Posted by Tom Wilkins on Tue 24th July 2007 at 06:00 AM, Filed in Credit News
With UK interests now at a lofty 5.75% the pinch is really beginning to be felt by households.
Recent research suggests that out of every pound of the average household’s income, 19p is seconded to repaying debts and interest. Ouch!!
This surpasses the previous peak of 18p seen in the third quarter of 1990, according to PricewaterhouseCoopers.
John Hawksworth, head of macroeconomics at PwC, said:
“Many households have faced a squeeze on their finances due to a combination of modest earnings growth, rising utility bills, higher petrol prices and increased debt repayment costs.”
(Via Daily Mail)
Posted by Tom Wilkins on Mon 23rd July 2007 at 06:00 AM, Filed in Glossary
This is a credit card endorsed by organistations, such as sports teams, colleges, commercial and professional organizations and offered to their members. It is usually an incentivised scheme by which use of the credit card incurs financial benefit for the endorsing organization.
Answering the following questions will help determine whether you are a compulsive spender. Or at least that’s the theory!!!
1. I have not seen my credit statement for over a year and don’t care.
2. I can barely afford the minimum payments on credit card balances - and don’t care.
3. I haven’t checked whether I can get a better credit deal elsewhere for over 2 years.
4. I have an overdraft that runs close to the limit every month.
5. I have been turned down for credit 3 times in the last year.
6. I have no pension, no savings and no assets.
7. I focus on credit card gifts and incentives, not the APR.
8. I have more than twenty credit cards with balances.
9. I have never used a budget to control my spending.
10. I run out of money regularly and have to borrow more on my overdraft.
It’s nothing new but there’s a helpful article over at USAToday about the need to keep a good credit score.
This snippet was particularly poignant:
“In response to a sharp rise in foreclosures, mortgage lenders have tightened their standards, leading to an increase in rejected applications.
In addition, interest rates have been rising in recent weeks, so even if you qualify for a mortgage, you’ll probably pay more for it. That means it’s more important than ever to make sure your credit score is in good shape. A credit score is a mathematical model that analyzes information in your credit report. Lenders use credit scores to gauge the likelihood that you’ll repay your debts. A good credit score can save you thousands of dollars in interest over the life of your loan.”
This is so true, and it doesn’t stop with Mortgages. Hiring cars, personal loans and even business loans can be made more expensive if your credit score doesn’t come up to scratch.
It appears that the ever more competitive credit card market is beginning to tighten it’s belt in the UK.
According to recent research from cardguide.co.uk the number of cards now offering fee free balance transfers with 0% interest free periods is in significant decline.
The mechanism of zero fees on balance transfers has long been used to massage the cost of repaying balances without incurring large amounts of interest.
The problem appears to be that credit card companies are not making enough money and this is therefore resulting in a rethink on fees.
Of the many zero per cent balance transfer credit cards still available on the market, most charge borrowers a fee for transferring other credit card balances onto the card.
Steve Brown, BalanceTransfer.cc and BusinessCreditCards.cc owner, said: “Zero per cent intro APR balance transfer credit cards that don’t charge a fee for transferring balances have been the most popular products recommended at the BalanceTransfer.cc site for many months now.”
(Via Fair Investment)
