Debt Articles

Unfair charges to be curbed

yannis — Sat, 01 Mar 2008 01:08:43 +0000

Article Category: Debt Management Help and Advice

Telecommunications watchdog Ofcom has made proposals designed to curb unfair additional charges on consumers’ bills.

This is welcome news for millions of hard-pressed households labouring under the pressure of trying to keep up with spiralling living costs.

The proposals mean that broadband, mobile and pay-per-view television providers have to clearly mark the true price of services.

Ofcom chief executive Ed Richards said that although consumers were benefiting from greater competition and lower prices they needed to know the full costs of the services they were buying.

He added: "Our proposals will encourage companies to be open and straightforward about additional charges where they feel it is necessary to include them.

"In addition, our proposals mean that, in some cases, additional charges will be subject to clear limits which would provide direct protection for consumers."

Once all the guidelines have been finalised, Ofcom intends to set a time limit of three months for communications providers to comply or risk facing court action.

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Couples risk debt for love

yannis — Fri, 29 Feb 2008 12:39:21 +0000

Article Category: Debt Management Help and Advice

Loved-up couples showering each other with tokens of affection might be storing up problems on the money front.

According to price comparison website monesupermarket.com, men splash out an average of £1,326 each year on items such as anniversary gifts, dining out, flowers and special holidays.

Women are not so generous, forking out an average of £659.

London males spent the most, at around £1,776 while those in the north laid out £873.

Richard Mason, from moneysupermarket.com, said: "People might laugh at the North where the starry-eyed spend is less than half of that in London, but £873 a year is still a pretty respectable figure.

"It’s certainly my job as someone who lives and works in the North to defend our romantic credentials.

"And it’s the Midlands that have the dubious honour of having three per cent of people spending nothing on their partner."

Cars seem to rate quite highly in some mens’ affections, as the figures also reveal that car fanatics in their 20s spend an average of £956 each on automotive non-essentials.

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Wedded to debt

yannis — Thu, 28 Feb 2008 17:30:31 +0000

Article Category: Debt Management Help and Advice

Loved-up couples walking up the aisle will be taking on more than a lifetime of wedded bliss if research undertaken by Sainsbury’s Finance is anything to go by.

With thousands of women looking to take advantage of the leap year to propose in traditional fashion, Sainsbury’s estimates that as many as 123,500 personal loans worth around £1.16 billion will be taken out during 2008 to help pay for weddings.

The average size of a personal loan taken out with the lender to help fund a wedding is £9,363.

Weddings are now big business in the UK with the average, according to website weddingguideuk.com, costing £11,000.

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Couples find it easier

yannis — Thu, 28 Feb 2008 12:40:41 +0000

Article Category: Debt Management Help and Advice

Hard-pressed singletons finding it difficult to get on the housing ladder might be interested to know that becoming one half of a couple might be one way out of their predicament.

Spiralling house prices have put the dream of owning property out of reach for most singles with an average wage.

David Kuo, from financial website Fool.co.uk, echoes this view.

He said: "In London in particular, you’re talking about ten times the average salary just to get onto the housing ladder.

"So this is where two people, when they club their finances together, will find it al lot easier and have a lot more choice… sometimes it’s not just a question of getting on the housing ladder; it’s a question of finding a house that you would like to buy - not just one that you can afford to buy."

He concluded by saying that by combining two average salaries together, couples could borrow around £200,000 and the market "just opens up very, very widely".

Meanwhile, there are reports that the credit crunch has led to many mortgage providers tightening their lending criteria - making it even more difficult for singletons to become property owners.

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Cash is not king for phone companies

yannis — Thu, 28 Feb 2008 11:48:46 +0000

Article Category: Debt Management Help and Advice

Good old-fashioned cash is definitely not king as far as some phone companies are concerned.

According to price comparison website uSwitch.com, there is a staggering £75 million a year penalty on 3.4 million customers for not paying their bills by direct debit.

Customers are also losing out by receiving paper statements instead of opting for email notification.

Steve Weller, from uSwitch, said: "Some would argue that the additional charges imposed on customers not wishing to pay by direct debit are an unfair penalty.

"However, some companies, such as Pipex and TalkTalk, do not even give customers the luxury of having a choice – it’s direct debit or direct debit.

"Our advice to the 13 million customers being stung by these fees is to compare prices among all the providers to find the best deal for their needs – some companies will still post bills for free," he added.

Hard-pressed householders struggling to keep up with rising living costs and spiralling debt should take note.

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Debt hangover affecting budgets

yannis — Wed, 27 Feb 2008 12:47:34 +0000

Article Category: Debt Management Help and Advice

Debt hangovers are giving some people a nasty headache in budgeting for this year’s finances.

That is the view of debt charity, Credit Action, which says that a combination of still trying to pay off debts from last year and increased living costs, plus higher inflation, is putting a financial strain on household budgets.

Chris Tapp, from the charity, was concerned that in the run up to Christmas a "little bit of a jump" was seen in the amounts people were borrowing, which might impact on how much more of their take-home pay is taken in paying for day-to-day expenses.

This could, he says, force some of them into using their credit cards just to get by month to month.

He added: "This is a worrying scenario to find yourself in and that point - when you start using your credit card as a necessity - you should go and get help."

Mr Tapp concluded by saying that a home loan should always be paid first, but "if you are using your credit card to pay your mortgage, it’s a worrying indicator because you can’t do that forever".

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Belts tightened as low-cost credit dries up

yannis — Wed, 27 Feb 2008 12:47:34 +0000

Article Category: Debt Consolidation Help and Advice

Borrowers are having to increasingly look for higher cost credit in their search for a loan.

That is the view of debt charity Credit Action, which says that the tightening of lending criteria, due to financial turbulence in the money markets, has made it more difficult for people who may be classed as a higher risk, to obtain standard high street credit cards.

Chris Tapp, from the charity, said that people were now generally "reeling in" their spending.

He added: "People are looking to tighten their belts and try to save a bit more, but also, credit is less widely available so what we will see is a certain amount of growth in higher cost credit.

"It’s likely to be a year in which, as the economy more generally slows down, the rate of borrowing will, to an extent, slow down with it."

According to Debt Help UK, 90 per cent of credit card companies fail to check the income of applicants.

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Loan firm scotches new lending

yannis — Tue, 26 Feb 2008 12:39:51 +0000

Article Category: Debt Management Help and Advice

Mortgage and loan firm London Scottish Bank has announced it will stop lending to concentrate on debt collection.

The Manchester-based firm, which specialises in lending to lower-income families, has posted a £5.6 million loss for 2007, compared to a £16.5 million profit for the previous year.

It has said that it expects to sell or close its loan business - primarily mortgages for council right-to-buy and high-rise flats.

The company will switch its priorities to concentrate on its Robinson’s Way arm, which collects debts on a commission basis for a variety of lenders and utility companies.

A company spokesman told BBC News: "Financial performance is likely to be subdued until the group has completed its refocusing."

London Scottish’s shares have collapsed by around 80 per cent in the last year.

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IVA time bomb

yannis — Tue, 26 Feb 2008 12:39:51 +0000

Debt Category: IVA (Individual Voluntary Arrangement) Help and Advice

Thousands of people are facing an IVA time bomb.

Under the terms of an individual voluntary arrangement, some of the value of their properties has to be released to put towards paying off debts.

However, the new loans they must take out will probably be at higher rates than their existing loans because of tightening lending criteria due to the credit crunch.

To compound the misery they will probably be re-classified as ’sub-prime’ customers and be charged even more.

An IVA is an arrangement whereby the lender agrees to a repayment plan with some of the debt written off.

All IVA’s contain a clause saying that the borrowing for the equity release must be ‘affordable’.

If it can be proved by the borrower that this is not the case then the lender must write off that portion of the debt.

Andrew Smith, marketing director with leading debt advice company ClearDebt, told thisismoney.co.uk: "Banks have agreed to take this on the chin."

Critics of IVA’s have said that it has been made easier for people to run up a debt knowing that at some stage they could well have part of it written off.

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Surf’s up for credit card users

yannis — Tue, 26 Feb 2008 11:47:36 +0000

Article Category: Debt Management Help and Advice

Credit card users struggling to repay debt are planning to do some ’surfing’ and transfer a collective £6.68 billion to other cheaper cards.

According to research undertaken by Sainsbury’s Finance, 4.3 million people intend to switch providers before July.

This equates to £257.15 million per week or £36.74 million a day.

Many of those transferring will be taking advantage of zero per cent transfer deals.

The findings also show though, that more than one in three credit card holders are paying interest on their credit card balances.

Donald MacLeod, head of cards at Sainsbury’s, said: "It’s not surprising that zero per cent balance transfers are popular.

"Our research shows that there are an estimated 5 million people with outstanding balances who are not only incurring interest but also admit that it may take them longer than one month to clear their spend."

The average amount people plan to switch is £1,155.

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