Payday loan repayment delays can lead to hefty charges

According to a recent report there are now many people who take out payday loans in order to bridge the gap between paydays. With the cost of living soaring, petrol prices having rocketed, bills going up, and food costing much more, many people are now struggling to make ends meet financially and their wages are simply not lasting for the whole month, leaving them short of cash part way through the month when the next payday is still a long way off.

As a result of this, more and more people have found themselves in a situation where they have had to borrow money in order to make ends meet and for some this is becoming a regular occurrence. Whilst some people are turning to family members and friends in order to secure this finance to tide them over others are turning to lenders, with many opting for payday loans because they are quick to process, require no credit checks, allow consumers to borrow modest amounts of money for short periods of time, and offer a fixed fee.

However, whilst some people have found these payday loans to be a financial lifeline in a very difficult climate, industry experts are warning that the cost of borrowing can increase even further with these payday loans if they are not repaid on time. The interest rates charges are already extortionate on these loans, although many customers do not realise this because they are borrowing the money for such a short period of time.

One financial industry professional said: “There is a real danger that customers could fall into a spiral of debt where they have to take out a loan each month just to make ends meets. The golden rule is not to borrow money unless it is absolutely necessary.”

Tags: short periods, personal finance, result, order, tide, Payday loan repayment, credit checks, customers

Will you get through the recession?

With the recession underway in the UK many people are worried with regards to whether they will stay afloat financially. With living costs having rocketed over the past year, and the effects of the global credit crunch still affecting households, many people have been unable to put aside money in savings to try and get them through these difficult times, which is a fact that has caused grave concern amongst many. However, there are some tips and hints that could help you to get through this period. Read more

Tags: price, cheaper provider, tide, staffing, action, while, recession, best account

Tide turns on fixed rates, according to GMAC-RFC

Mortgage lender GMAC-RFC predicted a shift back towards customer preference for alternative mortgages such as tracker mortgage and discount deals in the coming year.

The provider claims that fixed-rate deals are “already priced high” in preparation for further interest rate increases, which might lead to customers to change to other options

Consumers are fearful of rising interest rates, meaning big rate hikes on variable mortgages.

Julie Gaskin, corporate relations manager at GMAC-RFC conceded that “in a rate-rising environment it often makes sense for borrowers to take out a fixed-rate deal”, but argued that “the tide is now turning, as [fixed-rate deals] are factoring in for one or more future rate rises, making tracker and discounted deals look increasingly attractive, and in many cases cheaper”.

“Now is the time for intermediaries to harness the change and look towards tracker and discounted products to drive business growth as demand for this type of product will inevitably increase in the foreseeable future. Those that shy away from this may be missing a trick with consumer hungry for a good deal”, she added.

Latest figures from the Council of Mortgage Lenders (CML) show around 75 per cent of new mortgage loans being fixed-rate deals.

Tags: mortgage lenders, foreseeable future, mortgage lender, rising interest rates, rate deals, tide, good deal, demand

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