Cash, Cars and Babes

Alliance & Leicester have found that UK consumers are expecting to have less spare cash in the next six months - more than a third expect to see less disposable income, mainly blaming household costs, fuel and the cost of food.

The advice gven would be to see how your finances are at the moment, and see where they can be improved. The poll found that 42% of consumers are budgeting, 45% are shopping around for better deals and nearly 40% are saving electricity by turning off lights that aren't being used.

Its good to see that many of us are making changes to try and improve our finances. I expect there's a long way to go though.

Back in April, the ruling against bank charges fell in the OFD's favour, meaning bank charges were deemed to be unlawful. On the 22 May 08, the banks were given the opportunity to appeal against the decision. There have been worries that if banks chose to appeal, which was highly likely, the court case would continue until 2009. However, it has been decided that the debate has to be resolved by the end of 2008. But, if the banks succeed in overturning the first ruling, the case would end in the bank's favour. Ugh.

The banks appeal is likely to be heard this autumn. It has been agreed that if a fair level of charges is not agreed to, the issue will go to High Court before Christmas for a ruling. Thats ages away!

Secured Loans are becoming far more attractive to homeowners, compared with unsecured loans. The former appear to be a thing of the past in comparison to homeowner loans, due to the significantly lower interest rates which are applied to them.

It has been found that the average rate charged on am unsecured loan of £15,000 is 8.4%, which, when compared with the APR applied to a secure loan of the same price (5.9%) is rather a susbtantial rate.

In times gone by, secured loans were seen as a last resort for homeonwers. But nowadays, when comparing the interest rates on the market, they are now appearing far more attractive.

Search online to find and compare secured loans, and find which one most suits your circumstances. But be aware, that by securing a loan against your home, if you dont keep up with your repayments, repossession can occur.

After ceasing the grant of new mortgages a few weeks ago, it seems First Direct (a division of HSBC) have joined in with getting the ball rolling once again, by enabling new mortgage applications to be made.

It seems like mortgage rates are appeasing, slowly but surely, and time will tell just how much the situation improves.

As of Tuesday 27 May 2008, the ability to perform cash transfers over the telephone and internet will be enabled, speeding up the process of money transfers. Last year, the delays in transfers, of up to 4 days, made the banks a whopping £30m in interest. The new scheme will improve the speed of delivery, but will begin slow. Customers will be able to make one-off payments up to a maximum of £10,000, which will leave their bank and arrive at the destination bank the same day.

The scheme will extend to standing orders as of the 6 June 08. In 2007, there were 124million internet/telephone payments made, averaging £303. There were also 347million standing order payments made in 2007, expecting to rise to 422million in 10 years, at an average value of £321. To prevent flooding of the new system, banks will enter the scheme at different times.

The 13 banks included are Abbey, Alliance & Leicester, Barclays, Citibank, Clydesdale & Yorkshire Banks, Co-Op, HBOS, HSBC, LLoyds, Nationwide, Northern Bank, Northern Rock and the Royal Bank of Scotland Group.

A website has been set up to allow people to check whether their bank has joined the scheme.

It seems that following the initial decision made back in April, the banks are likely to appeal against the ruling, and against the decision that the Office of Fair Trading (OFT) can scrutinise OD charges.

As of 21st May 2008, the appeal is "under active consideration" according to a banking source.

Its argued that an estimated £3.5 billion is raised by banks, each year, by charging customers for unauthorised overdrafts and reversal of direct debits etc.

But what is worse for those that are trying to reclaim the charges, is that if an appeal is granted, the case could be dragged out until next year. Which means more hanging around waiting to see if the money can be reclaimed. In some cases, mine included, the banks take up to £30 off customers who go over their agreed OD limit. Thats EVERY time you go over your limit. So if you havent checked your account for a while, you didn't realise how much money you didnt have, and you need to buy food or pay a bill, a maximum of £30 is taken off you every time you add to the OD. What I found with my bank as well, is that on top of some charges going out during the month, some accumulate until a specified date (usually towards the end of the month..), and this total charge is debited in one clean swoop. Sometimes this has been as much as £150, which, by the time they take it off me, I dont have, putting me past my limit again and eligible for more charges. Its on ongoing cycle, especially when in a bit of an employment drought and a recovering student. And Im not the only one who thinks this is getting ridiculous.

Now you tell me if that's fair.

Alliance & Leicester have the right idea, charging a maximum of £5 for unauthorised transactions. I would switch, except I dont think they would have me in my current situation.

Sounds like a dream offer for someone who is looking into buying a very pricey home... And some people are getting that sort of discount, due to the current credit crunch. Buyers are getting these opportunities, particularly in London, snapping up homes for up to £1million less than the asking price.

One financial trader bought their 5 bedroom Kensington home for £3.91million, 22% less than the asking price of £5million. If you have the money, thats one heck of a deal. It shows how the shortage of buyers, as a result of the credit crunch, are forcing vendors to agree to massive price cuts. Savills, a London estate agent, said that homes in central London had fallen in price by 1.5% in the first quarter of this year, following a 2% fall in the last quarter of 2007.

A spokesperson from Assetz, a property investment firm, said that they expect prices to be down 7% in London this year, giving a major buying opportunity for those considering that area of the UK. The only risk being if mortgage rates go too high, but the mortgage market is gradually improving. The spokesperson believed it will take until September for the market to be normal, so summer is an ideal time to snap up a bargain.

Thats if properties over £1million are classed as bargains...

On 1 May 2007, new regulations were introduced to protect the UK's storecard holders. In March 2006, the Competition Commission concluded that cardholders were being ripped off at least £55million a year, due to the interest rates, premiums and other charges store cards impose.

Since 1 May 2007, storecard issuers who charge APRs of more than 25% must:

• Include rate warnings on statements, warning holders that cheaper credit is available elsewhere
• Dispplay a summary box listing interest rates and penalty charges. This must also warn of the dangers of paying minimum monthly repayments

It wasn't insisted that store card issuers should cut their interest rates.

The regulations don't seem to have done much since they were employed. Since last year, Argos, Debenhams, IKEA, and M&S Money have increased their APRs, the majority having remained at the same APR. Overall, the average APR charged has dropped a measley 0.7% from 25% in May 2007, to 24.3% today. Credit cards average at 16.5% - much cheaper.

They can be beneficial to sensible users though - interest free credit can be available for full payers, loyalty and reward schemes, discounts, promotions and special offers.