Personal Finance Blog

Don’t leave your finances out in the cold this Christmas

With Christmas just around the corner, moneysupermarket.com has offered ‘ten top tips’ for those who are looking to reduce spending over the festive season.

1.       Consumers should refrain from taking out store cards, despite incentives such as immediate discounts or money back, as interest rates are not likely to be competitive.

2.       Supermarket credit cards, which are linked to loyalty schemes, are competitive and can offer good value.

3.       If savings are not available and it is necessary to borrow the funds required, consumers could investigate credit cards with zero percent interest on purchases.  However, consumers should be sure that the sum borrowed is appropriate to their individual circumstances and that it can be repaid within the introductory period.

4.       By taking out a cashback credit card at the beginning of the year, consumers could save up for next Christmas with the money that is received from each purchase made with it.

5.       Before taking out a loan during the run up to Christmas, consumers should shop around for the best deal that is most suitable for their circumstances.

6.       Consumers should be aware of savings clubs that lock cash away throughout the year to provide shopping vouchers at Christmas.  When embarking upon such a scheme, consumers are forfeiting interest payments and could even be charged high prices for the goods that they purchase with their vouchers.

7.       Consumers should not make impulse purchases; instead they should do some online research to bag a bargain.

8.       The internet can also be used to find and download vouchers and discount codes, which could prove beneficial when Christmas shopping.

9.       Consumers should work out what they need to buy and what they can afford to buy, in order to set a budget.  Sticking to this budget should then remove the possibility of getting carried away and starting the New Year in the red.

10.   Individuals who are borrowing money to finance this Christmas should set up a regular savers account at the start of 2010 in preparation for next Christmas.

Head of banking at moneysupermarket.com, Kevin Mountford, commented: “Christmas can be a difficult time of year financially and the current economic climate is not making things any easier.  Although there are a few options to spread the financial load at Christmas, the ideal time to start preparing is January.  Preparation is the key to a hassle free festive season and savvy consumers with savings will be able to start the New Year without the burden of a Christmas – debt hanging over them.”

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Homeowners who have taken out several credit cards over the years, and now face an array of  repayments each month, could consider tying these up with a secured loan.  One of many finance options available, a secured loan for debt consolidation could leave the borrower with just one monthly repayment.  Furthermore, this single monthly repayment could even be lower than existing outgoings – thus freeing up extra money each month, which could potentially be entered into a savings account. However, when taking out a debt consolidation loan, it must be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.

Posted in Debt Consolidation |

The £50.1 billion secret

According to new research conducted by AXA, 24 percent of UK adults are hiding some form of debt from their partner or family.  This equates to 12.2 million people who are concealing debts such as overdrafts and credit cards.  On the basis that the average value of hidden debt is £4096.32, this indicates that there may be a total of £50.1 billion nationwide.

The research also revealed that the state of finances is third on the list of things that UK adults lie about.  Ranking more highly was the number of previous partners and the amount of money spent on an item of shopping.  It was found that 40 percent of people will tell their friends, family and partner lies regarding their finances.  At 44 percent, the research showed that those between 19 and 30 years of age are most likely to do so.  The same group is also reported to have the greatest level of concealed debt at 26 percent.  However, the greatest sum of concealed debt was discovered amid those between 36 and 40 years of age at £5883.80, and those between 46 and 50 years of age at £5880.47.

Further findings included that women are most inclined to tell lies surrounding shoes and shopping at 24 percent, and men are most inclined to lie about the amount of drink consumed at 24 percent.  An additional 22 percent are reportedly likely to lie about the condition of their health.

In relation to the reasons behind financial lies, the research showed that 31 percent are embarrassed by their debts, whilst 23 percent are fearful of how people would react.  For 21 percent, they are hiding their debts because they have spiralled out of control, and 14 percent did not realise the extent of their debts.

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Homeowners who have multiple credit cards, store cards and hire purchase agreements, could consider taking out a secured loan to re-organise their finances.  One of many finance options available, a secured loan for debt consolidation could lessen juggling multiple monthly repayments.  By tying them all up in one place, the borrower could be left with a single monthly repayment which could potentially be lower than current outgoings.  However, if opting for a secured loan to consolidate debt, it should be remembered that consolidating debt may increase the amount paid back overall and will also extend the repayment period of debts.

Posted in Debt Consolidation |

Credit card confidence amid the early 50’s

According to new research by Confused.com, 77 percent of those in their early 50’s are not concerned about the possibility of having their credit card applications turned down.  Their confidence is so great in fact, that 83 percent of individuals within this group have not checked their credit score for at least 12 months.

In contrast, it was found that 34 percent of those in their early 20’s are either refused credit immediately or following a referral.  Confused.com points out that this could be the reason why virtually half of individuals in their early 20s do not submit credit card applications for fear of refusal or a ‘black mark’ against their name.

Head of credit cards at Confused.com, Joanne Garcia, commented: “Our research highlights the different spending habits between age groups.  Approaches and attitudes differ, however the recognition in clearing credit balances must remain consistent.  Those with existing balances should make every effort to clear them as soon as possible.  Ignoring the debt, resulting in closure of an account by the credit card company is not advisable.  This will have an adverse affect on a person’s credit rating that will remain with them for a long time, creating difficulties for a range of things in the future.”

The research revealed that one in three individuals between 46 and 50 years of age do not maintain regular repayments on outstanding credit card balances.  Consequently, Confused.com is urging those within this category to find a solution.

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Homeowners who have accumulated several credit cards in the past could consider tying these up with a secured loan for debt consolidation.  One of many finance options available, a secured loan for debt consolidation could leave the borrower with just one monthly repayment as opposed to juggling several.  Furthermore, this single monthly repayment could even be lower than current outgoings – thus freeing up useful money each month.  However, when taking out a debt consolidation loan, it must be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.

Posted in Debt Consolidation |

Christmas on the cards

According to research conducted by moneysupermarket.com, 31 percent of credits card users do not intend to settle their outstanding balance during the course of the next six months.  It was also revealed that those between the ages of 20 and 29 are the least likely to clear their debts in the near future.  In fact, 38 percent of credit card users within this age bracket have reportedly had an outstanding balance for over six months, and just 26 percent are paying off their total balance each month.

With the Christmas period looming, moneysupermarket.com points out that credit card purchases could cost far more than anticipated.  For example, a £2,000 balance at an average industry rate of 18.21 percent APR, with repayments divided equally across six months, would result in interest of £144.19.  This figure would rise to £188.79 over a period of twelve months.

Credit cards expert at moneysupermarket.com, Peter Harrison, commented: “Today’s news on soaring bad credit card debt, coupled with our research findings, set a very worrying scene.  People must be extremely careful about carrying debt on credit cards for long periods of time – you don’t want to be paying for this year’s presents when the Christmas decorations are rolled out again next year; particularly as rates could be at new dizzy heights.

“With interest rates rising on many cards, minimum repayments often only barely cover the interest accrued on the debt.  By paying just the minimum borrowers could spend most of their life paying a credit card company a monthly sum on a debt as small as £500.

“Those with credit card debt should look at ways to reduce the outstanding balance on their card, especially as providers have been known to increase APRs for longer standing customers.  One way for borrowers to reduce their interest payments is by taking out a card with a zero per cent introductory offer on balancer transfers, affording them a better opportunity to clear the debt.

“Consumers should use a credit card for purchases over £100 as these purchases are protected under Section 75 of the Consumer Credit Act should anything happen to the goods; but borrowers should aim to pay off the item immediately or as soon as possible.”

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Homeowners who are looking to re-organise their credit card debts could consider taking out a secured loan for debt consolidation.  One of many finance options available, a secured loan for debt consolidation could pave the way to a single monthly repayment as opposed to juggling several.  This new monthly repayment could even be lower than current outgoings.  However, when taking out a debt consolidation loan, it must be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.

Posted in Debt Consolidation |