07.1.2008 | 3:36 pm | Uncategorized
You may have heard of pre-paid credit card. Also known as secured cards, they offer many of the advantages and benefits of a regular credit card without the risk of overspending and getting into debt. In the current credit crunch, it’s definitely worth thinking about.
So what does it involve? Think of it like a pay as you talk mobile phone. You load the card up with credit, and away you go. Here are some of the advantages to having a pre-paid credit card.
* No debt – it’s impossible to get into debt (one of the biggest risks of a regular credit card) because you only spend the money you’ve put on the card.
* No interest – this is a massive incentive, as the credit on a regular can soon mount up.
* Versatile - pre-paid cards can be used online, in shops, over the phone… In other words, exactly like a regular credit card.
* Safer - a pre-paid card is safer than carrying cash.
* Ease of approval – unless you’ve been involved in fraud, you will almost definitely be approved. This goes for under-18s too. Applying for a pre-paid credit card won’t affect your credit rating either.
So if you’re thinking about getting a credit card but don’t want to run the risks that a regular card presents, think about going pre-paid. Find the best deals at CreditCardExpert.co.uk.
05.18.2007 | 5:57 pm | Uncategorized
Profits of British credit card companies plummeted by 43 per cent last year when compared to the previous figures in 2005, it was revealed this month.
According to banking analyst Lafferty, profits for all collective UK credit card companies amounted to just £1.16 billion in 2006.
The fall in profits highlights just how much the industry relied on overcharging customers for fees such as going overdrawn or sending letters to customers, which were capped at £12 in spring 2006.
In the past year there has been much criticism of credit card companies over their attempts to introduce new ways of charging customers, which have been dubbed as cynical and unfair exercises by consumer groups.
The figures now put the UK credit market in the bottom third of global credit markets in terms of profit, with credit companies now only making an average of £16 per customer, compared with £27 per customer in 2005.
05.17.2007 | 5:40 pm | Uncategorized
Profits of the UK’s credit card companies have fallen by around 40 per cent over the past year, according to the latest statistics.
On average, lenders made an average of £24 per credit card issued last year, a decrease from the £27 annual profit per card recorded in 2005, making the UK the third-least profitable market for credit card companies.
In addition, the study carried out by the payments research firm Lafferty Group, overall profits in the UK credit card market fell by 43 per cent to £1.2 billion in 2006.
While profits are predicted to fall further over 2007, with total profits for the year of £1 billion expected, the market is likely to recover in 2008.
Part of the reason behind the falling profits is the recent ruling against excessive penalty fairs for late payments, which has benefited the borrower.
However, Lafferty also reported a rise in bad debts on credit card, with borrowers struggling to pay off the bills, highlighting the need for consumers to carefully consider the product they take out.
05.17.2007 | 5:39 pm | Uncategorized
UK consumers are increasingly living the high life, with credit card used to fund regular restaurant visits and the purchasing of luxury goods, it has been reported.
According to the most recent research carried out by Mintel, consumer spending rose to a record £1.09 trillion in 2006.
While home purchases continued to represent the biggest financial outlay by Britons, accounting for £4 in every £10 spent over the year, increasing amounts were also spent on luxury goods and lifestyle choices, such as holidays.
Of those questioned as part of the study, 23 per cent claimed that they were planning to take a major foreign break over the next year, while the amount spent on eating out grew by 18 per cent in comparison to 2002 levels.
“Rising disposable income has led to higher expectations about the quality of life, and as a result we are increasingly trading up and spending more on better quality, premium products and services,” said Neil Mason, senior retail analyst at Mintel.
Recent figures from the life assistance company CPP revealed that the average UK consumer will spend £157,530 on credit card over their lifetimes, with plastic being increasingly used to fund smaller, everyday purchases.
05.15.2007 | 4:58 pm | Uncategorized, credit cards
Following a relatively quiet new year, UK consumers are increasingly spending on their credit card, according to the latest figures.
The trend comes as Britons have finally managed to pay off the debts from Christmas and began to feel more confident about spending again. One factor cited for the improved popularity of credit card is the recent ruling from the Office of Fair Trading concerning the penalty fees lenders are legally allowed to levy.
Following an investigation into the level of penalty fees, the OFT ruled that credit card companies could charge just £12 per occasion a borrower exceeds the limit on their card.However, lenders have begun to hit back in order to recoup lost profits. While some credit card companies have increased their interest rates or the charges for transactions carried out abroad, the Royal Bank of Scotland is currently considering charging its customers £12 should they fail to inform the bank about a change of address.
“I’ve never come across this kind of charge before,” commented Richard Mason, a spokesman for the price comparison site Moneysupermarket.
