It may be long before the judges finally decide in favour of consumers in the OFT’s high-court case against seven high-street banks, but the good news is that consumers don’t have to wait for the judgement to be able to avoid getting fleeced by banks and credit card companies. Certainly the government has not introduced some new consumer-friendly legislation, but even then avoiding the greed of credit card companies has now become a possibility for consumers such as you. This comes on the back of the OFT’s recent announcement that it will soon be launching a credit card comparison website, especially designed keeping in mind the needs and requirements of consumers. The site will definitely benefit consumers because it will have everything that consumers need to know about avoiding the potential pitfalls of credit cards. It will also help consumers in understanding all the various technical terms and jargon that credit card companies usually print in their offer document which can mislead consumers about interest rates and other fees and charges.
In its announcement, the Office of Fair Trading (OFT) has said that the proposed website will have an automated online tool that will help consumers select the most consumer-friendly credit card that might be available. For this, consumers will just have to enter their basic details and needs and requirements in an online form. The software supporting online credit card comparisons will then automatically search for the best credit card deals and make them available to consumers. The OFT says that the website will prove very useful for consumers who do not have time to search for the best credit card deals or those who just ignore this vital need and end up paying the high rates and charges mandated by credit card companies. The OFT expects that the website will be a huge hit amongst consumers looking for cost-effective credit card deals.
So, should you wait till the launch of the OFT’s credit card comparison website? Well, not necessarily because credit card comparison websites are already there on the web, quite similar and maybe even better than the one proposed by the OFT. However, I would also recommend that you exercise caution because not all comparison websites that are currently available can be classified as reliable. Some may just be acting in collusion with card companies trying to sell expensive credit cards to gullible consumers. Keep away from such websites if you do not want to end up with huge credit card debts.
Posted on November 26, 2018
Shopping, dining and holidaying in overseas locations has certainly been made a lot easier and hassle free with credit cards, but if you think that your credit card company is doing social service, then you are hugely mistaken. You may not be aware but the truth is that credit card companies make quite a lot of money every time you swipe your credit card at an overseas location. What they do is that they charge you extra for every overseas transaction made on your credit card, usually in the name of foreign-exchange (forex) loading. This certainly sounds quite innocuous, but the truth is that it can easily inflate your credit card bills by a substantial amount.
If you use your credit card at an overseas location, you could also be charged extra in the name of “dynamic currency-conversion fee”. For example, if after having your lunch or dinner at a restaurant, the waiter asks you whether you would like to complete the transaction in pound sterling, you can be sure that you will be charged extra in the name of “dynamic currency-conversion fee”. When you give your nod to the waiter, what happens is that you are charged at a more profitable forex rate, something that adds around 4 percent to your credit card bill. So, when you come back home, don’t be surprised when you find that your lunches and dinners have cost you a lot more than expected.
The charges are even more when you withdraw cash from your credit card at an overseas location. When you do so, your overall charges include both a transaction processing fee and interest that you are required to pay on the cash withdrawn. To avoid these charges, you may have planned to use your debit card provided with your savings account, but what you are probably not aware is that this also won’t help much because you will still be required to pay the forex loading charges. You certainly won’t be charged interest on overseas debit card cash withdrawals, but since the transaction charges are more or less the same, using your debit card will only offer limited benefits.
So, how do you avoid this type of overcharging by credit card companies? Well, the best remedy would be that you limit your credit card usage when overseas. However, since this is often not possible, I would recommend that you opt for a credit card that does not charge you in the name of forex loading and dynamic currency-conversion fees. Spend some time on reading the fine print and comparing available credit card schemes and soon you will be able to select a credit card thats best for overseas transactions.
Being able to use credit 24/7 is certainly a good thing to have, but since you can easily end up being addicted to it, it is important that you first consider the pitfalls of using a credit card. If you do not limit your credit spending, chances are high that you will accumulate debts way beyond your repaying capacity. Inability to pay off your credit card debts in time will eventually result in excessive penalties, fines and interest rates, all of which can prove disastrous for your financial health. In the worst case scenario you might have no other option but to file for bankruptcy. All this makes it necessary that you avoid misusing your credit card and start taking steps that might help in mitigating the damage already done.
The most foolproof way of avoiding excessive credit card charges is to opt for a credit card that has the least of the hidden credit card charges such as late payment fines, overdraft fines, balance transfer fees, etc. This would require you to read the fine print of all the offers that you might have short listed depending on your specific needs and requirements. Once you go through the fine print, you will know exactly which offer best fits the bill, something that will make it easier for you to select the most appropriate credit card.
Your troubles however won’t end even after selecting the most suitable credit card because a lot also depends on how you eventually use your credit card. If you overdo your credit usage, even the most cost-effective credit card will fail to provide an escape route from the looming financial disaster. This is why it is necessary that you have a look at your own credit buying habits and check if it matches your repaying capacity. Blaming your credit card company will never solve your problems, especially when it’s you who is solely responsible for your bad financial health.
For avoiding the excessive credit charges and deriving the best possible benefits, you need to shop around a bit and compare the terms and conditions of the available credit card schemes. You can do this easily through product comparison websites that allow you to compare all the different types of available credit card deals based on your own criterions. Just by spending a few minutes on these websites, you will easily be able to locate the deal you might have been looking for all this time. Your bad financial health and credit problems will then be a thing of the past.
There is certainly no denying the usability of credit cards, but the problem arises because more often than not we fail to notice the danger signs that continuously prompt us to curb our credit spending. Another factor that is often equally responsible for our bad financial health is the profit-centric mindset of credit card companies, most of whom will go to any length to improve their balance sheets even if they have to do that at the expense of their customers. A combination of both the above factors can prove disastrous and this is why you need to have a look at all the different types of hidden costs and charges that credit card companies often force upon their customers.
The easiest way of ruining your finances is to exceed the credit limit on your credit card. If you do this, you are most likely to be forced into paying a fine, although some credit card companies might also increase the interest rates on your credit card. In both cases you will end paying much more than you might have bargained for initially, something that can easily spark off your financial ruin. So, the next time you swipe your credit card, make sure that you are still under your sanctioned credit limit and are not using the costly overdraft facility as might have been provided by your credit card company.
Hidden credit card charges also come into play when you overlook the interest free period and start believing too much in the minimum due payment system. Of the two, the minimum due payment system is probably the one that contributes the most to the confusion and this is why you need to understand it clearly. You might not be aware but the truth is that in a minimum due payment system you just pay the minimum amount. As such, debt keeps accumulating and very soon it balloons to such an extent that you are no longer in a position to pay it back. You then enter the vicious cycle of credit card debt and are completely at the mercy of your credit card company.
Hidden credit card charges are certainly an irritant, but the good news is that you can avoid them easily just by following some expert tips and suggestions. The best way is to thoroughly read the fine print, something that will go a long way in ensuring that the offer does not have any unmanageable terms and conditions. Using your credit card will then no longer be a nightmarish experience for you.
Not very long ago, lenders were more than willing to open as many credit accounts as you might have demanded, but since the subprime crisis, the finance market dynamics have taken a complete U-turn. Not wanting to face a similar crisis situation, lenders in UK have become quite wary of opening new credit lines and what is even worse is that some of them have gone to the extent of closing existing lines of credit. However, you need not worry too much because in UK’s financial market, there is one credit option that has still not lost all its sheen. Yeah, you guessed it right, I am talking about the 0 % credit card debt transfer deals that are still being marketed quite aggressively by credit card companies.
It might be difficult for you to believe this, but the fact is that there are currently around a hundred 0 % credit card debt transfer schemes available in UK. Something that I find even more surprising is that in spite of the subprime crisis, credit card companies seem to be virtually begging to take over your debts and transfer it to a new account. Some experts criticize 0 % transfer deals saying that they are just innovative strategies to lure in new customers, but I do not personally agree to such accusations because I believe that it’s the card holder who benefits the most from a 0 % transfer deal. Benefits accrue to credit card companies as well in the form of transfer charges and processing charges, but if you compare these with the 3 percent monthly rate that is usually charged on the outstanding credit card debts, you will realize that the initial transfer and processing charges are a small price to pay.
If you are not too sure about the potential of 0 % transfer deals, I would like to tell you that they are the easiest ways of slashing interest charges that you pay on the outstanding amount of your existing credit cards and store cards. The application process is quite easy and all you need to do is request your preferred card company to open a 0 % credit card account in your name. After approval, you can move your exisiting debts and shift them to a new repayment plan wherein you will not be required to pay interest for the agreed period. This interest-free period can range anywhere between 3 to 15 months depending on the card company and this is why you especially need to consider this while assessing 0 % credit card debt transfer deals. Opt for a deal that offers the maximum interest free period and soon you will be on your way to financial freedom.
Do you have a Credit Card where the contract was issued before the 1st of April 2007? If so, you may want to find out more about Personal Finance Claims’s new credit card service.
If the contract which you signed when your credit card was issued is found to be flawed or unenforceable, here’s what you may be able to claim for…
# You may be able to claim interest paid on any oustanding balances
# You may be able to claim the repayments you have made
# You may be able to claim to clear the outstanding balance on the card