According to payments Association Apacs, debit cards are being used more than credit cards in the run up to Christmas.
“Spending on debit cards is predicted to increase by £3.4 billion to £20.4 billion in December, while credit card expenditure is predicted to hit £11.4 billion.”
However, online trends indicate that credit cards will make up 67% of the total £3 billion spent on plastic via the internet in December.
Sandra Quinn, director of communications at Apacs, says: “Overall our penchant for plastic continues and it looks as though this Christmas our plastic cards will continue to replace cash and cheques for our festive purchases. Over recent months we have seen that cardholders are becoming more responsible in the way that they borrow, reining in their spending and focusing on repayments.”
(Via QCK.com)
With UK banks being squeezed over unfair charging, I guess it was only a matter of time before we would end up paying elsewhere to plug the gap.
According to Easier Finance:
“Following the OFTs cap on fees, card providers will need to reintroduce annual card fees of up to £35 or raise interest rates by up to 2% to recoup losses estimated at £1bn, claims a report issued by PricewaterhouseCoopers (PwC).”
Michelle Slade, analyst at moneyfacts.co.uk comments: “Credit card providers have not been slow to react. In the three months following the OFT intervention, Moneyfacts researchers found 19 card providers increase interest rates by an average of 2.5%. With some unlucky customers facing rises of 5%, 6% and even as much as 12%, so it looks as if the £1bn reclaim is already well under way.”
“The trend of introducing card fees has also begun. Recently Lloyds TBS launched a new card, Premier Amex with a £4.95 per month fee available for Premier Current Account customers, offering a comprehensive range of benefits. But more interestingly, last week Co-operative Bank announced that for new and existing customers, their Platinum Tracker and Northern Rock Base Rate Visa would both carry a £2 per month fee. So while the Co-operative received special attention, in cutting its default fees to below the OFTs recommended £12 threshold, with default fees lowered to £11, this recent introduction of a monthly fee will prove unwelcome news for their customers.”
Identity theft has been a rapidly increasing problem in recent years. Often banks and credit card companies will send you all sorts of documents and applications (mostly not requested) only for it to be put in the trash. That was until we were told to tear up all these documents on the premise that this would help protect against identity fraud.
Well, according to (NBC News) you can think again.
“With five applications, and a little muscle, we started ripping. Scotch taped them back together. And wrote around the tape filling out the application the way an identity thief might if he’d been digging in our garbage.
The result is a messy, crooked, patchwork each time. Who would possibly give a credit card based on this type of application?
The answer: Some of the biggest banks in America. Of our five taped-up applications, three returned new credit cards to us - lines of credit worth more than 21-thousand dollars.”
According to KSL.com:
In a statement, chase card services says it has “rigorous policies” for handling applications and a “special handling process” for the rare torn applications. In this case, however, “it is clear to us our procedures were not entirely followed for this particular application…and we are investigating.”
For the two cards it issued, Bank of America, which merged with MBNA, says the applications “both went through the proper verification processes” and that “the signature, social security number and birth date matched” a (current) customer with excellent credit.
I guess, the moral of this story is to invest in a cross shredder!
According to Morgan Stanley Cashback credit cards are the number one reward option selected by customers.
Recently produced figures indicate 70% prefer cashback, 21% prefer retail discounts and 5% prefer travel perks and incentives.
Morgan Stanley say in their report:
“Loyalty and reward schemes are becoming increasingly important for customers and represent the most important consideration for 29% of cardholders who have recently switched or are planning to do so. This means that reward programmes offering bonuses such as cashback are not far behind interest rates (31%) as the primary concern for consumers.”
Patrick Muir, marketing director of Morgan Stanley consumer banking, said:
“With the majority of people paying off their credit cards in full every month, using a credit card with a reward scheme really makes sense,” he commented.
“With focus shifting away from short-term offers, the popularity of reward schemes is no surprise.”
(Via the Thrifty Scot)
I guess it’s a question of “home sweet home” when it comes to racking up expenditure on UK credit cards over Christmas.
Morgan Stanley’s recent research suggests “A total of £344 is predicted to be spent by the average Briton on their house and vehicles.”
“Groceries, at a cost of £339, are expected to be the second largest area of credit card expenditure.
Overall, Britons will spend an average of £1,270 on their credit cards between October and December 2006, Morgan Stanley indicates.”
(Via QCK.com)
