Getting better information on credit in current economic and financial climate

The global financial crisis and recession has had a profound impact on the lives of many people in terms of finances, and one of the areas that has been deeply affected by the economic and financial climate over the past couple of years is the financial sector. Read more

Tags: debt, credit, finance, capital one, personal finance, Credit score

Credit card industry speaks out against government proposals

The credit card industry in the UK has spoken out against one of the measures that has been proposed by the government to try and curb some of the practices used by credit card companies. One of the measures that the government has proposed in order to reduce problems relates to the credit limits that credit card providers offer, and the aim of the government was to try and get credit card companies to reduce these limits. Read more

Tags: Credit history, interest rates, UK Cards Association, Stoozing, Credit card, personal finance

Credit card companies to start targeting high earners again

Whilst there has been something of a credit boom in the UK over the past decade, prior to this boom it was not unusual for credit card firms to focus only on wealthy, higher earners, leaving those on lower incomes out in the cold when it came to getting credit. In fact, seeing someone open a purse or wallet with a string of credit cards suggested that the person was well off and earned good money. Read more

Tags: Credit Cards, interest rates, Credit history, credit, PricewaterhouseCoopers

Borrowers could get help from credit card firms

According to recent reports some consumers could get assistance from credit card companies if they are struggling with their credit card debt, as part of a package of proposed measures resulting from recent meetings between officials from the credit card industry and senior government officials. Concerns were raised about the situation in the credit card industry when reports showed that whilst the base rate had been plummeting over recent months credit card interest rates were still very high. Read more

Tags: Credit history, Minister Gareth Thomas, rate, government officials, card, credit card help, situation, deal

Borrowing to continue despite credit crunch

Consumers will continue to keep borrow, despite the credit crunch and its potentially ill effects, claims a financial expert.

Colin Jackson, director of Baronworth Investment Services, has said borrowers “get into a spiral” which could result in debt being built up.

Many people are now using credit cards to pay off their mortgages which is “the most awful situation to be in”, according to Mr Jackson.

He added: “If you’re using your credit card because you haven’t got enough money at the end of the month to pay anyway then you’ll run up bill on your credit card and where do you go next? Another credit card.”

Mr Jackson also said that consumers are finding it “very tough” to put money aside due to rising costs of day-to-day living.

The latest debt statistics from Credit Action shows that total consumer credit lending to individuals in October 2007 was £222 billion.

This figure has increased by 5.8 per cent in the last 12 months.

Tags: 12 months, crunch, Credit history, Credit Action, end, awful situation, personal finance

Credit cards reward disloyal behaviour

Credit card companies’ struggle for new customers is encouraging disloyalty, a new report has claimed.

By reserving the best deals for new customers only, Defaqto argues in its report ‘Credit Cards in the UK’, credit card firms are making it sensible to keep switching.

While some cards now offer “anniversary” offers as a means of keeping customers, on the whole, these are not as good as introductory offers.

The average 0 per cent introductory deal available at present lasts 9.5 months for balance transfers, while for anniversary offers, the figure is between 5 and 6 months.

David Black, principal consultant of banking, explained: “There is a clear incentive for the creditworthy to review and change their credit card on a regular basis. The credit card industry is geared to routinely rewarding customer disloyalty for the creditworthy and there seems to be little evidence of this changing.”

At the other end of the scale, however, people with poor credit ratings are finding it ever harder to get approved for credit cards at all.

A recent report from Equifax found that high street lenders, mobile phone businesses and even catalogue companies are toughening up their credit checks.

Tags: Credit history, means, clear incentive, best deals, David Black

Brits don’t know how to detect ID theft

Almost all of us are aware that ID theft is a problem in the UK but worryingly, 42 million of us do not know how to check if we have been targeted.

New research by Capital One reveals that large numbers of us are clueless about how to discover if we have become a victim of the crime and only ten per cent know what action to take if our ID has been stolen.

“It is concerning how many people we asked had no idea how to tell if their ID had been stolen, or what to do about it if they had unfortunately become a victim,” said Sanjiv Yajnik, principal managing director at Capital One.

“The tell-tale signs of ID theft often include unexplained items appearing on bank and credit card statements, receipt of bills and receipts of goods or services you haven’t asked for, being told you are already claiming state benefits you weren’t aware of or being refused a financial service despite having a good credit history.”

The study found that 99 per cent are aware of what ID theft is and 41 per cent are concerned that they will become a victim.

However, despite this, millions of Britons fail to take precautionary action to protect themselves from ID thieves.

Around 2.5 million people still throw confidential documents away without shredding them, five million leave personal information lying around and 4.5 million regularly carry personal documents around with them in wallets and handbags.

Capital One points out that this is leaving many people open to ID theft which can lead to thieves getting credit cards and loans in your name.

This in turn can lead to problems for the victim when it comes to getting a mortgage or other financial product in the future.

Tags: 5 million, Social security, ID thieves.Around, Credit history, cent, history, service

Brits confused over credit ratings

The majority of Britons are confused about their credit rating and have been fed misinformation about how it works and what it is for.

Research, carried out by Credit Expert, found that a huge 71 per cent of people believe former residents who previously lived at their address can affect their credit rating.

This is untrue and is just one of a string of falsehoods which many people have come to associate with credit ratings.

Of those who took part in the survey, 63 per cent said that they thought friends and family can affect the ratings of people they live with.

In addition, 41 per cent thought that a poor credit rating meant that you were on a blacklist. Credit Expert says this is untrue and points out that all lenders make decisions based entirely on their own policies.

As well as highlighting the myths surrounding credit ratings, Credit Expert has also outlined what kind of things can affect a person’s credit score.

Past debts play a big role in an individual’s credit rating, with missed payments remaining on a credit report for 36 months.

The score can also be affected by other people to whom you are tied financially, for instance if you have a joint account with somebody. Even if the person is an ex-partner and you have split up, it is important to ensure that all financial ties are broken.

Bankruptcy is another negative mark and will show on your credit report for at least six years.

Tags: credit ratings, role, lenders make decisions, months.The score, Credit Expert, myths, Credit history, part

Available Types Of Credit Cards

Credit, credit, everywhere …

Everywhere you look these days companies are offering you credit. There are hundreds of different brands of credit card available and there are dozens of different types of credit card too. We take a brief walk through some of them.

Reward cards

Reward cards offer points to be redeemed against specific purchases such as Nectar points, Air Miles or cash equivalent points to be used at specified retail outlets. Many global retail outlets like Virgin and Sony do their own cards to encourage brand loyalty. The Sony scheme, for example, is called Pulse Beats and points can be collected and used as discount against a whole range of Sony goods. The interesting twist here is that you get triple pulse beats if you use your Sony credit card in a Sony outlet.

Cashback

Cashback cards give you money back on your card every time you use it. Typically cashback is about 2% of expenditure and will be awarded annually although you’ll be able to see how much you are owed on your monthly statements.

Charity Cards

Charities have never been backward in utilising every possible way to raise money, so the introduction of charity credit cards was a predictable step. Usually the charity receives a donation from the lending company for every application for the card they receive and a small percentage every time you make a purchase. This kind of affinity can be very helpful for the charity, as an example, since its launch in 1996 the MBNA Childline charity card has raised over £100,000.

Balance Transfer cards

Many cards offer zero percent incentives on balances transferred from other cards. These are to encourage people to change and many do, often! These 0% balance transfer cards were supposedly to encourage people to be loyal to the particular card they swapped to. But as it’s so easy to change, many people become what are called “rate tarts”. Most of these credit cards offer substantial zero percent periods such as 9 to 12 months as the big lenders battle it out between each other, but watch out for the APR when the holiday is over!

Store cards

Store cards are still credit cards, but many people think of them as being different. All you are doing is getting credit from a particular retail outlet to buy their goods. Infamously the interest rate on these cards is very high, so many people end up paying well over the odds for items they buy using these cards and leave a balance on them for any length of time.

Pre-paid cards

These were designed for people who have poor credit ratingsand are an alternative to ‘Bad credit-credit cards’. Pre-paid cards require the owner to pay a sum up front when they apply for the card, so there is no credit as such as you are then spending your money. Hence there is usually no interest fee. There are of course all the usual requirements and penalties to ensure the user stays within their spend limits.

Gold and Platinum cards

In the nineteen eighties, once the initial wow factor of credit cards started to subside, elite cards were introduced. Like so many things in the image conscious eighties these gold and platinum cards supposedly said something about the user. Usually they required a minimum income which was higher than average and so indicated that the user was a financial success. There was an exclusivity about them. These days all that has gone. Most of the gold and platinum cards simply offer slightly different features in a lenders range of credit cards.

The array of credit cards available today is remarkable and given the convenience of the plastic is it any wonder?

Tags: Stored-value card, particular retail outlet, reward cards, Beats, Gold