Banks have increased their onslaught of credit card customers to offset losses due to increases in bad debts and the cap on overdraft fees.
“The tactics used include the magically appearing annual membership fees, charges for pseudo-cash products such as credit-card cheques, and hidden catches in balance-transfer deals.
The banks have been playing a sleight-of-hand game with their consumers for years. Now it has stepped up to levels that catch most consumers off-balance. In fact, many consumers build up hundreds of pounds of ‘hidden’ charges before they catch onto the bank’s ploy.
One of the biggest tricks is the five pound scheme. The credit card has no minimum balance each month. Instead of a minimum monthly repayment the customer pays the monthly interest, plus premiums for payment protection insurance, plus fees, plus £5. However, this means that the average person never actually repays any of the capital from one year to the next.
Another scheme pays of the least expensive debt first. The more expensive debts accrue more interest for longer periods – and of course, the interest is often calculated on the full total of the purchase until paid in full. This means that all the small purchases are repaid quickly, leaving the large payments languishing on the card for months, or years.
Credit card, and most unsecured loan debts, have higher interest rates than personal loans. Some unsecured loan debts are currently as high as 25%, and expected to increase at least one more time this year.
There are many borrowers who have taken out payment protection insurance on their loan, not knowing that it was not a mandatory requirement. Although lenders may pressure you into taking out payment protection insurance, they do not tell you that most loans do not require you to have payment protection insurance.
Payment protection insurance is an insurance policy on your loan where you pay a specified amount each month for the purpose of the event that you may not be able to make your monthly repayments due to illness, an injury, or an involuntary redundancy. If this does occur, the payment protection insurance should cover your expenses, and with some policies the insurance will also pay of additional expenses. This can be reassuring for some borrowers, and especially reassuring for lenders, as it is a form of security ensuring that they will receive payment on the loan.
There have been reports, however, of borrowers who have been pressured or led to believe that the insurance coverage was a requirement, only to find out that the payment protection insurance that they currently have in place is unsuitable for their loan or unnecessary. This can happen if the lender is not completely honest with the borrower, or the borrower is not made aware of the insurance. There are some cases where the borrower does not realise they are paying for the payment protection insurance until they are far into the repayments of the loan. That is why it would be best that you read over the loan documents carefully before signing, and asking questions for any unknown charges.
If the lender does in fact require that you take out payment protection insurance, you may want to shop around for standalone policies. You may find that there are some policies that are cheaper, and even better than those your lender is offering.
The UK is a country that benefits from one of the most comprehensive and generous national health insurance schemes in the world. Everyone is entitled to have their health costs met and a high standard of care provided. And all of this will be paid for by the economy at large. Therefore, you may ask yourself if there is any point in taking out private medical insurance when such an excellent service is available to most of us, free of charge.
Well, if you are considering taking out private health insurance, it is useful to know that hundreds of thousands of others in the UK are just like you. And because no one would choose to pay for something that they can get for free, there must be some perceived benefits to private health insurance.
One of the main benefits is the speed at which you will be given care. While the NHS has severe waiting lists for many procedures that are extremely time sensitive and important, you will probably get your treatment very much faster if you have private insurance.
Another benefit is that more procedures will be covered. While the NHS decides which procedures to provide to patients and which are either not necessary, or not justified by the cost, private health insurance can guarantee you access to all of these treatments.
Choice is another important factor when choosing to take out private medical insurance. While the NHS will offer standard treatments, more and more people are choosing to opt for complementary therapies or treatments that have not yet become mainstream. These can include therapies that are often regarded as alternative. If you would like the option of choosing the way in which you treat your illness, you will have more choices if you have private health insurance.
If you are up to date on the insurance products that have been gaining popularity in the market place recently, you will be aware of income protection insurance. Income protection insurance protects your income in the event that you cannot work for some reason. If you are thinking of taking out income protection insurance however, you will have to think hard about the type of insurance that you want and the be fully aware of the risks that are covered and those that are not.
The two most common risks that you can get cover for are unemployment or disability. If you lose your job, you will require unemployment insurance to maintain your income levels until you manage to find a new job. This is important for people who have a lot of outgoings such as a mortgage and are afraid that they may lose their job and will not be able to keep up with their repayments.
The other common risk is disability cover. This means that if you are injured or suffer some type of accident that means that you are unable to continue working and earning the income that you currently earn, you will be covered and your income will be maintained while you recover. You can usually get insurance to cover one of these two risks, or a joint policy that will cover both risks.
It is important to remember a few points however. The first is that the insurance will only apply for a limited time. You must look at each income protection insurance policy carefully to see how long it will cover you for if you are to suffer a drop in income. Another thing to remember is that you will not be covered if your income loss is due to your own fault, such as quitting your job or being fired for misconduct.