As news that Egg have contacted up to 160,000 of their customers with threats to cease their credit lines unless they settle at least some of their debts, many credit card holders are running scared and wondering why egg have taken this action. Can they do it? Is it right?

Unfortunately for many Egg credit card holders, and other Egg financial customers, the company are well within their rights to carry out the recent threat of action. They had been in contact with the regulatory authorities prior to their recent communications and were informed that they were well within their rights to do this. The action itself has prompted an array of responses from the financial and consumer markets with many applauding the action, but some suggesting that they are stripping out “higher risk” customers at a time when they will have trouble refinancing their arrangements.

While Egg was taken over last year, their new owners seem to have taken some time to come to grips with the UK credit card market which is among the more competitive in the world. As and when these 160,000 “problem” accounts are sorted out there will no doubt be an immediate increase in the credit rating for the Egg operations. This will lead to better lending terms for the company and immediately impact upon their bottom line profitability – leaving many customers to fend for themselves.

There are some concerns that because one of the larger credit card companies has broken rank there is a distinct chance that others will follow, knowing that much of the flack has already been targeted at Egg. It has to be said that on one hand the company should be applauded, but on the other the decision to take such action seems to have been taken rather quickly with very little thought for their customer base.

As you would expect from a period in which worldwide economies have been battered by the credit crunch, there has been much comment about a possible fall in the UK housing market. While on the surface the signs and elements are there for a significant fall, what is the situation underneath the surface?

While the doom and gloom merchants are having a field day, the situation under the surface is no where near as bad as you might think because of a number of factors which include :-

Demand v Supply

Even though there has obviously been a fall in demand for houses with fewer buyers in the market, there has also been a fall in the number of people looking to sell. So in relative terms the fall in demand has to some extent been offset by the fall in the supply of houses to the market.

Result : Neutral

Interest Rates

There is no doubt that the recent worldwide trend of falling interest rates is set to continue, with UK rates set to fall in February and possibly later on in the year. A lot may depend upon inflation and the state of the housing market with regards to further falls, but the trend is definitely down.

Result : Positive

Housing Associations

More and more people are using housing associations as a vehicle for the purchase of their homes, whereby the housing association will fund part of the purchase price of the property for a share in the asset.

Result : Positive

The only real unknown factor which will come into play at some stage is the economy and how it will perform over the next couple of years. If the economy were to slowdown significantly then this would hit the employment market which would have a negative impact on the housing market. This could possibly overshadow all of the elements we have mentioned above.

There is no doubt that the UK economy is entering a very tricky period, but the housing market for the moment is holding fairly steady to the surprise of many.

A credit card is a significant tool in planning your finance. There are thousands of offers available with these cards and you may want to get the best and cheap deal while availing a credit card. You have to make sure that the credit cards that you are getting will meet your requirements in the best manner.

Look for the hidden costs

Many credit card companies nowadays offer low annual rates of interest to lure customers. But, in order to compensate, they increase the fees of annual membership. So, you have to consider the fees charged on various credit cards and should apply for the one that suits you the best. Also, you can compare the rate of interest and fees charged by different credit card companies to get the best deal. If you feel that your credit card’s APR is less than others and the fees are also reasonable, then only you should get the card. If you have selected a credit card with a little higher APR and no fees, then also you will be paying the same or less amount when compared to the credit cards of lower APR and higher fees.

Interest free credit days

Nowadays, different credit card providers offer different interest free credit days. It is not the same in all the credit cards. So, you need to look for the number of interest free days. Normally, the credit cards carry 36 to 54 interest free credit days. So, you should choose the one which offers you more interest free credit days. But, if the interest rate is higher and they offer more interest free credit days, then there is no point in getting such a credit card. You should take into consideration both the rate of interest and interest free days to decide on the credit card.

Reward programs

If your credit card gives you cash-back rewards on every purchase you made and charges a little higher APR, then will you accept it as the best credit card available in the market? What if another credit card gives you nothing as reward, but charges low APR? It entirely depends on your repayment habit. If you repay the expenses made every month promptly, then there is no need to worry on the higher APR as you will pay the amount within the interest free credit days. But, you only make payments in installments, and then the credit card with lower APR suits you the best. So, plan your strategy before opting for a credit card.

Interest rates on credit cards keeps on changing and some companies even hike them without any prior notice. If you ignore the change in the interest rate, then later you have to pay much more than what you have estimated. Therefore, you need to research before purchasing a credit card and also you should shop smartly to avoid bulk payments. Also you should make it a habit to pay the due amount of your credit cards within the interest free days to save your hard earned money.

UK credit card holders may locate that their credit limits are considerably reduced in this Christmas season. Many financial institutions are focusing on lessening the exposure to poor debt by improving the quality of their lending, subsequent to the worldwide financial markets credit disaster. Many lenders are facing difficulties in US due to the collapse of the sub-prime market. So, now the companies are thinking about the quality of their lending and hence are slashing the credit limits of their customers considerably. Also, they are not accepting new applications and as a result many people are compelled to reduce their Christmas spending plans.

Many credit card companies in UK are suffering from declining profits and also due to the mounting bad debt histories. Credit card companies are still being broadly advertised however many companies are currently picking their fresh customers with great care, and they are taking in only those who have first-rate credit ratings so as to enhance the quality of their consumer base. Few years back, the customers are the king and they can compare the rates offered by various credit cards before selecting the best deal. But, now the credit card companies are choosing their customers carefully from the numerous applications they are getting every day.

Whatever the market situation may be, Britains are not worried about the changes in the market when they need finance for their Christmas spending. The tapering loan conditions and elevated interest rates are not deterring their spirits of the merry season. According to a survey, they are likely to spend more on shopping than the last year.

Many people opt for personal loans to meet their Christmas spending. But, one should make it a habit to get personal loans to meet the expenditure. If they have taken loans higher than what they can actually afford, then they have to suffer from bad debt. So, Christmas spending should be done with proper planning and budgeting.

A borrower may find the deals difficult to understand as there are so many types of loans with diverse rate of interests available in the market. Different companies offer different rate of interest and terms and conditions on their personal loans. So, the borrower should have some idea of the market before availing loan for his Christmas spending. They can get information from the internet or they can even consult a local financial advisor.

Many households are struggling under growing debt and also due to the increased mortgage payments. They are stretching their borrowing limit beyond their capacity. This may result in bad credit history resulting in mental agony and difficult life pattern. So, the Christmas spending should be done wisely and the gifts should be chosen with care and precaution. If they can defy the temptation to overspend during the festive period, then they can even save a small fortune in their bank account. So, choose the Christmas gifts wisely and spend your hard earned money after thoroughly analyzing your credit limit to enjoy the festive time with great peace of mind.

As we start to leave the Christmas period behind, January will see further financial pressure for many in the UK with credit cards statements dropping through the door in the New Year. Maybe you should have saved a little more throughout the year? Maybe you should have gone a little easier on the presents? But it’s all too late now…….or is it.

While the credit crunch has affected much of the financial industry, with many mortgage and credit card offers being pulled, there are still some alternatives out there if you look around. Why pay sky high credit card interest rates when you can take out a longer term loan on payment terms which you can afford?

While the credit card companies would much rather that you kept your credit card balance high, thereby giving them a long term income stream and ensuring that you are in their grasp, the banks may have something to say about this. As interest rates in the UK start to fall we are seeing many of the credit card companies refusing to pass these on to customers, opening the door for the banks to step in.

While it may scare many people to actually look at the extent of their credit card debt, you need to attack these issues head on before they get out of control. Would a more structured long term approach not suit you better? A situation where you could actually see your balance coming down rather than just covering the debt interest each month?

Getting yourself back on the road to financial recovery may take a little time, it may be difficult at first but rest assured it will be a whole lot worse the longer that you leave it. Do not pay high interest rates where there is no need, do not bury your head in the sand and hope it will come right, look up, look forward and be sensible.

Irrational spending is impossible to predict, but a more structured debt repayment plan can give you peace of mind, reduce the pressure on you and ensure that you do not fall into the same trap again. Or at least that is the plan!

The last 20 years has seen a massive increase in the amount of credit cards issues in the UK, not to mention a major pile of debt which has added up over the years.  Everyone seems to have the best intentions when they take out that new credit card, but few will ever payback the full amount, with credit card debt repayments often becoming a way of life for many. 

If you have any outstanding balances on your credit card you should consider a credit card debt consolidation program to bring your finances back under control.  Make use of the many interest free periods available on a range of credit cards, thereby reducing your interest payments in an instant and also allowing you to pay off more of the outstanding capital.

The credit card debt consolidation sector is now an established area of the finance industry which is showing substantial growth.  While you may ask yourself what is in it for the finance companies, you would be surprised how they are able to extract a £5 fee here a £5 fee there – fees which can add up across the years.  After the ongoing overdraft compensation situation is resolved we could well see the financial industry fight back, with many expecting the end of free banking, the end of charge free credit cards and more charges for the consumer to digest.

As Christmas approaches it has never been more important to get your finances into order and reduce your interest payments as much as possible.  Lower interest charges will give you the chance to reduce the actual debt owed, allowing you to be debt free quicker.

As consumers gear up for what promises to be a good, if not spectacular Christmas shopping period, it seems that we will soon see a stand off between the consumer and the retail sector.  Stuart Rose of Marks and Spencer recently pleaded with his retail counter parts to hold firm in the face of pressure to start early Christmas sales – forecasting that the consumer was ready to spend, and spend at full prices.  So who will win?

While this is the first time we have actually seen such a formal declaration from a leading member of the retail sector, in truth, this battle has been going on for decades.  Who will blink first, the consumer or the retailer?

In recent years we have seen a number of main retailers break ranks before the New Year’s sales and implement what have been drastic price cuts in some areas.  This year seems set to be little different, and the fact that the UK economy is forecast to decline over the net 12 months has some what handed power to the consumer.  Retailers will surely break rank as the competition heats up, and if the consumer is careful and willing to wait, there are surely many bargains to come.

So the moral of this post is, don’t be too hasty to get your credit card out just yet, because while you will save yourself interest payments the longer you wait, you also have the chance of getting your chosen items at a reduced price.   This year will be very interesting, now that Stuart Rose has most definitely drawn the battles lines.  Weapons at the ready!

Over the last few years the number of complaints about credit cards has mushroomed, with many customers querying why they are being treat differently from new customers who receive better rates.  While this is a fair point, the financial companies argue that they need an incentive to attract new customers, and that existing customers would probably have received a special short term rate when they joined up.  Fair point, but……

More and more credit card companies are offering 0% balance transfers for the life of the balance, something which is obviously not a short term incentive.  Many are now arguing that their interest payments and charges are being used to fund these offers to potential customers and they are losing out.  So who is right?

It basically boils down to the fact that if you don’t ask you won’t get! If you call you Credit Card Company and express your displeasure at the treatment you are receiving compared to new customers, there is every chance they will offer you an incentive if you threaten to leave.  Why would they risk losing you when they would need to advertise to replace you (at additional cost to themselves)? Why would they want to bring in low profit customers, and not be willing to meet their existing customers half way?

If you call your credit card company and query the rates available to new and old customers they will try to blind you with science, but if you threaten to leave they will soon wise up and speak to you in a language you can understand – pounds and pence! It won’t be easy, but don’t give up and ensure that you at least get something off them – no matter how small – or move!

As if we needed more proof that the credit crunch has left a lasting impact upon the UK finance market, the news that between 40% and 50% of all new credit card applications are being rejected is evidence enough.  It seems that the banks and finance companies are running scared, and perhaps taking a more balanced view of potential future problem accounts.  So what is really happening?

We are looking at a two tier effect with credit lines a little harder to come by and finance companies wary of taking on potential problem accounts as the economy looks to take a down turn.  While this situation will not last forever, there will be many observers in the Bank of England pleased to see finance companies taking a more sensible approach to credit.  So will this move effect consumer spending?

Whether or not consumer spending is materially affected in the short term is debatable with Christmas on the way, but it may well open the eyes of many consumers who possibly depend on moving from card to card.  Unable to effectively refinance their credit card debts, many may well need to pull in their belts in the New Year with a rise in debt problems expected.

 If ever the consumer was looking for a sign that credit may have got out of hand for some, now is it.  Whether the consumer will take any real action to alleviate the problem is another matter – we shall see.

In a move which will be rued by the credit card industry, the Lords have upheld an earlier decision to instruct a number of credit card companies to refund the cost of items which were bought overseas, but either did not turn up or were damaged.  In a move which was instigated by Lloyds TSB and Tesco Personal Finance they challenged the understanding of the Consumer Credit Act in relation to goods purchased outsdie of the UK

Under section 75 of the Consumer Credit Act, the credit card holder is insured for items with a value between £100 and £30,000 in the event of damage or non-delivery.  The action was brought about because of the recent upsurge in internet usage, which has seen a massive rise in the number of products purchased online from overseas traders.  The potential cost to the credit card industry could run into millions if not billions of pounds in the years to come.

The finance companies involved had tried to argue that overseas purchases were out of their jurisdiction and should therefore not be covered by UK regulations.  However, the counter argument that it cost more to buy goods overseas was brought up time and time again, and the fact that consumers should at least be able to expect the same level of cover seen in the UK.

It will be interesting to see how the credit card companies react – Will they increase charges? Will they ban overseas transactions? Or will they just take the ruling on the chin? What ever you think, it seems inevitable that the consumer will be forced to dig deeper at some stage.