Mixed feelings over store cards

When it comes to store cards there is a great deal of bad press, and these cards have earned a very bad reputation over the years, mainly because of the high rates of interest that they charge. Some store cards charge up to 30 percent APR, and this results in many people who make only the minimum repayment on their debt paying a fortune in interest and spending lengthy periods of time trying to clear their debt.

Many people are swayed into taking out a store card because retailers offer them incentives such as on the spot discounts for applying for and being accepted for a store card when they are shopping. This can tempt many people into taking out a card and getting into debt especially when the cards are promoted at times such as Christmas when people are looking for ways to fund their purchases.

However, some industry officials have said that although these cards do receive bad press and are slated for a number of reasons they can actually prove very useful for consumers. They can provide a convenient means of shopping, and like credit cards balanced can be paid off within interest free periods so that no interest is charged on the debt.

One consumer campaign group official said: ‘With APRs of around 30%, store cards are never good value for borrowing. Our investigation into the market found it was too easy to get hold of credit and that too many retailers were offering cards either without telling the customer that they’d be credit checked, or, worse still, without credit checking them at all. That’s not to mention the lack of privacy in reading out your personal details in a busy high street store.’

However, the Finance Leasing Association said: ‘There is no evidence of consumers being unable to manage their spending on cards. Customers are already able to change their mind about taking out a credit card. New EU regulation bought in February this year provides customers with an opportunity to change their mind within 14 days of taking out the card.’

Tags: New, consumer campaign group official, campaign group, high street store, percent, free periods, business, market

Consumer may end up paying through the nose for using overdrafts for Christmas spending

Industry officials have warned that many consumers may end up paying through the nose for using their overdraft facilities to fund the expense of Christmas. Many may also be planning to dip into their overdrafts to make purchases in the January sales, resulting in an increase in the number of people that will be hit with these charges. Read more

Tags: Business Finance, Christmas spending, overdraft costs, expense, sales bargains, borrowing, base, New

Millions to be reliant on credit in 2007 say Post Office

New research from the Post Office has shown that one in four of credit card holders will be starting the New Year more dependent on credit than in 2007.

Up to 41 per cent of consumers are expected to be reliant upon their credit cards for day to day living costs.

Gary Fitton, Post Office director of lending, said: “Typically January is the time of year when people struggle with their money the most.”

“Many people have over-stretched themselves over the Christmas period and have little choice but to use their credit card in the New Year,” he added.

The findings also revealed that half of card holders are intending to use their cards in the January sales while almost a third of respondents said they are expecting to make bigger purchases, such as holidays, using credit.

The Post Office is urging consumers to get their debts in control as up 53 per cent of card holders do not pay their card bills off in full each month.

Meanwhile, the Post Office has predicted that costs for holiday makers in Malta and Cyprus, the newest members of the Eurozone are set to increase next year.

Tags: period, time of year, little choice, New Year, cyprus, office director, New, director

Dirty weekend is dead

The days of the dirty weekend appear to be fading away, with new research showing that most of us prefer to go away with friends.

New research by AA Insurance shows that 55 per cent of people in a relationship have gone on holiday without their lover, while 13 per cent admit they enjoy short breaks more when their partner stays at home.

The most popular reason for taking a break without our partners, cited by 22 per cent of those asked, is that we want to do an activity which our other half does not enjoy.

A further ten per cent say that they go away alone because they need some space.

“For many, mini breaks are a chance to have some time away from their partners and do things they wouldn’t necessarily do if their partner was with them,” said Clare Emsley from the AA.

The new partner-less mini-break has been dubbed a Clean Weekend and a number of insurance firms are offering special premiums for people taking this kind of holiday.

However, many people will find that it is far cheaper to get travel insurance for a couple than on an individual basis.

Tags: New, fading away, mini, activity, holiday, research