30/05/2008 by Dave.

Good customers are being penalised as credit card companies look to retrieve the millions they have lost to bad debt. Customers that would normally be considered low risk have found their credit limits significantly cut and in some cases their accounts closed.

Uswitch who completed the survey on over 2,000 credit card customers said: “Credit card providers are taking drastic action to manage bad debt. The question is whether providers are simply trying to reduce risk and indebtedness, or whether they are just trying to filter out less profitable customers”

Posted in Debt | Print | No Comments »

28/05/2008 by Dave.

The National Debtline has warned people who regularly use payday loans that they may have a serious underlying debt problem.

Becky Boden Wilks, a spokesperson for the advice line, said that those who rely on payday loans are likely to be overcommitted, paying out more money than they are earning.

Ms Wilks suggested that people in this situation should monitor their budget and seek advice about their debt.

“If somebody feels the need to use a payday loan on a regular basis, it’s probably symptomatic of a serious underlying debt problem,” she said.

Consumers can end up falling into a cycle whereby they pay back the borrowed amount the following month, effectively spending their wages before they have got them and falling into a cycle.

She advised people with financial difficulties to negotiate smaller payments with their creditors.

Posted in Debt | Print | No Comments »

26/05/2008 by Dave.

Families across the country could be wasting close to £500m every year by paying over the odds to their lenders on mortgage protection insurance, research from Columbus Direct has suggested.

The research stated high street banks are raking in cash, with some charging around twice as much as necessary to cover monthly outgoings.Although cover is available from some companies for as little as £400 per year, Columbus estimated that homeowners taking out protection from their lender could be spending around £689 for the same level of cover, essentially wasting around £289 per year. Spread across every home taking its insurance from its lender, this equates to a £471m bill for Britons every year, simply because they are failing to shop around.

“We think that it is scandalous that banks are charging so much to cover their own customers. It is a natural thought to turn to your bank or lender when looking at this kind of insurance but, at the same time, you would expect them to be looking to provide you with a good deal,” commented Rob Thomas of Columbus.

Posted in Mortgages | Print | No Comments »

23/05/2008 by Dave.

With the impact of the credit crunch continuing to take effect in the UK, mortgage borrowers are increasingly using brokers as a source of advice.

That is according to research conducted recently by Alliance & Leicester, which indicated that the tightening of lending conditions has changed the way in which consumers view brokers.
It was discovered that among brokers, as many as 76 per cent feel that they are more frequently being sought by borrowers to provide advice and guidance.

Raj Uppal, Alliance & Leicester’s director of mortgages, commented: “Borrowers are becoming increasingly aware of the importance of making the right mortgage choice and that they can take advantage of brokers wealth of knowledge to ensure this.

“Instead of simply using a broker to source products, borrowers are now making the most of their advisory services to learn about affordability and extend their product understanding.”