Prepaid currency cards “more competitive” than credit cards

Holidaymakers are likely to favour prepaid currency cards over traditional travellers’ cheques, according to industry experts.

The currency cards are on offer from the Post Office, Barclay’s and Lloyds TSB and allow travellers to withdraw cash abroad. Travellers load the currency they need on to the card before setting off on their holiday.

Moneysupermarket.com explains that currency cards have the edge on credit cards because there are no fees for transactions. They can also be used by individuals who have difficulties acquiring credit.

Steve Willey, of Moneysupermarket.com, said: “In terms of their use, effectively they’re a traveller’s cheque replacement.

“Once people have got comfortable with the concept and realise that there are savings to be made, then I think this will become just ‘the way to do things’.”

Travellers are also protected against fraud because the card is frozen if it is stolen and the balance and card holder’s details remain protected.

Last year statistics from APACs revealed an increase of 77 per cent of fraud associated with cards stolen abroad.

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Consumers need to spend carefully at Christmas

Consumers should be careful with their Christmas spending and ensure they do not put more than they can afford to pay back on credit, warn financial experts.

The Consumer Credit Counselling Service has said, that despite it being the festive season, people still need to remember that money spent on credit has to be repaid over the course of the year.

James Ketchell, spokesperson for CCCS, said: “The amounts you put on for Christmas spending might be done in good faith and for good reasons, but they do have to be measured by common sense too.”

CreditExpert.co.uk has predicted that, despite recent interest rates rises and the credit crunch, the majority of Christmas consumers will not be reducing their spending.

The news comes even though 29 per cent of respondents admit money is tighter this year.

According to statistics from Credit Action, the total personal UK debt stood at £1,380 billion at the end of September.

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Mortgage lending on the rise

Figures released by the British Banking Association (BBA) show that mortgage lending has reached a total of £21.3 billion in July, an increase of 12 per cent on last years’ figures.

The average mortgage loan rose to £156,900 in July, which is a rise of 13 per cent from July 2006.

Net mortgage lending growth rose to £5.7 billion, with unsecured lending rising to £200 million.

BBA head of statistics, David Dooks, said: “With customers seeking to replace deals or fix their mortgage costs, increased remortgaging activity boosted the banks’ lending in July.

“Lower approvals volumes simply reflected the seasonal pattern, so we expect the stable trend in the banks’ lending to continue over the next couple of months.”

Building society lending is not included in the figures – which reflect higher overall levels of remortgaging activity.

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Britons lack financial education

We are not receiving enough education about our finances and this is leading to problems in later life.

That is according to the ifs School of Finance which is highlighting the problem as part of Credit Awareness Week (CAW).

The financial education charity is keen to promote the importance of learning about money so that we all perform better when it comes to banking.

New figures, released by Credit Expert, have shown that 80 per cent of us regularly overspend and many of us have already considered declaring ourselves bankrupt.

The research found that nine per cent of us have taken out a credit card to pay off the debt on another card, while ten per cent have missed payments on loans, mortgages and cards.

It is statistics such as these that experts say show just how financially unaware many Britons are.

“What this research seems to expose is a serious lack of understanding of the long-term consequences of these actions and how it can affect your credit rating – ultimately impacting your financial future,” said Credit Expert’s managing director Jim Hodgkins.

“We feel it’s imperative that people fully realise the implications of not managing their finances properly.”

The ifs School of Finance is pushing the government to include a GCSE in the national curriculum that focuses on money and how to handle it properly.

Tags: Credit Awareness Week, education charity, finances properly."The ifs, cards, financial future, statistics, Expert's managing director, director jim