Finance Blog – Loans, Mortages, Insurance

How to find a bank that suits you

Posted by luqman - 28/08/11 at 05:08:58 pm

If you are looking for a bank account, mortgage or credit cards that are right for you, there is a world of options out there to choose from. Choosing the right one is just a few carefully considered steps away, so take your time to look at the options and you could save yourself a headache later!

First of all, think about what you want from a bank. It may seem obvious and straightforward but it is easy to get swayed by tempting offers, hard nose sales techniques and banking jargon. What you require from a bank account is personal to you and you have the right to make the final decision.

Once you have decided your criteria, don’t get persuaded by flashy deals and offers under any circumstances. After all, the bank may offer the very best in air miles deals, placing the world on a plate but if you don’t have a passport and you are afraid of flying, it’s doubtful that you will ever get your money’s worth.

You may be looking for a first bank account, in which case your criteria could be pretty straightforward. You will need an account to have wages paid into and a branch or cash point on your local high street to withdraw your money.

However, you may want to hold your current account and credit card at the same bank for your convenience and you should look at the deals and offers from the various providers.

Often, banks that perhaps have fantastic deals on current accounts are not so good on savings or mortgages. It would be wise to research the best deals for your circumstances rather than throw all your accounts into the proverbial one basket for convenience.

You could end up losing out and in the age of Internet banks and financial services, transfers and financial transactions are easily completed online without the need to visit the branch.

If you have been a loyal customer with your bank or credit card for some time, what do you do when things go wrong? How do you complain and get the matter resolved without having to switch to another bank? Here are a few points to make sure you are heard.

Decide what you want, the nature of your complaint and the action that you require. Get your information and details of account numbers etc. and talk to your provider.

From talking to the bank or call centre, follow up in writing with all the facts including who you spoke to and when and include copies of documents if necessary.

At all times, despite the frustration of being put through from one department to another, stay calm and keep to the point.

Do not start adding in other complaints that were not on your original complaint. Also, keep records of names, times and details of any conversation.

From the outset, make it clear what you would like a resolution to the issue. Do you want compensation, refunds or merely an apology for the mistakes and problem? If you are looking for compensation, keep the amount realistic. If you chase for too much your complaint will not be taken seriously.

If your issue is unsolved after eight weeks you can then take it to the ombudsman who will deal with complaints for banks, building societies, credit cards and other financial providers.

Lastly, if you have followed the appropriate procedures to no avail, know when to give up! If the ombudsman rejects your claim, you will never succeed.

In this case, we go back to the start of the process and perhaps your best option is to change your bank account and look for a provider that can offer what you need from an account.

Why does a good credit score matter?

Posted by luqman - 25/07/11 at 08:07:46 pm

Like your family, you can’t choose your credit score. However, that’s where the comparisons with mum and dad end, as there’s plenty you can do to improve, maintain and find out more about your score – meaning you’re more likely to be accepted for credit cards, loans, mortgages and more.

No matter what you do, you’re tied inseparably to your credit score – it follows you round and dictates what you can and can’t have, whether you’re applying for credit, taking out a mobile phone contract or even renting a home. For many lenders, it’s the bottom line when it comes to making a decision about whether to accept your application.

Finding out your score
Due to the current economic climate, chances are you’ve seen plenty of adverts from firms offering to let you know your credit score. If there’s a free trial on offer, it’s worth considering taking it up, especially if you’ve got little or no idea what your score is at present. Of course, it’s up to you whether you want to continue with a paid subscription once the trial has run out.

Improving your score
While knowledge is power, being aware of your score is only half the battle. If it’s proved to be a nasty shock, you’ll want to look at ways of improving your creditworthiness. This isn’t an exact science and opinions differ on the best ways to boost your score. However, some obvious steps are bound to have some effect. If you’ve recently moved home, get on the electoral roll at your new address as soon as possible – checking these details is usually one of the first steps of a credit check.

Making sure you pay on time with your existing credit agreements is key, as is keeping within your credit limit. Opening several accounts at once is also considered a bad move, as lenders could be concerned that you’re set for a borrowing binge.

Maintaining your score
If you’ve got a good credit rating, don’t be tempted to rest on your laurels – a few bad moves and things could change quite quickly. Maintaining a good score also means that you’re more likely to have access to the best rates and the best credit card rewards, meaning you’ll pay less for borrowing the money you need.

Ultimately, being aware of your credit score and how you can keep it in good shape should be a lifelong commitment – which, to return to our original point, means you should treat it like your wife or husband rather than a blood relative.

Good debt vs. bad debt

Posted by luqman - 11/07/11 at 06:07:36 pm

Just about everyone will have to borrow money at some stage of their lives. Most wishing to own their own property will borrow on a mortgage but even those looking to acquire a car may take out a personal loan or lease plan.

Sometimes there are great deals around that are hard to decline. Take, for example, many of the low cost credit deals offered by car manufacturers.

These are a great way to get a new car at very affordable rates of interest.

Deals like this can be classed as ‘good debt’ since they are amongst the lowest cost way to borrow one can find. Especially if you already have the cash available where you can invest in a high interest savings account and make more on the interest than you lose on the loan charge!

The key with any form of debt is making sure that the payments remain affordable even if personal circumstances change. That means if the hours available to work are reduced and the net family income drops, the payments are still affordable for at least six months.

Easy credit is now a thing of the past. The number of providers has reduced dramatically since the early ‘noughties’ and those that are in the market are looking for good quality customers.

That means borrowing whilst your credit history is in tip top condition and you have a provable source of income. Without either of these, the rates and terms on offer may be less attractive.

So, good debt can be defined as debt that is affordable and comfortably repayable within the available family income.

But circumstances in these uncertain times can change fast meaning that what was once affordable now becomes unaffordable.

When debt gets out of control it eats away at family life and relationships. Cutting spending and making savings can generate some spare income each month but more extensive action may be needed if payments are higher than free income.

If there are just one or two lenders (for example a mortgage loan and car loan) then it should be easy to speak with them and try to arrange a reschedule of the payments over a longer period of time.

Provided you are up to date with the payments then most lenders will listen sympathetically to a request for changed payments provided the proposal is sensible.

Even if you have started to miss a few payments, it should be possible to get a payment plan agreed that allows the family to live on a day to day basis without the fear of repossession or legal action.

If there are a number of debts and it is not clear how to move forward, it can pay to enlist the help of a specialist debt management company. As they deal with lenders every day and know what will be acceptable, they can help drive the best deals to get you back on track.

It may be worthwhile paying a small fee to have help sorting out your finances rather than struggling on and getting into a worse mess.

There are also a few good debt management websites that can help shed light on what is available to those with debt problems. You can read more for help on sorting out your debt problems at moneysupermarket.

Eradicating your debts on your own terms – Taking your own financial responsibilities

Posted by luqman - 09/07/11 at 08:07:32 am

Getting out of your high interest unsecured debt and staying out of debt is not an easy task. Chances are high that if you’ve misused your personal finances and your credit cards, you must have amassed a huge amount of credit card debt. Whipping your plastics during every little purchase is not the way to go if you want to remain financially fit throughout the year. But as most Americans are not much concerned about their finances, they commit the same mistake time and again. It is easy to get out of debt by seeking help of professional debt relief companies and by taking your own financial responsibilities. Have a look at some do-it-yourself steps to get back a firm grip on your finances.

• Stop increasing your credit card debt: You must be aware that credit cards may seem to be attractive options to fulfil your dreams when you’re running short of money. Credit cards are the actual reason for the entire debt burden throughout America and therefore you have to make sure that you use cash instead of credit while buying things. The more you use your credit cards, the more you will drown yourself in a sea of debt. Lock your cards and carry cash with you.

 

• Keep a track on your expenses: The idea of writing down what you spend is a concept that may sound baseless to most people but this is a worthy concept of dealing with your debts. Write down on pen and paper the amount of dollars you earn in a particular month and the amount that you spend from it. Avoid more debt by staying within your spending limit and by following a frugal budget. Try to distinguish between needs and wants and concentrate only on the wants.

• Negotiate with your creditors: You can negotiate with your creditors on your own instead of getting help from professional debt help companies. If you feel that the professional companies can only help the debtors pay off their debts, you’re grossly mistaken. You can also negotiate with your creditors on your own and tell them about your personal financial hardship.

 

• Start making the monthly payments: As soon as you negotiate with your creditors, they will ask you to make a single monthly payment to them. Make sure you manage your personal finances so that you don’t fall back on the monthly payments and hurt your credit score. If you make the monthly payments on time, you can get out of debt sooner and become debt free.

Thus, if you want to delete your financial worries, you must make sure you follow the tips mentioned above. It is always better to manage your finances on your own than rush to professional companies for help.

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How to Eliminate Credit Cards

Posted by luqman - 16/06/11 at 05:06:31 pm

For a lot of people getting credit cards can be something that is great to have especially in an emergency or they really can be a huge annoyance.  It can help you when you most need it and then when you can’t afford them they can be a nightmare to pay back again.  They can actually turn your finances into a worst state than ever.

Getting a credit card is one thing trying to repay them again is something that you can rarely do even if you are making a lot of money.  The repayment interests are a lot to handle and for many of us we can’t repay them before; people realise that once they get to a certain point that they have to get rid of that debt and eliminate the credit card debts before they do anything else.  You don’t have to worry these debts are actually less hassle once you start repaying what you owe.

The one thing that you are going to need to get has to be scissors and a shredder.

Now to begin with elimination the credit card debts; the first step that you can take has to be to stop the cards.  Cancel them all completely so that you can start cutting down and eliminating the debt; wherever you have gotten the card from cancel it from there and confirm that you are the card holder so that you can cancel the debts.

You could even try hiding the card somewhere that you know will never be able to get to it again; putting it into a deposit box or even give it to a friend or family member and that stops you from using the card at all.  If you don’t want to hide it then fair enough but when you are going out then you really don’t want to go out with the credit card otherwise you are going to be tempted to spend on the card.

The best way that you can do to stop your credit cards will be to get yourself a pair of scissors and a paper shredder and cut the two up and then shred it if possible.  That way your credit card is gone and it is not coming back again; this will really help you when it comes to not relying on credit cards to help you out of a tricky spot every now and again.  It might help you to gain some responsibility over your finances.

Some tips to help you get rid of your credit cards.

You should get yourself a debt card – this is your bank card in some places, with this you buy something and the money is going to come straight off your bank account so that you are paying outright but not with money in hand but what is in your bank account.

Even if you don’t have enough money then your over-draft will cover this or the bank covers this for the moment if you have been a very loyal and good customer and know that you are going to have the funds in your account soon.

You could also use cash, this stops you from getting any overdrafts and if you don’t have the money in your purse then you won’t spend more.  This also reduced the risk of getting any kind of fraud done to you when you avoid using credit cards.

You need to get yourself a budget, something that is going to help you to limit what you’re spending every month and something that is going to stop you from over-spending on things that you don’t need.

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