Consumers fleeced over bill payment methods

Many people these days are keen to try and reduce their outgoings, and in the current financial climate with so many people struggling financially making cutbacks has become vital for some people. One of the ways in which many people try and cut back is through reducing their bills by doing thing such as switching providers, which can help to make significant savings.

However, one way in which many consumers are wasting millions of pounds a year between them on their bills is via their payment methods. Many people fail to realise that companies these days often charge a small fortune based on how the consumer pays their bills, and that by making a simple change to their bill payment methods they could make a significant saving.

Companies such as energy suppliers, home phone providers, and broadband providers often make additional charges to those that do not pay by direct debit. Most consumers have a number of choices when it comes to making payments on bills, such as direct debit, standing order, cheque, or in person at banks and post offices.

For those that do not pay by standing orders some companies such as broadband and utility providers apply an addition monthly or quarterly charge, which can really bump up the cost of services for the customer. For example, Virgin Media, which provides phone, television, and broadband services, will charge consumers an extra five pounds a month for failing to pay by direct debit, which equates to £60 a year. In addition to this the company charges extra when customers ask for paper bills to be sent to them.

In order to save more money on their bills consumers should set up direct debits wherever possible, as otherwise they can end up being charged a small fortune on the cost of their bills. There is also another benefit to setting up a direct debit for a bill payment, and this is because it can reduce the chance s of making a missed or late payment, which can also incur charges when the payment is on something such as a credit card or loan. These missed or late payments can also result in the consumer’s credit rating being affected, which can make it more difficult to get finance in the future and makes it more expensive to get credit due to higher interest rates charged.

Tags: payment, Direct debit, finance, debit, way, loan

Do you want faster payments from your bank?

For many people that amount of time that their bank takes to transfer money from one bank account to another can be a real problem, and whilst banks are supposed to adhere to regulations that have been formed by the UK Payments Council there are many banks that still do not carry out the same day transfers in line with the Faster Payments Scheme, which was brought in back in May of 2008. Read more

Tags: Payment systems, bank account, BACS, finance, bank, cheque

Many don’t realise costs of using prepaid cards

According to a recent report many low income consumers in some of the poorest areas of the country are having benefits paid onto prepaid cards, but fail to realise the high costs that can be involved in doing this. Concern has been expressed by officials from the Department for Work and Pensions over the lack of awareness amongst consumers when it comes to the charges involved in using prepaid cards for such purposes. Read more

Tags: Credit card, prepaid credit cards, Payment systems, Prepaid, Stored-value card

Faster payments possible if consumers change banks

The UK Payments Council has recently stated that many banks are still not making same day transfers to accounts at different banks despite the Faster Payments System that was brought in back in 2008, and officials from the council have stated that if customers are not happy about the fact that their bank does not provide this service they should consider switching to a different bank, as there are some that do provide this facility. Read more

Tags: Payment Council, finance, Payment systems, Faster Payments Service, bank customers

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

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, PricewaterhouseCoopers, Debit card, Payment systems, Credit history, credit

Credit card summary boxes will be easier to understand for consumers

From June of this year credit card applicants and customers should find that the credit card summary boxes on the application forms and marketing materials of credit card providers is far easier to understand. Read more

Tags: Payment systems, Marketing, layout, shop, Credit Cards, credit card summary box, industry body association

Debit card spending overtook credit card spending last year

Recently released figures have shown that UK consumers spent more on their debit cards last year than on their credit cards, indicating that many are becoming more cautious about getting into debt in the current financial climate. Read more

Tags: Payment systems, debit card spending, slight increase, card, credit card spending

New packaged accounts launched by Abbey

Spanish owned High Street bank, Abbey, has recently launched two new packaged accounts for its customers, and according to reports has started a new packaged current account war amongst banks that are vying for the business of consumers. After taking a 28% share of the mortgage market this year, the ambitious bank is now looking to increase its share of the current account market by offering these packaged accounts, which offer a range of benefits for consumers. Read more

Tags: official, fee, biggest criticism, mortgages institution, abbey

Shoppers choosing cash rather than credit

Consumers are cutting back on their credit card spending and increasingly using cash to pay for their purchases, it has been claimed.

A survey of 17,000 shops conducted by the British Retail Consortium (BRC) revealed that cash was used for 60 per cent of transactions last year, up from 54 per cent in 2006.

The BRC said this shows people are concerned about spending money they do not have and want to keep tight control of their finances.

Another issue raised by the BRC is the cost that credit card companies charge retailers, which is four times the amount of a cash transaction.

Consumers are forced to pay for the extra charges as retailers pass them on through increased prices.

“There should be a lower fixed fee per transaction which actually reflects the cost of processing, so new technology brings balanced benefits to retailers, consumers and banks,” said BRC director general Stephen Robertson.

Savings expert at Scottish Widows, Anne Young, recently said that young people get into trouble due to the “proliferation of credit” that is now available to them, adding that more should be done to educate people on managing their credit.

Tags: young people, amount, Payment systems, Business Finance, online shopping, Financial services, credit

Store cards ‘most expensive form of credit’

Store cards are probably “the most expensive form of credit that anyone can consider, claim debt experts.

Thomas Charles said that if consumers do decide to take a store card out, they should think very carefully about how they intend to pay the balance off.

James Falla, managing director of Thomas Charles, said: “My advice 100 per cent is don’t take out a store card full stop.”

He stated that this is because the average store card is 29 per cent APR, a rate which is “very, very high”.

Mr Falla also added that the credit crunch has resulted in credit criteria being tightened with some consumers claiming their limits are being reduced.

According to recent research by comparison site uSwitch, shoppers with store cards are paying an average of 62 per cent more interest than those using credit cards.

The average store card APR is 26 per cent – a figure ten per cent higher than the average credit card at 16 per cent APR.

Tags: director, average store card, cent, Payment systems, figure

Consumers need to be wary credit card fraud

Consumers need to be wary of credit card fraud when paying for goods in shops, one security expert has claimed.

The CPP warned that there is a risk that sometimes businesses work in collusion with fraudsters to deceive customers by using two machines – one that they skim the card through before putting it into the chip and pin machine.

Danny Harrison, a security expert at CPP said: “It’s something we need to be careful of. If somebody does take a card we need to be watching what they do with it.”

He added that chip and pin machines can easily be fitted with cloning devices but it should also be easy to recognise when a device has been tampered with.

According to research conducted by CPP, nearly one in five consumers have had their card cloned when using either an ATM or chip and pin machine.

The number of fraud and forgery acts committed in England increased dramatically in 1999 when compared against the number of cases during 1993 to 1999.

Tags: United Kingdom, Credit card, fraud, Technology, Payment systems, security, forgery, machines

Are banks playing on the consumer’s conscience?

Over recent months consumers in the UK have been finding more and more services and products that are going ‘green’, enabling them to get the services or products that they need whilst also helping the environment. Read more

Tags: consumer, way, bank accounts, banks, Credit card, green credit card, Payment systems, Credit Cards

Villagers “too rich for ATM”

Residents of a Cornish village have been hit with an unusual banking issue – they are just too rich for a cash point to be installed.

Local MP for Porthleven, Andrew George, has revealed the problem to the West Briton today, after receiving a letter from cash machine supplier Link Interchange Network Ltd.

Mr George said: “I am not sure how the people of Porthleven will react to this news. I’m not sure how [Link] have gathered their data.”

Pointing out the fact that many rich city-dwellers’ holiday homes are in the area, he added that “it may well be that some of this [affluence] is experienced by some residents who do not spend all of their time in the community”.

In the letter, Link Interchange said: “This programme looked at areas which were more than one kilometre from a free ATM (Automated Teller Machine) and which were ranked in the lowest 25 per cent for the Index of Multiple Deprivation.”

Unable to find a sufficiently “deprived” district, they passed on supplying the machine, due to Porthleven’s “relative affluence”.

Mr George told reporters that “some constituents have asked me to make representations to Link to request that they provide free access to cash as otherwise they would have to travel to Helston on what is now a poorer bus service than has been experienced in the past.

“I would be interested to know what local people thought about this.”

Tags: Network, issue, rich city-dwellers, cash point, Index, england, relative affluence".mr george

BRC advises on store cards

The British Retail Consortium (BRC) advised British consumers yesterday that they must decide for themselves as to whether store cards were worth getting.

The credit cards, increasingly popular with UK shoppers, are offered by many large retail chains, such as IKEA, River Island, Mothercare and Debenhams.

Typically, they offer an interest-free period of around 55 days, and discount around 10 per cent from the first purchase.

Set against this is the mounting evidence that store cards consistently charge more interest than is usual. Recent research from consumer website Moneyfacts found that store cards charged 24.3 per cent interest, compared to the overall average APR of 16.7 per cent.

Press officer at the BRC said that the cards “offer a range of benefits to customers, including special promotions for cardholders, discounts and the opportunity to accumulate transaction-based loyalty points”.

He added that “as long as the rate of interest on store card debt is made clear to customers at the outset and there is full transparency of all terms and conditions, consumers are, and should be, able to make the appropriate choice for themselves”.

Tags: Payment systems, outset, cent interest, Consortium, rate of interest

UK consumers struggle to remember pin codes

Research from high street bank Abbey has today revealed that consumers have trouble remembering their pin codes.

Fully 39 per cent of those polled by the card provider said that they write down their numbers so as not to forget them – although a big majority of this group disguised them in some way.

Making records of pin codes makes credit card fraud far more likely, as does making all cards carry the same code, as admitted to by 14 per cent of respondents.

Around 55 per cent admitted to having forgotten a number, with card holders increasingly owning more than one piece of plastic.

The survey found that six million Britons hold three cards, around three million hold four, and two million hold five cards or more.

Steve Shore, head of banking at Abbey, said that with many consumers holding multiple cards, “the challenge of remembering all those PIN codes is getting greater.

“But we really do urge you to try and commit them to memory rather than write them down. Otherwise it’s like signing a blank cheque for fraudsters.”

Tags: piece, card, head of banking, card holders, cent, Payment systems

Where have all the fivers gone?

You may have noticed in recent months that the humble £5 is in short supply.

It may not seem like a particularly pressing issue but the lack of fivers in circulation at the moment is causing a headache for many people.

When it comes to banking, a £5 note can be particularly useful and shoppers in particular like them so that they are not carrying around too much change.

However, the Bank of England claims that it has a large surplus of the notes in storage but is having difficulty dishing them out to banks which prefer not to store them in their ATMs.

Bank of England governor Mervyn King revealed in a speech to City bosses that banks find it more economical to have £10 and £20 notes in their cash machines and this has led to the lifetime of an average £5 note doubling.

He described how many fivers are “noticeably soiled and scruffy” and revealed that he would be seeking urgent talks with banks over the issue.

“There is a need for an adequate supply of low denomination notes that can be used for small transactions where cash is the predominant means of payment,” he said.

“Such mutual convenience is a public good and may not correspond to the private interest of commercial banks.”

Mr King hinted that incentives may need to be put in place so that banks store more £5 notes in their cash machines.

Tags: lack, fivers, urgent talks, low denomination notes, Payment systems, private interest

Holiday card fraud on the rise

Travellers are being warned to be extremely vigilant when using their debit or credit cards abroad as card fraud continues to soar. Read more

Tags: 12 months, Travellers, fraud, Perry Wilson, pin

20yrs of debit cards

Barclays will soon be celebrating 20 years of debit cards after it launched the UK’s first on June 3rd 1987.

The bank broke the mould when it introduced the Barclays Connect card and changed the face of banking forever.

Within nine months of its launch, one million people had a Connect card in their pocket and the debit card has gone from strength to strength ever since.

Today, around 68 million debit cards are in circulation, with many people owning more than one.

A total of 143 debit card purchases are made every second, 6.8 billion transactions take place each year and debit cards out number credit cards.

“Plastic has revolutionised the way people spend money over the last 40 years,” said Brian Cunnington, head of debit cards at Barclays.

“Ever since Barclaycard became the first credit card in Europe in 1966 the nation’s spending habits have changed.

“The introduction of debit cards 20 years later gave consumers even more flexibility allowing them to withdraw cash from ATMs as well as to have payments deducted directly from their current accounts when they paid in shops,” he added.

Debit cards have remained popular through slight changes that keep them up to date, such as the introduction of Chip and PIN technology.

Tags: card, uk, Product Release, Payment systems, money, Banking, banking forever.Within, pin technology

Pay as you go credit card

A prepay credit card is being trialled in Liverpool as the UK tries to tackle the problem of personal debt.

The Bread card, which is provided by Maestro, allows holders to put money onto it in much the same way that you top up a mobile phone.

Purchases can be made on the card, while money can also be withdrawn from ATMs. The key difference, however, is that you cannot get into debt or incur charges because the card will only let you spend what you have topped up.

The card is designed to help those who cannot get a bank account because they have previously handled their finances badly, are foreign nationals or are UK nationals travelling abroad.

“This card will give people the chance to rebuild their credit rating, which is great for those who get into a bit of a mess during their teens and early 20s,” said a spokesman for Bread.

“With such a big focus on Liverpool as the capital of culture, Bread thought the card would be perfect to launch in a city which seems to be growing more rapidly than any other in the UK.”

The scheme is set to begin in March or April and will run for around six months.

Tags: six months, credit rating, bank, key difference, Payment systems, personal finance, spokesman, foreign nationals

Card spending increases

New figures show that we spent a record amount of money on our cards over the Christmas period.

The UK payments association Apacs says that plastic card spending reached £31 billion during December, representing 250 transactions per second.

In all, 669 million plastic card transactions were made, signalling a six per cent increase on the same period in 2005 and highlighting how we are becoming increasingly reliant on card payments.

Despite the positive figures, Apacs has revealed that the vast majority of transactions (63 per cent) involved debit cards, while we spent less on our credit cards.

“The trend that we have seen over recent years of cards replacing cash and cheques on the high street continued this Christmas,” said Sandra Quinn from Apacs.

“Our figures show that cardholders are becoming more responsible in the way that they borrow and are clearly focusing on repayments, with the majority of spending being done by debit rather than credit cards.”

Credit card transactions fell from 205 million in December 2005, to 197 million in 2006.

In total, the amount of money spent on credit cards was just £11.4 billion in 2006, down from the £11.5 billion recorded in 2005.

Tags: Technology, december, card spending, credit, cheques

Financial habits are written in the stars

The time of year in which you were born may be affecting your payment habits and banking behaviour.

Research carried out by the UK payments association (Apacs) takes a light-hearted look at UK consumers’ payment habits according to their star sign.

The survey, which was completed by 2,000 people, found that Capricorns are the most financially astute, but they are let down when it comes to paying their credit card bills.

Scorpios are said to be the sign of the debit card, with the majority showing a strong preference for using this form of payment. In addition, people of this star sign are particularly financially savvy.

Those who fall under the sign of Libra are said to be uninterested in their finances and often fail to pay attention to detail, as well as being slow to check their statements.

“The guide takes a humorous astrological look at our payment habits. However there is a serious point to be made,” said Sandra Quinn, director of communications at Apacs.

“We all need to be conscious of how we are managing our finances – it pays to make sure you are doing it well and there is no better time than at the start of a new year to review things.

Ms Quinn says everyone should check their statements “promptly and thoroughly”, like Virgos, shred their documents when discarding them, unlike Taureans, and have a different pin number for every card owned, something not done by most Leos.

Tags: finances, Credit card, UK payments association, card, Payment systems, payment, Libra, Capricorns

Cash Back or Rewards – What’s Your Preference?

In their bid to retain customers credit card companies have resorted to many different marketing ploys, or ‘incentives’. Cashback cards have proved popular, as have cards offering rewards points. But which is better?

Interesting

The interest on most cards offering cash back is accrued throughout the year and the totals shown on your monthly statement. The annual cashback is then allocated to your account once the twelve months are up.

One exception to this is the EGG card that gives you instant cash back if you visit different stores online such as Virgin wines and ASOS, the online gift and fashion store.

Inspecting the small print

Typical restrictions applied to the annual cashback cards are that it’s restricted to 2% of spend as an introductory offer. You need to look for what it then reduces to as it will go to a lower rate when the honeymoon is over. For example, 1% with the Morgan Stanley card. The American Express Platinum card goes as low as 0.5% on amounts up to £3,000, but fortunately increases to 1% on spend between £3,000 – £7,500 and 2% on spend in excess of £7,501.

So, that’s one card where the cashback is clearly designed to encourage you to spend, spend, spend!

Robbing Peter to pay Paul – the annual fee

Although there are less of them around these days it’s always worth remembering to check whether you cashback card charges you an annual fee. If it does, get rid of it. There is no point in giving the company money on the one hand only to receive some back on the other. You can do better.

Is it worth it?

An example of the value of a cashback card being reduced is the HSBC Platinum Visa card, which charges a £35 annual fee. The cashback vouchers are worth 44p for every £100 spent, so that means you would have to spend £8,000 to actually earn cashback in real terms.

No small change

Averaged out over the year that HSBC card spend would be only £666.67 each month. But if you put £1,000 on the card and pay it off each month so you don’t get charged interest, that would mean you have the grand sum of very roughly £17.50 cashback for the year’s spend.

You can see why the card companies are keen to use the cashback incentive.

So what about reward schemes?

Reward schemes usually offer points that can then be redeemed against goods, usually only from selected outlets.

The Goldfish card has proved to be one of Britain’s most popular credit cards, helped largely by a well targeted and conceived Television advertising campaign featuring Billy Connolly.

A million people can’t be wrong, can they?

There are over a million customers with Goldfish cards and every pound you spend online or in the high street with your golden friend will earn points that can be redeemed at popular shops such as John Lewis, Marks and Spencer, Asda, Dixons, Boots, and WH Smith and many, many more.

Come fly with me

Air Miles has proved a very popular incentive scheme and is offered by several different card providers, including the illustrious Coutts and Co. Air Miles credit gives one Air Miles point for every £20 spend and as much as one point for every £5 spent at a participating Air Miles Travel Agency. So they can mount up.

I’m Morgan Stanley fly me

Morgan Stanley are an investment Bank, so if you are a high earning individual or couple, then you could benefit from the travel and holiday offers associated with one of their cards. Collect points on your card and if you spend £25,000 you will have earned enough points to fly from London to New York return.

General Motors

The GM card gives users rebate points at 3% of spend towards money off a new Vauxhall or Saab car. They even offer 100 free rebate points for the first time you use your card and that provides you with the instant equivalent of £100 off that shiny new motor!

Which type of card?

As with all these decisions it really comes down to how you use your card and your own particular lifestyle as to which one you should choose. Bear in mind that card reward schemes in general have been heavily criticised by Which? magazine in the past because they don’t offer very good value for money.

The choice is yours

In general cashback schemes offer more flexibility for the consumer to buy what they want, but if you have a particular lifestyle then you may well see a credit card provider with a particular offer to suit that lifestyle, like the GM card or the Suite card which offers points redeemable at over 16,000 hotels around the world.

Ultimately, the choice is yours.

Tags: Suite card, goldfish cards, Morgan Stanley, annual cashback cards, Collect points, Miles Travel Agency, money, Payment systems

Should I Open A Business Account?

Good to do business

If you are self employed you will either be a sole trader, (somebody who works on their own), or you will be running a small company. If you are the latter the likelihood is you will be a limited company and will probably have a business account for all your transactions. But as a sole trader, should you open a business account? Read more

Tags: t/a palmer plumbing, business banking, business accounts, self employed, trading as