Credit Card Guidetag:www.cardguide.co.uk,2008://12008-04-28T06:45:44ZMovable Type 3.32Credit crunch has minimal impact on credit card transferstag:www.cardguide.co.uk,2008://1.1622008-04-28T06:43:04Z2008-04-28T06:45:44ZAccording to a recent report the global credit crunch, which has resulted in severe problems in the UK money markets, has not had that much of an effect on the level of credit card transfers. The report shows that every...
The data shows that many people who are struggling with higher interest debts such as those on standard credit cards are now trying to reduce their outgoings by transferring to a low interest or 0% interest balance transfer card. However, research also shows that many may now find this process difficult or even impossible, as many credit card providers have severely restricted lending in light of the credit problems, and have really tightened up on their lending criteria.
One official involved in the research stated: 'There is a significant market for cards offering balance transfers as our research indicates that 40% of card holders think it will take longer than one month to clear their current balance.' The study involved surveying around one thousand people. It found that whilst the average amount being transferred to another card was around £1555, there were some consumers that were transferring over £4000.
Whilst consumers that transfer balances from higher interest credit cards onto a 0% balance transfer card can save on interest, they should be mindful that there is a 2-3% transfer fee to pay in most cases, and also that availability of these cards is vastly reduced compared to a year ago, which means some may find that they cannot get a transfer card.
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Credit card providers luring customers into borrowingtag:www.cardguide.co.uk,2008://1.1612008-04-19T09:49:06Z2008-04-19T09:50:47ZAccording to a recent report credit card providers in the UK have been verbally attacked by officials from the Conservative Party, after accusation that the card providers are trying to lure consumers into borrowing money, thus adding to the already...
The Shadow Business Secretary, Alan Duncan, stated that with offer like this borrowers are eventually left to try and pay back interest that they simply cannot afford. He added that once customers hit problems where they could not afford repayments and interest the credit card companies were likely to simply 'spit them out'.
Mr Duncan said that lenders had to try and realise the human misery that this sort of situation was resulting in, and added that this was not acceptable practice. He said that what many card providers were doing amounted to no more than irresponsible lending, describing it as 'corporate irresponsibility.'
However, despite these comments many card providers have been rejecting an increasing level of applications, and some have cut credit limits or even withdrawn credit card facilities for those that consider to be high risk.
The MP also said that if the Conservative Party gets into power then this situation is likely to change. In the meantime debt charity officials have urged struggling borrowers to consider a debt management plan, and certainly to seek financial advice from a debt charity or the Citizen's Advice Bureau, if they are struggling to keep up with their debt repayments on credit cards or other forms of finance.
Tom Smith
19th April 2008]]>
Consumers outraged by credit card cutstag:www.cardguide.co.uk,2008://1.1602008-03-25T16:52:07Z2008-03-25T16:54:44ZMany credit card customers have been outraged after discovering that their credit card providers have slashed their credit limits without any warning. As part of a nationwide operation many credit card firms are trying to cull credit limits in the...
As part of a nationwide operation many credit card firms are trying to cull credit limits in the wake of the global credit crunch, and as a result of this many customers have seen their credit limit slashed to just £100 above their existing balance. No prior warning was given about the credit limit cuts, which has left many cardholders feeling angry and humiliated after trying to use their cards.
One solicitor who had his limit cut from £5000 to £700 said: 'I had to endure the humiliation of having it declined twice in B&Q. There was a long queue behind, I was embarrassed, but luckily had other cards with which to pay it. I have had the card for 10 years and, surprise, surprise, I've never missed a payment and always paid off the balance at the end of the month. But what really made me angry was that after I asked them why they didn't give me some notice, they said that if they did that, I could just rush out and spend wildly in an effort to keep my balance up. I found that incredibly insulting.'
Although the process has been used by a number of different banks, all have used the same procedure of cutting the limit to £100 over the existing balance. Banking officials stated that the reason that customers were not informed of the move was because they would have then had the opportunity to go out and spend on the card in order to increase their existing balance, and subsequently increase their credit limit.
Many of the customers that have been affected by the move have stated that they have good credit and have not missed repayments, as was the case with many of the Egg customers that recently had their credit card facilities withdrawn.
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Credit crunch does not stop credit card addictstag:www.cardguide.co.uk,2008://1.1592008-03-21T07:09:50Z2008-03-21T07:21:28ZAccording to a recent report over three millions Brits are juggling five or more credit cards, and although the credit crunch has hit hard over recent months many are continuing to spend, spend, spend on their cards, accruing high levels...
Research suggests that many Brits are still spending way above their means via the use of multiple credit cards, and in an increasingly volatile economic climate are continuing to build up huge levels of debt. In the past year along one third of Brits have applied for another credit card, although many may have faced increased difficulties over recent months as a result of the global credit crunch, which had resulted in tighter lending conditions.
One industry professional expressed concern over the way in which many people are using and abusing credit cards, resulting to increased debt and financial problems rather than the ease, convenience, and flexibility that credit cards are designed to offer. He said: 'It is entirely healthy if people are swapping debts from one card to another, taking advantage of 0% deals to ensure that they pay as little interest as possible. But anyone who is trying to juggle five or more credit cards and owes money on all of them is in real trouble.'
This information comes at a time when experts have predicted that an increasing number of people are likely to become insolvent due to debts and unmanageable financial commitments, and at a time when many are already struggling with financial woes, such as increased energy bills, higher food and petrol costs, and higher mortgage repayments.
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Clear your credit card balance quickly and enjoy a fee free transfertag:www.cardguide.co.uk,2008://1.1582008-03-12T04:42:59Z2008-03-12T04:45:55ZCustomers that want to transfer high interest credit card balances onto a 0% balance transfer card could benefit from paying no transfer fee if they are able to repay the balance within six months. Qualifying customers that are able to...
0% balance transfer credit card that has been launched by Capital One.
Most balance transfer credit cards charge a 2-3% transfer fee based on the amount being transferred in total, but many offer long 0% periods with some offering up to fifteen months. However, the Capital One card offers just six months of interest free credit on balance transfers, but for those who can repay the balance within this time this card could prove very effective because there is no transfer fee to pay.
Consumers that want to take advantage of the Capital One offer will need to meet the eligibility requirements, and this means having a good credit history, which is required for most balance transfer cards.
One industry official stated: 'Balance transfer fees have increased with many being uncapped, lenders have tightened up their credit scoring criteria, so you need almost spotless credit history to get your hands on one of these deals. If you do, the interest free limits will be smaller than they used to be.'
After the initial six month interest free period any remaining balance will be charged at the lender's standard variable rate. Consumers need to weigh up whether they can repay the balance within the six months, or if not whether it will be more cost effective to pay the transfer fee and transfer to a card that offers a longer interest free period.
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What to look for with 0% balance transfer cardstag:www.cardguide.co.uk,2008://1.1572008-03-10T06:43:11Z2008-03-10T06:45:34ZFor many credit card users in the UK, 0% balance transfer credit cards have become an effective way to save money on interest and enjoy more affordable credit card spending. The purpose of the 0% balance transfer card is to...
0% balance transfer credit cards have become an effective way to save money on interest and enjoy more affordable credit card spending. The purpose of the 0% balance transfer card is to enable cardholders with high interest credit cards to transfer the balances from their higher interest credit cards onto the 0% balance transfer card, and then enjoy a period of interest free credit within which to repay the balance without being charged any interest.
Using 0% balance transfers is simple and convenient, as you can get the new credit card provider to transfer your old credit card balances for you, so you will not have to go to any trouble. If you are paying a high level of interest on your current credit card debts then transferring to a 0% balance transfer card could make a big difference to the amount that you end up paying on your total debts. However, although there are many benefits when it comes to a 0% balance transfer card there are also things that you need to look out for.
One of the things that you need to keep your eye on with a 0% balance transfer credit card is the transfer fee that is charged by the credit card provider. Most credit card providers will charge a transfer fee of between 2-3% of the total amount that you are transferring onto the card, and this means that the more you are transferring the more you will pay. Some cards have a minimum and maximum transfer fee limit, and you should check to see what these are.
The transfer fee charged can vary from one credit card to another so it is important that you compare a number of 0% credit cards in order to find a transfer card that charges a fee that is not too high, otherwise you may find that you are paying a fortune in order to transfer your balance. However, you need to also take into consideration how long an interest free period is on offer from the credit card provider, so you need to balance both factors in order to get the card that best suits your needs and your pocket.
Another thing that you need to look out for with these credit cards it the tempting offers that credit card providers may through at you also offering a number of months' interest free credit on purchases. However, do not get fooled by this debt trap, as the purchase interest free period is usually far shorter than the interest free period on the transferred balance, and this means that your purchase balance will get trapped behind the transferred balance where it will start to accrue interest once the 0% period on purchases is over.
In the meantime any repayment that you make will be applied to the interest free transferred balance, which will leave your purchase balance trapped for even longer, where it will accrue even more by way of interest.
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Travel rewards and air miles credit cardstag:www.cardguide.co.uk,2008://1.1562008-03-08T04:58:42Z2008-03-08T05:02:45ZThere are many different types of rewards based credit cards around these days, and this includes cash back cards, discount cards, loyalty point cards, and more. For those that enjoy travelling there are two types of rewards based cards that...
cash back cards, discount cards, loyalty point cards, and more. For those that enjoy travelling there are two types of rewards based cards that could prove very useful, and these are travel rewards credit cards and air miles credit cards. Although both offer rewards relating to travel services it is important that you base your choice on the type of travel and travel services that you use.
For those that tend to travel by air a lot, an air miles credit card may prove the most effective. With an air miles credit card you can earn miles for every pound that you spend on the card, and although the level of points earned per pound spent is low you can also add to your balance with bonus points and special offers. The number of points awarded can vary from one card provider to another. Once you have enough points you can redeem them against flights, although there are restrictions in place so you need to make sure that you read the small print.
If you enjoy travelling but do not tend to travel by air so much – for instance if you tend to travel within the UK – you will fare better with a travel rewards based credit card. This is different to an air miles card in that you receive points for each pound that you spend on the card, and these points can be redeemed against a range of travel services, such as hotel stays, car hire, ground transport, package holidays, and more.
As with the air miles card, the number of points that you earn per pound spent on the travel rewards credit card will be quite low, and again can vary from one provider to another. With both of these credit cards you should make sure that you compare a range of cards from a number of providers in order to find ones that offer a generous level of points or miles per pound spent, and even to find ones that offer bonus points or miles when you open your account or at specified intervals.
You should remember that, as with any rewards based credit card, you will not earn anything for cash transactions or withdrawals that are made on the card, and therefore you should try and limit your use of these cards to making purchases. You should also make sure that you repay the balance in full each month so that you avoid any interest charges, as paying interest will counteract any benefit that you receive from your points or air miles.
The best way to benefit from air miles and travel rewards credit cards is to use your card regularly, thus maximising on the rewards that you earn, repay the balance in full each month, thus avoiding any interest charges, and avoiding any cash transactions or withdrawals, thus avoiding costly fees and missed rewards.
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Credit card companies try to cull limitstag:www.cardguide.co.uk,2008://1.1552008-03-06T10:54:51Z2008-03-06T10:59:04ZA recent report has shown how the credit card industry appears to by trying to cull spending limits on credit cards, shocking cardholders by announcing a dramatic drop in their credit limit out of the blue. The report claims that...
credit cards, shocking cardholders by announcing a dramatic drop in their credit limit out of the blue. The report claims that many credit card customers, many of whom have very good credit, have seen their spending limits cut to £100 of their existing balance for no apparent reason.
It is further claimed that the customers were not actually told about the cut until it had been applied to the account, as credit card companies were concerned that if the consumer knew beforehand they would spend on the card so that their existing balance was higher. Consumers are now outraged after trying to make purchases on their cards before they were aware that the spending limit had been cut, and being humiliated because the transactions would not go through.
The customers that have been affected are from a number of different banks, but the same process if slashing the limit to just £100 above the existing limit has been applied. Those affected claim that their credit is perfect, just as many of the customers who had their credit cards withdrawn by Egg had stated that they did not have any problems with their credit.
One solicitor who had his credit card limit slashed from nearly £5000 to just £700 said: 'I had to endure the humiliation of having it declined twice in B&Q. There was a long queue behind, I was embarrassed, but luckily had other cards with which to pay it. I have had the card for 10 years and, surprise, surprise, I've never missed a payment and always paid off the balance at the end of the month. But what really made me angry was that after I asked them why they didn't give me some notice, they said that if they did that, I could just rush out and spend wildly in an effort to keep my balance up. I found that incredibly insulting.'
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Egg refuses to back downtag:www.cardguide.co.uk,2008://1.1542008-03-03T03:13:07Z2008-03-03T04:17:16ZFollowing a meeting between the Chief Executive of Internet financial giant Egg, Ian Kerr, and the former consumer affairs minister and Labour MP, Nigel Griffiths, it seems that there will be no apology and no u-turn with regards to the...
However, Egg is refusing to back down over its decision. The move to cancel the credit cards came after Egg was taken over by Citibank, and over two million credit card accounts were reviewed. The bank claimed that it was cancelling the cards of 161,000 customers because they posed a high risk either now or in the future, but many people have accused the bank of closing the account of good payers because they were not making enough profit from them.
An official from Egg stated: "The review was based upon a large number of variables and studied the level of risk inherent in groups of customers, rather then every individual. So while some customers in that group may be up to date with their payments and have a good record with credit reference agencies and so on, the probability of them becoming a higher-risk customer in the future is higher than we wish to accept."
Speaking of the recent meeting, Mr Griffiths stated: "I expressed my strong concerns about the letters sent to customers, particularly since I felt that more information could have been provided. I have received an assurance that Egg will ensure that the credit record of these card-holders will not be affected, as long as they keep up their agreed repayments."
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Customer hit by huge fees on 0% balance transfer cardtag:www.cardguide.co.uk,2008://1.1532008-03-02T07:20:42Z2008-03-02T07:25:54ZA customer has explained how he was hit by huge fees by MBNA on his 0% balance transfer credit card as a result of a small oversight. Thirty nine year old Paul Williams took out a 0% balance transfer credit...
With 0% balance transfer credit cards consumers are hit with transfer fees of between 2-3% of the total transferred balance. However, many still decide to take up the 0% offer in order to save on interest charges, which is what Mr Williams did when he took out the card, which offered 12 months interest free credit on balance transfers. However, due to strict rules that were buried in the small print the card ended up costing Mr Williams a small fortune.
After taking out the card Mr Williams said he set up a direct debit for the £5 minimum payments that the bank was asking for. However, after the bank changed this to £10 Mr Williams did not realise and therefore underpaid due to his £5 direct debit. As a result he was charges £12 by the card provider and had his 0% facility withdrawn, leaving him with a bill for £170 to cover the interest on his balance.
After some arguments MBNA did refund his interest and reinstate his 0% status. Mr Williams stated: 'I was shocked and stunned when this happened. I put my hands up that I made a mistake, but to ruthlessly withdraw my 0% rate and charge me interest at the full rate because of one basic error is harsh.'
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Caps on balance transfer cards disappearingtag:www.cardguide.co.uk,2008://1.1522008-03-01T05:11:50Z2008-03-01T05:14:33ZAccording to a recent report the number of 0% balance transfer cards that cap the transfer fee at a set amount are is falling, which means that an increasing number of people that transfer high interest balances on to 0%...
The vast majority of 0% balance transfer cards charge a transfer fee, usually of 2-3% of the total balance being transferred, but in many cases providers were capping the maximum fee at around £50.
However, even this area of the financial sector has been affected by the financial turmoil in the money markets, and this has resulted in a drop in the number of card providers that cap the balance transfer fee, which means that for some people that are transferring large sums of cash the cost of the transfer could prove crippling.
This move could put an end to rate tarting, where cardholders continually transfer balances from card to card in order to avoid paying interest, as the cost of making these transfers could counteract the benefits of avoiding interest.
According to financial experts there were eighteen different credit cards that were available with capped transfer fees one year ago, but this has now fallen to just seven cards from five different providers.
Although the number of cards that caps transfer fees has fallen officials still state that some consumers should try and look for one of the ones that does still offer caps on these fees.
One industry professional stated: 'In the past, the simple advice for rate tarts was to look for a 0% deal, and then for a card with low balance transfer fees. Now however with the majority of long term 0% credit cards charging 2-3% for a balance transfer, getting a card that caps its fees might be a sensible option if you don't like the look of one with no fee at all.'
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Man threatens court action over withdrawn store card pointstag:www.cardguide.co.uk,2008://1.1512008-02-25T03:50:45Z2008-02-25T03:54:50ZA man has threatened to take court action after his rewards scheme cards were cancelled by a supermarket giant. The man from Bedfordshire said he had accrued points to the value of thousands of pounds, but that the supermarket giant...
According to reports the customers was often finding bargain goods prices at just a couple of pounds, earning points that sometimes amounts to £40, and then selling the goods at car boot sales.
He said: "I have spent the money and I have earned the points. The points were awarded and now they have been taken away, I think unfairly and unjustly, and there's no reason why Tesco should withhold the points from me. I have paid the money and they should keep their end of the bargain and give me the points."
However, Tesco stated that the man abused the scheme, adding: "His actions are a clear violation of the spirit and the letter of the agreement. It's unfortunate that he is attempting to portray himself as a victim of corporate bureaucracy. If anything he's a victim of his own abuse of the scheme."
One industry official stated: "I do not think enough of us read the small-print. If you read the small-print for the Tesco Club Card, it states very clearly that the company can withdraw the Club Card from any customer it wishes at any time without having to give any reason. I find this a little bit on the frightening side, because many people will accrue these points over a long period of time in the hope that they will be able to splash out at Christmas."
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What’s going on with the Egg card?tag:www.cardguide.co.uk,2008://1.1502008-02-19T09:26:27Z2008-02-19T09:34:43Z
credit cards, and with the credit crunch making it increasingly difficult for consumers to get credit with other lenders, this has left many of those on Egg’s ‘hit list’ in the lurch, and many have expressed their outrage at Egg’s decision to cancel these credit cards for no good reason.
Egg officials have decided that around 160,000 credit card accounts are going to be cancelled, and cardholders that are on the list will find that their cards stop working in a little over one month. According to Egg the people that have been put on the hit list are those whose credit ratings have fallen or deteriorated since they opened their credit cards accounts, but many of those that have been informed that their cards are being cancelled insist that their credit rating has not deteriorated, and that they actually have excellent credit.
One official from Egg commented on the situation after outraged customers flooded news sites and the lender with complaints. He official said that Egg had made the decision to cancel the credit cards of those that it deemed no longer suitable to lend to. He added that this was regardless of their credit status, which seems to contradict the lender’s earlier statement that the account closure was targeted at those whose credit ratings had actually declined since they took out their cards.
Some of the people that have been affected by the credit card account closure have been left bewildered, because they have stated that their credit rating is excellent, has not deteriorated since they opened their Egg credit card accounts, but they are still being penalised by the credit card issuer along with those whose credit ratings have fallen since their accounts have opened.
Although it is little consolidation to those who have had their credit cards cancelled without any real explanation Egg has stated that it is not demanding that the balance on the credit cards be repaid in full right away. Customers that have been affected by the account closures will still be able to make minimum repayments on their balance, or can pay more each month if they wish, in the usual way, in order to get their balance cleared. However, after the expiry of the card in just over a month these customers will no longer be able to run up any more debt on the cards, and once their balance has been cleared the account will then be defunct.
Many lenders including credit card companies have had to increase stringency when it comes to lending as a result of the financial turmoil caused by the credit crunch. However, whilst Egg cheerfully informs confused customers that they can no longer have credit the lender still continues to put out glossy advertisement on television touting for more business for its credit card division.
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No move to investigate Egg credit card cancellationtag:www.cardguide.co.uk,2008://1.1492008-02-16T06:47:27Z2008-02-16T06:49:38ZAccording to a recent report there has been no official complaint lodged that would result in an investigation being launched into the recent decision of lending giant Egg to cancel the credit cards of 160,000 of its customers. The lending...
The lending giant recently announced that the credit card accounts of around 160,000 customers would become defunct over the coming weeks, and those affected would no longer be able to use their credit cards other than to make repayments on the balance.
Customers were told that their cards would stop working in 35 days following the announcement, and Egg officials stated that the customers on the hit list were those whose credit ratings had fallen since they opened their Egg credit card accounts. MPs have now called for an investigation to be launched into the shock move by Egg, but the Office of Fair Trading has stated that an official complaint will need to be filed before an investigation can be considered.
Following the announcement about the credit card withdrawals Egg issued a statement: "We are sorry some customers are upset after receiving notification we are ending their credit card arrangement, but they are people we do not feel it is appropriate to lend any money to. We can certainly understand the concerns, but even if people are up-to-date with repayments, they are people we decided we no longer wish to lend money to regardless of their status."
One customer expressed his shock at being told his account was being cancelled. He said: "As a 32-year-old earning £35,000 a year with an excellent credit rating, and an Egg customer for five years who has never missed a payment - repaying over £7,000, I was shocked when I received a letter saying my account was being cancelled."
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Egg credit card cancellation chaostag:www.cardguide.co.uk,2008://1.1482008-02-13T08:45:16Z2008-02-13T08:47:00ZBanking giant Egg has found itself at the centre of consumer outrage after it announced a decision to cancel the credit cards of over 160,000 customers. Egg has decided that it is going to cancel the cards of customers whose...
The cards of customers who have been affected will stop working in just over one month's time according to reports.
However, there has been outrage from customers that say that they have been affected by the decision despite the fact that they have good credit and their credit has not deteriorated since they opened their accounts.
The Financial Services Authority has now been asked to investigate the matter by a labour MP following the announcement. Former deputy leader of the House of Commons, Nigel Griffiths, has described the actions of Egg as unacceptable.
An Egg official stated that it no longer wanted to lend to those customers on the list, adding that this was "regardless of their current status".
Around 7% of Egg's customers have been affected by the decision after being classed as 'high risk' by the lender. Affected customers will no longer be able to spend on their cards once the deadline is over, although they can still make minimum repayments on the card.
An official from Egg stated: "We are sorry some customers are upset after receiving notification we are ending their credit card arrangement, but they are people we do not feel it is appropriate to lend any money to."
He added: "The decision was taken after an extensive one-off review of our credit card book following acquisition by Citigroup."