Warning for women over store cards

Christmas is fast approaching and many High Street retailers will have geared up to try and get women to take out store cards when they go into the shop to buy an outfit for the festive season. Many women every year take out store cards, as shop sales staff make them sound enticing by offering customers money off their purchase right away.

Many of the popular High Street retailers have a big push on store cards at this time of the year, but these cards come with very high rates of interest, with some charging almost 30 percent interest. This means that a debt as small as £500 could take over a decade to repay if the cardholder only pays the minimum repayment each month, as the bulk of the repayment will be swallowed up in interest.

Store cards are said to be one of the most expensive forms of borrowing, but despite this there are around 12.9 million of them in circulation, with around £2.2 billion spent on them. The number of single women struggling to repay store card debt is three times higher than the number of single men, and women are now being urged to think twice before taking out and spending on a store card this year.

An official from the Citizen’s Advice Bureau said: ‘There is a problem with the way store cards are sold. Targeting young women at the till means customers are usually more focused on the discount for their purchase than the terms and conditions of the credit.’

Another finance industry official added: ‘Customers who repay only the minimum amount on store cards could end up paying twice the price and still be repaying the debt in a decade’s time. Do not touch store cards unless you can afford to pay off the balance in full every month.’

Tags: way, Debit card, repayment, single men, sales, expensive forms, advice

Holidaymakers could benefit from credit cards

Many holidaymakers in the UK that head off on holiday each year use credit cards to make payments for purchases, and one recent report has suggested that this could prove to be an ideal solution for holidaymakers. Read more

Tags: sums of money, cheque, recent report, Debit card, rate

Cheques will be phased out if alternatives found

It has been reported that by 2018 cheques could be phased out altogether in the UK, but that this will only happen if suitable alternative for cheques are found. The data has been released by the UK Payments Council, which has set the date of 2018 to try and encourage alternative forms of payment to be developed and used so that the end of the cheque will not have such a huge impact on consumers. Read more

Tags: Banking, Debit card, Payment systems, UK Payments Council, cheque

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: Sandra Quinn, Credit Cards, credit, interest rates, Debit card, Credit history, PricewaterhouseCoopers, Payment systems

American Express encourages customers to spend more on cards

One major credit card provider has been encouraging its customers to spend more on their credit cards, according to a recent report. Despite the fact that there is a personal debt crisis in the UK card provider and financial giant American Express is said to be encouraging some of its platinum credit card holders to spend more than double their current spending by making changes to how they will qualify to claim cash back on their credit cards. Read more

Tags: american express, giant american express, Debit card, back scheme, year

Online shopping avoided by more than 50 percent of UK shoppers

Whilst the Internet has changed our lives in many ways over the years, enabling many to enjoy convenience, ease, speed, and flexibility in many situations, it has been revealed that over half of the consumers in the UK actually avoid shopping online due to concern over the risks of shopping in this way. Read more

Tags: Christmas and holiday season, online security, shopping, shopping online, Debit card, reason, card fraud

Abbey applies charges to accounts in credit

The High Street Spanish owned bank, Abbey, has found itself in trouble after a number of customers complained about having various charges applied to their account even when they were within their credit limits. According to reports a number of customers have found different charges applied to their bank accounts, ranging from a few pence to pounds, and none of the charges have been justified. Read more

Tags: abbey, money, issue, bank accounts, situation, Debit card, pence, letter

Consumer Action Group: People should reclaim overdraft charges

Many people seem unaware that they can reclaim unfair bank charges, which may be leading them into greater financial difficulty, says the Consumer Action Group.

Founder of the group, Marc Gander, has said that British people often feel a sense of responsibility if they receive bank charges, however these fines could actually be unlawful.

The Office of Fair Trading (OFT) recently won the right to investigate whether overdraft charges by banks are excessive, following a court case in which banks argued that the OFT does not have jurisdiction over the matter. The banks have until May 22nd to appeal the ruling.

According to the BBC, banks refunded about £784 million to nearly 378,000 customers last year.

Mr Gander said that consumers “shouldn’t feel blameworthy, they shouldn’t feel responsible, because it’s the banks that have caused this by levying what we think are unlawful charges”.

He advised consumers to start claiming immediately if they feel they have been unfairly charged.

Tags: unlawful.the office, right, Debit card, court case, Transactional account, Marc Gander, group founder, year

Having multiple credit cards ‘can be confusing’

Having a number of different credit cards can be “confusing” for spenders, claims a consumer guidance charity.

The Consumer Credit Counselling Service (CCCS) said that there are many reasons for people having more than one card – plastic may be used for work, one could have a transfer balance with a low interest rate and another one could be used for purchases.

However, James Ketchell, spokesperson for the CCCS, said: “It can become confusing and people have to really stay on top of their credit card spending and finances as a whole”.

He adds that in the UK, the economic model is similar to the US more than Europe due to the ease with which credit can be obtained when making purchases.

According to a report by Datamonitor, the average Briton held 1.4 credit cards at the end of 2006.

This figure is twice as many as second place Norway, while the UK has the highest number of payment cards overall – 2.8 credit or debit cards each.

Tags: different credit cards, consumer guidance charity, US, europe, Credit card, Debit card

Debit Card – It Was Twenty Years Ago Today

It may be hard to believe, but 3 June 2007 marked the twentieth anniversary of the first ever debit card to be launched. It was the Barclays Connect Card. It wasn’t long before the cards became popular with users, and within just nine months, the bank had issued a million debit cards. In the UK in 2007 there are around 68 million debit cards in issue, on which are made 143 purchases a second, totalling 6.8 billion transactions every year.

There are now more debit cards in circulation than credit cards, and there are 85% of adults who own one, compared with 66% who own a credit or charge card.

Debit cards haven’t stood still in twenty years, and they are now moving into the world of prepaid debit cards and ‘wave and pay’ technology. The former enables customers to out a positive balance onto the card before they begin to use it when on holiday or a shopping spree, and the latter technology lets consumers make relatively small purchases by simply waving their cards in front of the terminal.

Barclays’ own figures suggest that an average customer will make 210 debit card transactions in a year, with a total spend of very nearly £10,000 on the card. Apparently the biggest spenders come from Battersea who spent an average of £15,840 on their cards in 2006. At the other end of the scale, the lowest spenders were from Small Heath in Birmingham who use their cards only 92 times in a year average, with a spend of less than £5,000.

Other figures tell us that women use their cards a quarter as much again as men who actually spend 33% less than women, the figures being £52 for women and £39 for men, per transaction.

The frequency of debit card use is increasing year by year. They are most frequently used in supermarkets, where a third of all debit card transactions occur. This is followed by petrol stations where one in nine transactions take place, and departments stores take one in nineteen of all debit card transactions. Between these three destinations, they take more than half of all debit card transactions. There is a challenge, though, because the fastest growing purchase area is going to be, inevitably, from internet purchases.

Even popular games manufacturers have to move with the tide. Parkers, the makers of the Monopoly game board, have phased out cash in favour of debit cards in a new version. Instead of the garishly coloured bank notes, players will use Visa debit card instead to keep track of their money coming in and going out. There is an electronic machine which takes the card and the banker enters the details of the transaction.

Parker said it has to move with the times and its change to the game reflects the nature of society and technology advancements. Adults now use cash 70% less frequently than they did ten years ago. The electronic game is more expensive than the standard version, but if you’re short of cash…

Tom Smith
16th June 2007

Tags: small heath, Debit card, tide, barclays, twentieth, uk, Credit Cards, spree

Direct debit costing insurance customers millions

Millions of people are paying too much for their contents insurance because they are being charged for paying by direct debit.

New research from Abbey shows that 9.3 million of us are being forced to pay a combined total of £290 million in direct debit charges.

The firm found that of the 215 policies which are on the market, 44 per cent charge interest to customers who use direct debit.

It has been calculated that the average person is paying £31 a year more for the privilege, with some being forced to pay £55 a year.

Of greatest concern for Abbey is that many people may be completely unaware of the interest being charged, leading to a false sense of satisfaction with a provider.

“Using direct debit to buy home insurance is not a service you should be paying for,” said Prasad Shastri, head of insurance marketing at Abbey.

“There is no point using a competitively priced insurer if they then go and add to your annual bill using back-door methods.

“Customers should carefully look to avoid insurers that levy an additional fee for paying premiums over the course of the year,” he added.

If you are considering taking out any type of insurance check to see if a charge is levied for paying by direct debit and calculate if it is worth your while switching provider.

Tags: Business Finance, finance, Debit card, insurance customers, Financial economics, Direct debit, Direct debit costing insurance customers millions, Types of insurance