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.

Savings could hit one trillion in five years

According to a recent report the level of cash savings in the UK could hit £1 trillion by 2012 based on current savings trends.

According to the Alliance and Leicester the level of cash savings has grown five times faster than unsecured borrowing over the past seven years, and if this keeps up cash savings could hit £1 trillion within the next five years. There are have been many concerns raised in recent years over the high level of consumer debt in the UK as well as about lack of savings.

The research also showed that there was an ever widening gap between those with liquid assets and those without, and those that move money from investments into cash accounts. Since 2000 the level of cash savings has nearly doubled, and has increased by £426 billion to £876 billion. In contrast, unsecured borrowing has gone up by £79 billion in the same period, taking it to £214 billion.

In a recent poll conducted by the Alliance and Leicester amongst two thousand respondents, over one third stated that they planned to increase their cash savings over the next few years. Based on this the Alliance and Leicester has stated that cash savings could indeed hit £1 trillion. According to one industry official part of the reason for the rise in cash savings is consumers recycling money from pensions and long term investments.

He stated: “We have a savings paradox. Households appear to be stretching themselves to meet increased taxation and a general rise in the cost of living. However, perhaps surprisingly, overall savings balances have continued to increase. It seems that the pressure has fallen on pension contributions: evidence suggests that people in their prime years are saving more cash with a view to funding their retirement.”

Tom Smith
8th November 2007

Debt considered acceptable because of student loans

According to a recent report the popularity of student loans has made debt in the UK seem even more acceptable.

According to the financial education charity Credit Action student loans have become such a norm that being in debt has become something of a fact of life. And according to officials from Credit Action these student loans have nothing to do with a need for money, but more to do with the easy access to student loans.

One official from Credit Action described student loans as ‘government endorsed debt on a massive scale’. Of course, students can find themselves in need of financial aid at some point during their education, but the easy access to student loans has resulted in many students just taking out loans for the sake of it rather than through real need, placing them on a downward debt spiral that could lead to problems later in life.

According to Chris Tapp from Credit Action there is not enough caution exercised with student loans, and the easy access to this type of finance has made debt appear to be acceptable even for the younger generation. With consumers levels in the UK at sky high levels this has raised concern amongst some charities and campaign groups, as those in their late teens and early twenties begin a debt ridden life before they have even completed their education.

According to Mr Tapp student loans enable students to live lifestyles that are beyond their means – something that they then become used to, and something that many have to continue funding through further finance, as their initial jobs after leaving college or university is unlikely to be a high paying one.

Tom Smith
17th June 2007

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

Brits losing a fortune by failing to put their cash in savings accounts

In the olden days stashing your money in various cunning locations around the house seemed to be the norm, as many people did not have access to savings accounts as they do today.

However, according to a recent survey there are still an alarming number of Brits that insist on keeping their cash in the house, which not only raises security issues but also means that collectively Brits could be losing out on millions of pounds worth of interest from banks and building societies each and every year.

A recent survey was carried out by Virgin Money, and according to the result of the survey around one in every six adults in Britain are still keeping cash in the home rather than opting to place it in a savings account. The results indicate that if these people were to put the cash that they have kept in the house into an average Internet savings account they could be accruing around £174 million each year in interest collectively. Instead, this money simply sits around earning nothing for them, and increased the risk of financial losses through theft in the event that the cash is stolen by a visitor or the house is burgled.

The survey showed that one percent of Brits that were surveyed admitted to having up to one thousand pounds in the home, whereas two percent of Brits stated that they had up to five thousand stashed in the home. Experts warn that since inflation has been on the rise, and the money is simply lying around failing to accrue any interest, it is in danger of losing its purchasing power, so consumers are doing nothing to help themselves by leaving it in the home.

Industry professional add that there is around three and a half billion pounds in total that is lying around the homes of Brits rather than being placed into savings account, and that this amount could depreciate by two hundred million pounds within the next three years.

Tom Smith
10th June 2007

Over one fifth of Brits do not save

Over twenty percent of Brits do not put aside any money in the form of savings according to a recent report. Research has shown that twenty one percent of Brits fail to put aside any money in savings.

The savings survey was carried out by Nationwide in a bid to try and determine how best to tempt consumers into opening and running a savings account. The survey also showed other facts and figures relating to Brits and the way that they save – if at all.

According to the survey, over one in five Brits saved nothing at all. However, the results also showed that thirty five percent of Brits do save money on a regular basis. In addition to this the survey revealed that nearly forty five percent of Brits tended to save on an ‘as and when’ basis, putting money aside into savings whenever they had some spare but otherwise using it for day to day cost of living.

Seventy seven percent of those interviewed as part of the survey stated that their most important consideration when it came to a savings account was a good, long term interest rate. Eight four percent also stated that the account needed to allow withdrawals without any form of penalty being imposed. Nearly sixty percent stated that they would only open a savings account with a well known provider.

Shockingly, the survey also showed that some people still use the most primitive methods of trying to save money, such as stashing their cash in various places around the home – including under the mattress. Those interested in savings accounts are advised to shop around and find an account that offers a good interest rate that reflects the rising interest rate in the UK.

Tom Smith
26th May 2007

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

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.

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