substantial amount of evidence, but added that there were areas that needed to be looked into further.

The chairman stated: “We are far from making up our minds. But we are focussing on the amount of competition for PPI that distributors face at the retail level.”

He added that the Competition Commission was aiming to complete the inquiry as soon as possible but had to take into consideration areas that needed to be looked at further. He said: “…we are also conscious that the issues we are deciding upon are by no means simple and it is vital that we carry out our work thoroughly, ensuring that all parties receive a fair hearing.”

A number of issues relating to PPI are being looked into by the Competition Commission. This form of cover is designed to protect against falling behind on repayments on loans, credit cards, and other forms of finance.

Alan Wright
13th November 2007

Tags: Insurance, ppi, competition, Loans, cards, commission

Switching and saving is easier than ever

There are many different ways to try and save money on your monthly outgoings these days. You can go through your income and expenditure, and try and cut back on luxuries and money spent on social events. You can also go through and cancel any unused subscriptions, such as gym or magazine subscriptions that you don’t really make use of. Read more

Tags: Insurance, credit, pet, Utilities, electricity, home

Using the Internet to find affordable finance

There are many different types of finance available these days for those with good credit and those that own their own homes. Read more

Tags: online, repayments, good, internet, Loans, finance

Credit card companies make up for lost charges

Credit card companies are increasing charges, rates and fees in order to prop up their profits after a government watchdog forced them to cut penalties for exceeding credit limits.

In 2006, the Office of Fair Trading (OFT) ruled that companies could only recoup the costs they incurred by card holders going over credit limits or making late payments.

Previously, charges for such minor failings had been met with hefty fines of £25 or more, but the OFT ruling forced the industry to cut charges by around 50 per cent.

However, personal finance analyst Defaqto has claimed that the credit card companies are making up for this lost source of revenue by other means.

“Credit-card providers have lost a great deal of highly profitable revenue because of the charges cap and will inevitably seek ways to replace their lost income,” principal banking consultant David Black warned.

Amongst the new kinds of charge credit card firms are levying are charges for under-use of cards and for failure to notify them of a change of address. At the same time, familiar old fees have been boosted.

Tags: consultant, cards, card holders, watchdog, business, Amongst, credit card firms, UK default charges controversy

Credit cards hit by widespread rate increases

Over 120 increases in rates and fees have hit the UK’s credit cardmarket.

According to Moneyfacts.co.uk, in the past two months, cards have felt the indirect impact of the sub-prime mortgage crisis that has led to a global credit squeeze and resulted in rising charges.

The website’s research has found that cash withdrawal fees have increased on 69 cards, 25 now have higher rates on cash withdrawals and foreign usage charges have spiralled on 18 cards.

Esther James, credit card analyst at the website, said: “Following a year of rising rates and fees, its time to take a look at your card. Check the interest rate you are paying, as there are still some great 0 per cent deals on purchases and balance transfers to be found.

“So don’t pay interest unnecessarily. Make sure you look after your own pocket instead of fuelling the profits of the card providers.”

She added that there is enough choice for consumers not to be caught out, with 300 credit card providers on the market.

Tags: credit, cards, increase, interest, rates, apr

FSA to publish new PPI guidelines

The UK’s financial regulator, the Financial Services Authority, is to publish new guidelines in relation to Payment Protection Insurance on its website next year.

Payment Protection Insurance, or PPI, has been at the centre of controversy over the past year, with many claims that this type of insurance was being forced onto borrowers, mis-sold, and in some cases added onto finance deals without the consumers even knowing about it. Banks and lenders make a lot of profit on the sale of PPI, but in many cases customers end up with expensive policies that they cannot even benefit from.

Payment Protection Insurance is designed to help those taking out finance, such as credit cards, loans, and other forms of credit. The idea behind the cover is that consumers will be covered for a specified period in the event that they are unable to work and therefore make repayments due to redundancy, illness, or accidents. However, research was carried out by various agencies, and the industry came under severe criticism for the inappropriate sale of policies amongst other things.

Many people have ended up purchasing PPI that is not suited to their needs as a result of this mis-selling, and the FSA aims to steer customers towards suitable plans based on their needs via the website. Customers will be asked a number of questions on the site, and will then be able to view a choice of suitable policies so that they do not end up purchasing inappropriate PPI.

In addition to helping consumers to find the right PPI policies for their needs, the FSA has also promised that it will be taking far more stringent action and imposing far higher fines on companies that are found to be mis-selling Payment Protection Insurance in the future.

Tom Smith
4th November 2007

Tags: fsa, finance, Loans, protection, credit

Students need to be more careful over getting into debt

According to a recent report the level of student debt in the UK is on the up, with many students graduating from university having racked up huge levels of debt along the way.

One credit reference agency is now urging students to think very carefully before getting themselves into debt, and to ensure that when they do take out credit cards and loans that they use the money sensibly and for necessities, and they make the repayments sensibly and on time.

Melanie Mitchley, an industry expert from the firm Call Credit has stated that students need to be mindful of the effects of getting into debt, and need to be careful about building up debt. She stated that new students need to manage their finance more sensibly, and need to keep on eye on their finances.

According to Barclay’s figures former students have been graduating with debts that are in excess of £13,000 on average. Another survey into student debt indicates that students could soon be graduating with average debts of around £20,000.

Ms Mitchley stated: “We are urging all students whether freshers or in their final year to be aware of the potential pitfalls if they don’t take control of their financial affairs. Our experience has shown that taking on credit needn’t be a problem if you manage your finances well and ensure you keep up your repayment.”

Another survey carried out by the Halifax showed that credit cards, overdrafts, and loan were amongst the most common forms of debts for students, with 43% of students surveyed having borrowed on credit cards, 73% using an overdraft facility, and 83% having taken out a loan.

One Halifax spokesperson stated: “These are significant sums for anyone, let alone someone who is not yet working full-time.”

Tom Smith
5th September 2007

Tags: interest, debt, owe, student, cards, credit, Loans, repayments

Barclays now offers travel cards

With millions of Brits heading off on their summer holidays abroad, one major consideration is how to deal with taking money abroad.

Some people rely on cash and traveller’s cheques for spending abroad, whereas others prefer the convenience of credit and debit cards, despite the security risks associated with using your plastic abroad. However, there could be a safer alternative available, that combines easy and convenience with increased security.

Pre pay travel cards are available for consumers that want the ease and security of having a card rather than cash when they go abroad, yet do not want to risk loss or theft of their regular credit and debit cards. These cards are also useful for those that want to ensure that they do no spend more than they have budgeted for when they go abroad. Like a pre pay phone, these cards can be loaded with cash before you go on your holidays, and can be used up to the amount that you have loaded onto the card.

Barclays has now decided to offer travel cards to customers, which will be free to obtain and load with cash. However, ATM withdrawals will be charged at 2%, with a minimum £1.50 charge, and there will be a 2.75% conversion fee if it is in a different currency. A Barclay’s spokesman stated: ‘Pre-pay cards are safer than cash and more flexible than travellers’ cheques. Furthermore it helps holidaymakers budget for the spending on their trip by not allowing them to spend more than the balance on their card.’ 

There are travel cards available from other providers as well, and these are the Post Office, which charges a flat fee of £10 for the card and for loading, and from Travelex, which charges 2% of the amount being loaded onto the card with a minimum fee of £10.

Tom Smith
17th September 2007

Tags: rewards, travel, spend, minimum, fee, cards, travelex, credit, earn

Many banks and card companies to be sympathetic over postal delays

Over recent weeks the UK has been hit by a number of postal strikes, which has disrupted many services.

A number of banks and credit card companies in the UK have stated that they intend to be sympathetic with customers who may have suffered as a result of the postal strikes in terms of payments coming in late because of the postal delays. Although banks have suffered a fair amount of bad press lately some of the leading banks and credit card companies stated that they would take the postal strikes into account when it came to customers’ accounts.

The postal strikes were set to go on for two week in total, and this means that those paying by cheque will find that their payments may be delayed, which could result in their bank accounts exceeding the overdraft limit or their credit cards going over the credit limit due to late payment. Banks and credit card companies are urging consumers that experience this problem to contact them, stating that they will ensure that they are sympathetic when it comes to the removal of charges that were applied as a result of late payment because of postal delays.

One Barclaycard official stated: ‘We will take an understanding approach and if anyone does incur a fee they should come and talk to us.’ Lloyds TSB, Halifax, and HSBC have also stated that they will treat each case sympathetically, and that customers that have experienced postal problems that have affected their accounts should contact them as early as possible. Other banks have added that customers may want to look at alternative methods of payment whilst the postal strikes are underway.

Consumers are warned that trying to dupe the banks into thinking that payment is late because of postal strikes will not be easy. One bank spokesperson stated: ‘We will treat every customer individually and do our best to be sympathetic. But if someone is always in the red, the postal strike will probably be just another excuse and will be seen accordingly.’

Tom Smith
17th September 2007

Tags: postal, strike, payments, red, cards, credit, interest, charges

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: cards, credit, balance, cash, back, deals, current, offers, transfers

HSBC may be confusing customers over withdrawal fees abroad

With the summertime fast approaching many people in the UK are getting ready to jet off abroad to enjoy a relaxing holiday, and most will go armed with their debit cards in case they need to withdraw any cash when they get to their destination.

For consumers who have a packaged current account with HSBC the news appeared to be good, as HSBC has been boasting that these customers can enjoy using their debit cards at cash machines abroad without facing any withdrawal fees. However, although this makes it appear that the transaction will be totally free of any charges this is not actually the case.

HSBC do waiver the withdrawal fee for customers that have a packaged current account, which is basically a premium account that offers a range of benefits but costs the customer fourteen pounds a month. Being able to make fee free cash withdrawals at cash points abroad with a debit card is one of the benefits offered to these account holders. However, what many consumers fail to realize is that a loading fee of 2.75 percent is added to the foreign currency exchange rate.

According to campaigns and advertisements from HSBC: ‘Withdrawals from Cirrus/Maestro ATMs worldwide, free from HSBC transaction fees’ and ‘Cash withdrawals from ATMs worldwide are free from HSBC charges’.

However, viewers that look at the foot of the advertisement will see the small print relating to the loading fee, which means that these transactions will not be free of charge because of the increased foreign currency exchange rate.

An official from HSBC stated: ‘The 2.75% loading is not a fee. It’s part of how we calculate our exchange rate. We don’t believe we have misled our customers.’

However, Nationwide, which is one bank that does not charge any loading fee or additional charges is looking into the claims made by HSBC.

Tom Smith
12th June 2007

Tags: abroad, cards, cost, credit, hsbc, confusing

Happy birthday debit card

This beginning of June marks the twentieth anniversary of the debit card in the UK.

It is difficult to imagine how the nation managed without the debit card, but until 1987 this is exactly what we did. At the beginning of June 1987 Barclays launched its Connect Card, revolutionizing the way that consumers accessed their cash. Soon bank customers everywhere were able to access their money instantly and easily, as well as being able to make purchases quickly and conveniently.

Within a year of the launch of the Barclays Connect Card, a million debit cards had been circulated in the UK, and this has steadily grown over the years with nearly seventy million debit cards now in circulation, two decades after the initial launch. According to APACS around 143 purchases per second are now made through the use of a debit card in the UK, with people paying for everything from holidays and electrical to petrol and groceries with their plastic.

Debit cards are more popular than credit cards in the UK, and 85 percent of consumers in the UK have a debit card compared to 66 percent of consumers that own a credit card. Nearly seven billion transactions each year are carried out on debit cards.

A spokesman from Barclays stated: “The massive change when debit cards were introduced was that people were able to leave their chequebooks at home. It gave people the convenience to access their current accounts anywhere in the world. It was a massive convenience for the retailer as well.”

He added: “Without payments moving to an electronic platform, internet retailing could not have taken off. The ability to make a payment accurately without having to send off a cheque has created this online channel for retailers.”

Tom Smith
12th June 200

Tags: bills, payments, credit, debit, shopping, pay, switch, cards

Britons lack financial education

We are not receiving enough education about our finances and this is leading to problems in later life.

That is according to the ifs School of Finance which is highlighting the problem as part of Credit Awareness Week (CAW).

The financial education charity is keen to promote the importance of learning about money so that we all perform better when it comes to banking.

New figures, released by Credit Expert, have shown that 80 per cent of us regularly overspend and many of us have already considered declaring ourselves bankrupt.

The research found that nine per cent of us have taken out a credit card to pay off the debt on another card, while ten per cent have missed payments on loans, mortgages and cards.

It is statistics such as these that experts say show just how financially unaware many Britons are.

“What this research seems to expose is a serious lack of understanding of the long-term consequences of these actions and how it can affect your credit rating – ultimately impacting your financial future,” said Credit Expert’s managing director Jim Hodgkins.

“We feel it’s imperative that people fully realise the implications of not managing their finances properly.”

The ifs School of Finance is pushing the government to include a GCSE in the national curriculum that focuses on money and how to handle it properly.

Tags: financial future, statistics, finances properly."The ifs, education charity, Credit Awareness Week, Expert's managing director, director jim

Are You Paying For Your Cash Back Credit Card?

The offer seems to be too good to be true.  Spend money on your credit card and your provider will give you cash back on the card as part of your credit card loyalty program.  The more you spend, the more cash back you become entitled to. This all sounds well and good, but if you’re not careful you may very well find out that it is you who are paying for the cash back bonus you’re getting, not your UK credit card provider.

In order for your cash back reward program to work in your favor you need to be a disciplined credit card user.  This does not mean that you should not use your credit card, or only use it in certain circumstances.  In fact, you really should be using the card as often and as much as you can if you want to take the full benefit of the loyalty program.  What it does mean, however, is that you need to make sure that you clear your credit card balance at the end of each credit card statement billing date.  If you fail to clear your credit card balance on the statement due date, and you carry-over your credit card balance to the next month, then you start to become the person paying for your cash back rewards, not your credit card provider.

The reason why it is so important that you do not carry over a credit card balance to the next payment statement date is because you need to avoid incurring any interest or fees if you want to benefit from the cash back loyalty program.  As soon as you lose this, any benefit you would have got from your cash back credit card loyalty program will be cancelled out by the interest and fees you need to pay for carrying over a balance on the card.  Indeed, you may well find that the interest and fees you pay each month for carrying over the balance on your credit card will exceed any cash back you would be entitled to.  Unfortunately, this aspect of cash back credit cards is something that UK credit card providers are relying on in order to fund the cash back they’re offering you in the first place.

Consequently, if you are the type of UK credit card user who pays off their credit card statement balance at the end of each billing cycle, then having a cash back credit card loyalty program can prove to be very lucrative for you.  However, if like 60% or so of the other users of UK credit cards you are a borrower on your credit card, then it is very likely that you should look for some form of alternative loyalty program or, more importantly, a credit card that offers you a lower monthly interest rate than your current card provider offers, as, in the long run, this is very likely going to save you more money.

If you are in any doubt as to whether or not a UK cash back credit card is for you, be honest with yourself and ask yourself whether or not you have the discipline to pay off your credit card statement each month.  If the answer to this question is yes, then this card is working for you.  If the answer is no, you are paying for your credit card cash back loyalty program offer – and then some.

Richard Smith
13th May 2007

More Information:

• Cash Back or Rewards – What’s Your Preference?
• Available Types Of Credit Cards
• Credit Card Charges

External Links:

• More cash back credit card offers from CardGuide.co.uk
• Cash Back or Rewards – You Choose
  Not sure which would be the best for your spending levels? This article discusses the advantages and limitations of bothtype of credit card offers

Tags: cash, credit, cards, fees, rate, rewards, back, charges, apr

Annual fee imposed by Morgan Stanley

Customers using the Black cash back credit card with Morgan Stanley have been hit with a £20 annual fee. The Black credit card is offered to customers that have been turned down for the platinum card with Morgan Stanley, although it is not actively marketed by the company.

The cash back levels on the Black card are 1% for the first £2000 worth of purchases in the year, and 0.5% thereafter. However, the cost of the annual fee means that those spending less that £2000 on their cards will effectively have their benefits offset, which means that the card is not really providing any reward at all, despite being a cash back card.

According to officials from Morgan Stanley not all customers using the Black cash back credit card will be charged the annual fee.

One Morgan Stanley spokesperson stated: ‘We have received the spending patterns and repayment history of customers and as a result we have imposed the fee for a number of customers.’

However, some cardholders are annoyed by the charge, and feel that it is unjustified and unwarranted.

One Black cardholder stated: ‘I spend around £300 a month on the card and clear the balance by direct debit at the end of each month. I’ve never missed a payment and I suppose I’m one of those customers that doesn’t actually make the credit card company any money. I liked the cashback aspect of the card, but this fee doesn’t make it worthwhile now.’

The annual charges are due to come into force in June of this year, and consumers that want to avoid having to pay an annual fee should start looking for an alternative credit card before this time. As with many other card companies, it is thought that this annual fee could be a way for the card company to recoup some of the revenue losses that resulted from financial regulators placing a ceiling limit on penalty charged last year.

Tags: charges, back, credit, morgan, earn, cards, annual, stanley, fee

Consumer group wants investigation into calculation of credit card interest

The UK consumer group, Which?, has demanded an investigation into how credit card companies calculate the interest to be paid on cards, claiming that many companies are using a wide range of methods to calculate interest, which is not only netting them more money but is also causing mass confusion for credit card users.

According to the watchdog, these credit card companies are using around a dozen different methods in order to calculate interest on credit card repayments, and the confusion that this is causing is resulting in the companies making even more money from their customers.

Which? officials have gone on to say that the way that these credit card companies are calculating the interest to be charged means that comparing APRs on credit cards to find the best deal is ineffective. Which? states that credit card companies that make up for ninety percent of the credit card market are using around a dozen different ways to work out the interest. This includes the top twenty providers of credit cards. According to Which? there are now a number of factors that are used by these companies in order to determine how the interest will be calculated on a particular account.

One official from Which? stated: “People believe that APRs are a dependable way of comparing credit cards, but our research shows that APR cannot to be relied upon for true credit card comparisons.”

However, APACS officials state that using just one way to work out interest would also affect consumers, as the process used may not suit every consumer.

One APACS official stated: “There are a huge variety of cards on the market and some people prefer to have a lower APR but pay earlier, others might like a slightly higher APR but only want to pay interest on the amount left outstanding.”

Tom Smith
28th April 2007

Tags: cards, compound, credit, interest, calculate, charges, rates

Costs are recouped on credit card penalty ceiling limits

In 2006 financial regulators in the UK reviewed the penalty charges that were being imposed on the accounts of credit card holders that made late payments or went over the agreed credit limit on the card, even if only by a few pounds.

In many cases these charges were set at around thirty pounds – sometimes more depending on the card issuer or credit card company. As a result of the review, financial regulators in the UK enforced a new rule that meant that banks and credit card companies in the UK could not charge more than twelve pounds in this sort of situation – a move that cost many card issuers and companies a fortune in lost revenue.

However, it seems that many banks are now trying to recoup the revenue that has been lost through the ceiling limits placed on these cards by finding other ways to try and get money out of card holders. They are doing this by pushing up the cost of making transactions through cash machines, charging customers huge amounts of interest for the privilege of using their card to withdraw cash from machines.

A spokesperson from the price comparison website Uswitch stated:  ‘Consumers could be forgiven for thinking that they are being treated as the banking industry’s personal ATM. It’s easy to see why the major banks continue to announce record profits, which this year alone totalled in excess of £40bn, when the welfare of their customers continues to take a backseat to shareholders.’

According to Uswitch the amount of interest charged for cash withdrawals has rocketed recently, going from around twenty percent in 2005 to over twenty seven percent. Card issuers have also reduced interest free periods on credit cards.

Tom Smith
25th April 2007

• Credit Card Charges

Tags: charges, penalty, credit, costs, cards, issuers

Fraud warning not being heeded

Millions of credit card holders in the UK are leaving themselves open to fraud.

Despite continual warnings about the dangers of identity theft, many people are not heeding the advice, says Morgan Stanley Consumer Banking.

The most common mistake made by British people is failing to shred documents such as credit card statements when throwing them away.

Figures from Morgan Stanley show that 40 per cent of people fail to do this, with that number rising to 59 per cent among people under 30.

Another risk taken by many people (27 per cent) is using the same pin number for a variety of different cards and accounts, while the third most common (12 per cent) is storing pins on personal computers or laptops.

“The findings fuel concerns that Britons are not taking heed of warnings to protect themselves,” said Patrick Muir, marketing director at Morgan Stanley Consumer Banking.

“There has been a lot of attention placed on the issue of ID theft but, worryingly, many people still don’t believe it could happen to them.”

Morgan Stanley found that younger people (under thirties) are the least likely to be aware that they are the victim of ID theft as 45 per cent do not check their statements.

Tags: cards, Marketing, Financial economics, Stanley Consumer Banking.The, director, Caterpillar, continual warnings, identity theft

The Pros And Cons Of Payment Protection Insurance

Lenders are always eager to convince borrowers to protect their repayments for loans, credit cards, store cards, mortgages and other financial products. And they have a point. People in the UK are saving less and borrowing more, with a high rate of debt. Read more

Tags: Insurance, payment, ppi, cards, claimsoft

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: store, charge, rates, purchases, credit, sales, cards, cost, interest

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: offers, commission, lenders, loan, uk

UK Credit Card Consumers Should Be Watchful

The latest scam to defraud vulnerable credit cards holders in the UK has come to light in the Worcestershire area, where thieves pretending to be police officers or bank workers managed to steal credit cards with which they then took cash from consumers’ accounts. In the recent incidents the thieves managed to get away with thousands of pounds after obtaining the credit card PIN numbers fraudulently from consumers that thought that they were talking to professionals and officials.

According to police officials, the thieves had acted very convincingly, and had actually called consumers to tell them that they were in danger of being defrauded and that they were trying to stop this from happening. The thieves posed as officers and bank officials in order to convince the victim that they were acting in their best interest, and as a result obtained personal banking and financial details from consumers.

Officials have now warned that consumers need to ensure that they don’t give out any information of this sort over the phone. One officer stated: “Banks, building societies and the police will never ask for PIN numbers over the phone or even face-to-face.” He added: “They are a matter for the individual only. If someone does ask, no matter the circumstances, suspicions should be immediately aroused and the incident reported to police.”

Consumers have always had to remain vigilant for different types of credit card fraud, and this is one of a long line of different scams that have seen consumer conned out of thousand of pounds in the UK. Police have asked card holders to challenge anyone that they are suspicious of ‘firmly but politely’ in order to try and verity their identity. Officers have also issued local and national numbers for anyone to report suspicious activity of this sort.

Tags: credit, steal, consumers, fraud, thief, theft, types, cards, uk

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: cards, balance, best, transfers, choose, apply

The Pros And Cons Of A Business Credit Card

There are hundreds of business credit cards from banks and other business service providers. In fact, there are so many that it can be difficult to choose the right one.  Here’s a guide to what you should look at when choosing a business credit card and what to avoid to make sure your business stays financially healthy.

Business Card Advantages

One of the main advantages of a business credit card is that it can be used to manage cash flow. Business owners and their employees can use business credit cards to pay for goods or services that require immediate payment. At the same time, they can benefit from an interest holiday of up to 56 days before the money is deducted from their business accounts. Deferring payments in this way can be very useful for business owners.

Another key advantage benefits both employers and employees. When employees travel on business they often have to pay for hotels, car hire, flights, meals and business entertaining. In many cases, this comes out of their pocket and they have to wait to be reimbursed. Using a business credit card means that employees can charge these business expenses straight to the business without waiting for reimbursement. This keeps their personal finances healthy.

Saving Accounting Time

For employers, this practice has another advantage. Hours and hours of accounting time (and business money) can be spent on sorting out employees’ expenses. This workload is much reduced with a business credit card. While businesses may choose to have the backup of having employees submit expense reports, the business credit card statement may be enough. Each month, business owners get a statement that itemises all transactions on the business account, regardless of which employee made them. Some business accounts offer advanced reporting features that will help with VAT calculations.

Business Card Disadvantages

Despite these advantages, there are a couple of major disadvantages to business credit cards. For example, if an employee accidentally or deliberately reveals card details, there could be expensive transactions on the account. Even if the employee has committed a fraud, the business may still be liable. Such situations can also take a long time to sort out.

The other potential issue is the same for business credit card holders as it is for personal credit card holders. Money spent on a credit card is actually debt. With preferential interest rates and long interest free periods, business owners will need to make sure that they don’t get into a cycle of debt. This could seriously damage the long term financial health of their business.

Other Business Finance Options

For this reason, it is also worth considering other financing options for the business. A business debit card, for example, keeps tight control of access to the account. In addition, business owners cannot spend more than they have in the account, unless they have agreed an overdraft facility. A business loan is another option worth serious consideration. Whichever option business owners go for, it is essential to manage finances prudently and avoid getting into long term debt.

Tags: expenses, details, apply, credit, accounts, finance, costs, personal, cards, business