Monthly Archives: March 2011

UK Consumers Feel The Sharp Pinch Of Inflation

UK Consumers Feel The Sharp Pinch Of Inflation

As wages remain static British consumers are really starting to feel the pinch of inflation on their spending.

Consumer debit and credit card spending has dropped significantly due to rising inflation and incomes remaining static, on average.

Latest figures by the Office for National Statistics (ONS) revealed that households’ disposable income has fallen for the first time in almost 30 years, which overshadowed positive news that the UK’s economy shrank by less than city analysts previously thought.

With the 0.8% fall in consumers’ disposable income the ONS have stated that this clearly provides further evidence that consumer spending is getting squeezed to a high extent.

It’s believed that this is the first decline in spending power since 1981 and is a result of wages failing to keep up with the rising levels of inflation.

Economist at the Centre for Economics and Business Research (CEBR), Scott Corfe, believes that projections for economic growth are too optimistic, in spite of being reduced by the Office for Budget Responsibility.

Mr Corfe added:

“The decline in real household disposable income seen in the final quarter of 2010 will almost certainly continue in the first quarter of 2011, as high consumer price inflation – now over double the Bank of England’s target – erodes household spending power.”

He went on to state that this clearly “implies a very weak outlook for the consumer this year.”

With consumer debit and credit card spending becoming so severely impacted by a fragile economy many are really starting to feel the squeeze. Why not check out some of our other articles on how you can protect yourself and your family from financial difficulties:

Ten Top Tips For Making More Money

Top Ways To Improve Your Credit Score

Top Ten Money Saving Ideas

Image: Michal Marcol / FreeDigitalPhotos.net

High Price Of Fuel Prompts MPs To Urge An Investigation

With the price of petrol having a significant impact on consumer’s credit cards and bank accounts, the Government has been urged to investigate the significant differences in petrol prices across the UK.

Tory MP for South Thanet, Laura Sandys, has called for the Department of Energy to launch an investigation into why fuel pump prices vary so much across Britain.

Ms Sandys has said that she can’t understand why her and her constituents are experiencing some of the highest prices at petrol pumps in the UK.

Surprisingly the Office for Fair Trading (OFT) launched an investigation into the price of domestic oil and gas prices but will not look into the price of petrol from fuel stations, in spite of the ridiculously high record prices experienced in parts of the UK.

Charles Hendry, the energy minister, has urged Ms Sandys to report any concerns to the OFT, commenting:

“If there is evidence of unfair practices or anti-competitive practices in relation to fuel prices in forecourts, I hope she would write to them.”

The scrapping of the fuel duty escalator by Chancellor George Osborne has come as a welcome move by many. With a 1p cut in fuel duty many MPs have stated that it will help many struggling drivers to cope better with the record high petrol prices.

In spite of this cut many consumers still feel that more could be done to ease the fuel burden on motorists’ bank accounts and credit cards.

Families Coming Up Against More Debt Problems

Families Coming Up Against More Debt Problems

Families Coming Up Against More Debt Problems

With job losses increasing and incomes falling, it looks like large numbers of families around the UK are going to be left in a position where they’re unable to repay credit card, mortgage and personal loan debts, the Consumer Credit Counselling Service (CCCS) has revealed.

The CCCS believe that many households around the country are struggling as incomes stagnate or fall but the cost of living continues to go up. In some of the worst cases many people risked losing their job completely, leaving them with debts they simply can’t afford to pay back.

It’s believed, with good reason, that families were the most vulnerable, with people who had two kids having an average of only £62 a month left to repay debts after meeting essential costs.

The charity believes that families with three or more children needed a minimum of £45 a month extra on top of their usual income, simply to meet living costs.

With the 40% tax threshold being introduced at the start of the new tax year, along with severe changes to the tax credit system, there is a very real fear that, in an already struggling economy, people simply will not be able to meet living costs as well as repay existing debts.

Lord Stevenson, the Chairman of the CCCS commented:

“The picture is undoubtedly bleak and it seems likely that many more families, including better-off ones, will be increasingly prone to over-indebtedness in the months ahead.”

He went on to add:

“It is also not a uniform picture across the country: public sector cuts in terms of jobs, spending and benefits will weigh disproportionately on certain groups of people.”

Following research carried out, the group has stated that 55% of the 418,000 people it aided last year cited a fall in income or losing a job as the main reason they were unable to maintain debt repayments.

If you are struggling with debt you could visit the CCCS website or SupaCompare – who can help consolidate payments into an easy repayment scheme.

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New Council Initiative Could Help First Time Buyers

Rather than turning to alternatives forms of lending many first time home buyers are being offered help to get on the property ladder by local authorities.

The initiative has been setup to help people who can afford the monthly repayments on a 95% mortgage but do not have a large enough deposit to put down. With the tightening of credit lending criteria many building societies and banks are demanding high deposits before extending credit to customers.

As a result of this scheme, local council authorities will step in and provide a security up yo 20% of the value of the property, which would be held by the bank or building society and on which interest will be paid, allowing the home buyer to qualify for a lower rate mortgage.

As a result the home-buyer will still borrow up to 95% of the value of the property and will own it outright, unlike the shared ownership schemes currently in place.

This new initiative is being piloted by 5 local councils around the UK, including, Northumberland, East Lothian, Newcastle-Under-Lyme, Blackpool and Warrington. However, there are further plans to roll the scheme out to other areas around the country later in 2011.

The Importance Of Checking Your Credit Score

Checking Your Credit Score

Checking Your Credit Score and repairing your personal finances

With a poor economy and credit lending criteria becoming a lot more stringent it’s more essential than ever to stay on top of your personal finances. Checking your credit score on a regular basis is a good way of monitoring your financial health.

Credit card suppliers, mortgage companies and other lenders will usually run a credit check on you to determine your score and your credit history. This is to ensure that you are a reliable customer and will pay any form of lending back in a timely manner.

The higher your credit score is, the better the lending terms will be when borrowing money. However, if you have a poor credit score, it could result in you being unable to obtain any form of credit at all – or you may have to turn to a payday loan or guarantor loan.

Using credit rating companies such as Credit Expert (part of Experian) and QuickCreditScore to check your credit history and score could be the answer.

Using a credit scoring company will help you to check your history – showing you outstanding debts, CCJs, defaults and other things that could be blottting your credit score. It’s worth noting that obtaining your credit score can be free if you sign up for a 30 day trial with one of the agencies, after which you will be charged a monthly fee of around £5 – £7 to keep track of your credit history and score, or you can simply cancel the account after the 30 day period.

It’s important that you clear these as quickly as possible – especially if you want to be eligible to apply for a credit card or personal loan in the future.

Image: Michelle Meiklejohn / FreeDigitalPhotos.net

Ten Top Tips For Making More Money

Ten Top Tips For Making More Money

Ten Top Tips For Making More Money

Are you feeling the financial pinch as a result of high inflation, tax and VAT increases and pay freezes? Well there are a number of things you can do to help make a little more money.

Check out our top ten tips and see if they can help you make a little more cash to alleviate some of that financial burden:

  1. Get a cashback credit card

    Cashback credit cards are a great way of making a little money back on any purchases you make on your credit card. However, bear-mind that you should be clearing the balance of your card every month to qualify for this.

  2. eBay and other online auctions

    Using online auctions such as eBay to sell unwanted possessions is a great way of making a little money on the side as well as help to declutter your home. It’s also worth bearing in mind that you can set a minimum price on the product to help ensure you make the amount you want.

  3. Paid online surveys

    Taking part in paid online surveys can be a nice way of making easy money in the evenings, as long as you don’t mind filling out pages of market research polls. Some companies will pay you good money (£100 in some instances) for your participation in a survey.

  4. Rent out a room

    If you have a spare bedroom in your house then you could consider renting it out. Under the “Rent-A-Room” Government scheme you can effectively rent out a room in your house and pay no tax on any income you make on it. There are of course some exceptions to this – for example, if you charge a large monthly fee then you may have to pay some, however, for anything up to £350 a month this is tax free.

  5. Sell unwanted mobile phones

    Have you got a couple of unused mobile phones lying around at home? Then consider trading them in and getting some easy money for them. A decent smartphone could fetch around £80 or more!

  6. Benefits

    Are you getting the benefits you’re owed? It’s worth bearing in mind that, if you have children, you could be entitled to a little tax relief in the form of child tax credits and even working tax credits. So get some forms, fill them out and see if you’re entitled to them – it could be well worth the effort!

  7. Online shopping cashback opportunities

    Using online shopping portals such as QuidCo, GreasyPalm and TopCashBack will actually pay you to shop through them. You essentially earn a percentage of the commission the company makes through offering special deals on their websites.

  8. Get another job

    If you have a bit of spare time in the evenings or at weekends then why not consider working a second job to make a little more money? We appreciate that working a second job isn’t everyone’s idea of fun but it might help to alleviate some of that financial burden. It’s also worth bearing in mind that you don’t have to do something you dislike – why not combine a hobby or interest you have with a part time job? Consider coaching at your local football or rugby club, for example!

  9. Tutoring

    Are you a teacher, a university graduate or simply an expert in your field? Then you could consider becoming a tutor to help bridge the gap until payday. Simply advertise in places that parents and students are likely to look – e.g. on Campus, in the library or in the local paper.

  10. Blogging

    Start a blog and write about something you find interesting and want to share it with the rest of the world via the web. You could look at setting up a free blog on Google’s Blogger and monetising it by putting adverts (such as Adsense in place) to help you make a little more money.

If your favourite method of making a little extra cash isn’t on this list then please feel free to leave a comment below!

Image: Graeme Weatherston / FreeDigitalPhotos.net

Half Of Brits Fear Credit Card Fraud

A recent survey has revealed that almost 50% of Brits are concerned about becoming victims of credit card fraud, however, many are simply failing to take adequate precautions to protect themselves.

Of the people questioned, almost 50% claimed that they were worried about losing money as a consequence of having their credit card or debit card stolen or cloned.

Almost two thirds of the respondents suggested that they were more worried about being the victims of credit card fraud as a result of the difficult economic climate. A further 35% stated that they now had less money and they simply could not afford to lose what they do have.

One of the biggest concerns this report revealed was that almost 10% of respondents admitted to keeping their pin numbers with credit cards and debit cards, making it very easy for anyone to use the card should it be stolen or lost.

Risk Business Solutions Consultant at ACI Worldwide, Andy Morris, commented:

“When it comes to fraud, prevention is obviously better than a cure. Banks need to continue to inform consumers about how they can protect themselves against fraud.”

Rogue personal loan brokers target the vulnerable

The Citizens Advice Bureau (CAB) issued a stark warning after tens of thousands of vulnerable people have been tricked into handing over large amounts of money by cold-calling rogue credit brokers and debt management firms.

The CAB stated that consumers who are struggling financially are being targeted by rogue finance companies who contact them to offer to help find a loan.

The group went on to reveal that people who have been victimised by these firms were charged large up-front fees for the service. However, the loan frequently failed to appear and they were unable to get the search fee back.

This is a relatively unethical practice as most finance brokers that charge finders fees only retain the amount if they find a loan for you. However, in these cases it was found that, after the cold-caller took the applicant’s bank details they found that money had been withdrawn from their account without their consent to do so. In addition to this their contact details were passed on to other finance firms and were bombarded by spam calls, emails and text messages as a result.

Unfortunately, people who find themselves in a position where they are unable to borrow money from banks and other mainstream lenders due to poor credit scores tend to be targeted by finance brokers offering sub-prime loans and credit cards.

As a result the CAB have lodged a super complaint with the Office of Fair Trading (OFT), asking it to ban finance firms from cold-calling and charging up-front fees.

Chief executive of the CAB, Gillian Guy, commented:

“Our evidence suggests that rogue operators are cashing in on the desperation of people hit hard by the recession who are least able to afford it, and that this problem is set to grow much worse.”

Ms Guy added that there are too many loopholes in the consumer protection framework about unsolicited marketing and broker fees, allowing “bad practice to flourish.”

Creditwindow advises that if you do apply for a loan through a broker you should always check whether:

1. There are any up-front fees and check whether or not you get this back if the broker fails to find you a personal loan.

2. Read through any contract thoroughly before signing – make sure you know what you’re getting yourself into.

3. Most importantly – don’t get pressured into taking out a loan if you have any doubts whatsoever. Remember – the broker is in it for the business – not for your best interests.

Top Ways To Improve Your Credit Score

top tips to improve your credit score

Are you looking for ways to improve your credit score - check out our top tips and make a start today!

Your credit score is the single most important element that almost all loan and credit card companies will turn to when determining whether or not to lend you money.

In addition to this a great credit score could mean the difference between a low interest rate (the interest incurred that you have to pay back on top of your loan) and your chances of getting approved for a loan or credit card at all!

Even if you are approved, with a poor credit score, you could end up paying out a huge amount of interest on top of the amount you’ve borrowed.

Check out our top tips to help improve or maintain your credit score:

1. Make credit card and loan repayments on time

This is probably the most important way of helping to improve your credit score. Payment history is the main factor that goes into determining your credit score.

2. Control your debt

Don’t get into more debt than you can afford to pay back and always ensure that you control your borrowing. If you already have outstanding debt then it’s imperative to make repaying this the number one priority and avoid all other debt if possible until this is paid off.

3. Control the balance on your credit card

It’s tempting to pay-out for everything on your credit card – don’t do it!

You have to remember that, just because you’ve got a £2,000 limit (for example), doesn’t mean you have to spend the full balance. It’s worth bearing in mind that you could well need this some day for some form of emergency such as urgent repairs or unexpected bills.

Apart from this it can also prove much harder to pay-off a larger balance quickly and may need to be spread over a period of time. This could be detrimental to your credit score.

4. Try to avoid applying for too many loans or credit cards in a short space of time

Each and every time you apply for a personal loan, credit card or mortgage this inquiry will show up on your credit score (usually Experian or Equifax). Unfortunately having too many inquiries on your credit history could have an adverse effect on your score and they will remain there for around 2 years. Since a single inquiry slightly affects your score just imagine what a number of them would do!

5. Talk to your lenders

If you’re really struggling to pay off your debt then talk to your lenders and arrange a payment schedule at a monthly amount that you can actually afford to pay back.

6. Avoid bankruptcy at all costs and consider consolidating your debt

Whilst filing for bankruptcy certainly appears to be the easiest solution to many people faced with large amounts of debt it’s not always the best route to take. Going down the bankrupt route is the single worst thing you could do to your credit score. Bankruptcy could result in an inability to borrow money for around 7 years. Any mortgage loan company, car financing firm or secured lenders will turn down an applicant with a bankruptcy listed on their credit report.

Consolidating multiple debts into one lump sum could be the solution to improving your credit history if your debt has grown to an uncontrollable level. This should really be seen as a last resort but is certainly something worth considering if you are really struggling.

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