Store cards reduce their APR’s – just

Following new regulations made by the Competition Commission, retailers have had to reduce the annual percentage rates (APRs) on their store cards to below 25 per cent, however, many have continued to hover just below this rate, it has been reported.

According to Fool.co.uk, a number of store cards offer only just below 25 per cent APR, including Jaeger’s card (24.9 per cent), Russell and Bromley (23.9 per cent) and Marks and Spencer (23.9 per cent).

The research found that some companies even increased their rates after the new rules came in, such as Marks and Spencer which hiked its rate by four per cent.

Ed Bowsher, savings expert at Fool.co.uk, said: “Store card-holders should be aware of the high interest rates which come hand in hand with introductory offers – and should remember that these cards are designed to make you spend, rather than help you save money.”

According to Halifax, the average balance on a credit card at the end of the month stands at £1,859.

Tags: Fool.co.uk, expert, percentage, high interest rates, Bromley, 25 per, hover, interest

Over £1bn to be transferred between credit cards every month

Up to £1.1 billion is expected to be transferred between credit cards every month, according to new research.

Findings from a study by Sainsbury’s Bank showed that an estimated 716,000 consumers are responsible for the transfer of the sum.

The average transfer balance is £1,500 but one in ten consumers intend to transfer plans worth £4,000.

Donald MacLeod, head of cards with Sainsbury’s, said research indicates that 40 per cent of card holders think it will take longer than a month to clear their current balance.

“Although there are a number of credit cards offering introductory 0% on balance transfers, there is a considerable difference in their duration so people need to choose carefully. Also, when choosing a card for a balance transfer, it is also worth considering what else it offers,” he added.

Meanwhile, research from Fool.co.uk showed that UK spenders are more likely to use their cards than cash when paying for everyday purchases.

Tags: Business Finance, Donald MacLeod, balance, Sainsbury, fool, Fool.co.uk, cent, sainsburys

Bank customers warned to avoid fee-paying accounts

Bank customers paying fees for packaged accounts are getting very little for their money compared with customers in free accounts, according to new research.

Findings from MoneyExpert revealed that the average credit interest rate on packaged accounts is 2.1 per cent per month, only 0.2 per cent more than the average rate available through free banking.

The average monthly fee of a packaged account is £11.61, with some accounts charging as much as £25 a month.

Sean Gardner, chief executive of MoneyExpert.com, said: “The basics of a typical fee-paying current account are frankly terrible value for money.”

“You don’t have to be a mathematician to see how an average interest rate of just 2.1 per cent compares to free banking if you have to pay a typical fee of £11 for the privilege,” he added.

The figures show that over half of all packaged accounts pay less than 2.5 per cent AER on positive balances.

Meanwhile, financial experts Fool.co.uk said that there are “lots of good offers” on the bank account market due to the effects of the credit crunch.

Tags: financial experts fool.co.uk, research, rate, Fool.co.uk, executive, free banking, fool, mathematician

Government needs to rebuild consumer trust

The Northern Rock crisis has eroded customer confidence with one in five admitting they have lost trust in banks, according to new research.

Findings from Fool.co.uk reveals that up to one in thirty consumers have considered moving their investments in the wake of the financial turmoil caused by the collapse of the bank.

David Kuo, head of personal Finance at Fool.co.uk, said that it was not only trust in Northern Rock which had been damaged by the upset.

“The ability of the Treasury, the Bank of England and the Financial Services Authority to regulate banks has also been called into question,” he stated.

He concluded that the government should ensure that the bank is returned to private ownership to prevent distortion of the banking market and ensure “healthy competition” remains to give customers the best deals.

Meanwhile, Ron Sandler, appointed as the new chairman of Northern Rock, has informed staff that the bank will remain in the hands of the state for several years to ensure stabilization.

An unspecified number of job cuts are also expected among the 6,000 strong staff.

Tags: Ron Sandler, financial turmoil, consumers, Fool.co.uk, treasury