The Financial Blog

Moneysupermarket.com say people should take more care when applying for a credit card, especially now that lenders have tightened their acceptance criteria…

Peter Harrison, credit card expert at moneysupermarket.com said: “It is imperative that people take care when applying for credit cards. Those that are too reckless in their applications may find their credit records fouled with a litany of failed attempts to secure credit. This in turn will only push them further down the food chain in terms of the products they will be accepted for. However, providers must also help us all out a bit, and give us a better idea as to how our suitability for products is judged.

“It is encouraging to see some providers making clear what is required for a successful application. At moneysupermarket.com we are always exploring ways to help people apply for the best deals they are likely to be accepted for, and with this in mind, we have a tool called SmartSearch which helps applicants sift through the many options to find the products they are most likely to be accepted for.”

For example, to obtain the Barclaycard Platinum Credit Card, one must:

• Have a good credit rating
• Have no history of bankruptcy
• Have not had any County Court Judgments (CCJs) or Individual Voluntary Arrangements (IVAs) registered against you in the past 5 years
• Have a history of managing credit commitments well i.e. have existing credit and at least 4 years of experience managing credit cards, loans, overdraft or mortgage
• Have always made payments on time
• Not already have a Barclaycard
• Have had a permanent UK address for 3 months or more
• Have a regular income of more than £20,000 pa
• Excluding a mortgage, have no more debt on credit cards or store cards than 10% of your income
• Be aged 21 or over

Just make sure you check ALL the details before applying, too many reckless applications could affect your credit rating.

Abbey launch market leading fixed rate mortgage

Abbey has launched a market leading 4 year fixed rate mortgage at 4.59 per cent and with 75 per cent of people in the UK thinking that the base rate will not fall any more now is surely the time to fix your mortgage rate???

Abbey say the demand for their variable rate mortgages has almost halved since the beginning of the year - In January, 28 per cent of those asked as part of Abbey Mortgages’ Remortgage Index said that if they were remortgaging tomorrow, they would opt for a variable product, in May, this was just 15 per cent.

Finally it seems borrowers are getting the message that now is the time to fix as rates are as low as ever. In May, for the first time since January 2009, the number of people planning to fix their mortgages when they remortgage has increased to 60 per cent up 8 per cent from 52 per cent (2). It’s a step in the right direction as lenders have been urging borrowers to fix now for a while.

While the Bank of England base rate is at an historic low of 0.5 per cent, 73 per cent believe that it has reached the bottom and can only rise in the longer term. This has renewed appetite for homeowners to secure a low fixed rate mortgage whilst they can, with demand rising two per cent since January.

The most popular mortgage choice is a two year fix with 21 per cent opting for this. Demand for longer term fixes is to turn a corner as borrowers look for indicators of when rates will rise again before locking in to a longer term deal. The research also shows 36 per cent of people opted for a fix of between 3 and 10 years, with the most noticeable difference is with 10 year fixes, where demand has doubled since January 2009.

Nici Audhlam-Gardiner, Director of Mortgages at Abbey commented: “Fixed rates are firmly back on the agenda for those looking to remortgage. The last few months of 2008 saw a huge focus on the Bank of England’s Monetary Policy Committee as rates shot downwards each month. As mortgage borrowers realise that variable deals will no longer fall further, it seems that many are now trying to work out when rates will rise again and how long to fix their rate for.

“Borrowers should avoid holding out too long before fixing as rates as low as these won’t last forever. On Wednesday, Abbey is launching two new market-leading 4-year fixes at 4.59 per cent with a £995 fee and 75 per cent LTV for those remortgaging or purchasing a new home. In addition, Abbey offers a range of competitive fixed rate products, our lowest rates in a decade, for those looking to secure their next mortgage deal including a 3-year fixed rate at 4.09 per cent, a 7 year fix at 4.99 per cent and a 15-year fix at 5.38 per cent all with a 75 per cent LTV, a £995 fee and a maximum loan size of £250,000.”

Abbey, Alliance & Leicester (A&L) and Bradford & Bingley savings (B&B) will all become known as Santander by the end of 2010. Abbey and B&B savings will be rebranded from the first quarter of 2010 and A&L will follow later in the year. The move will deliver a significant advantage for customers as they will be able to use any of 1,000 Santander branches from early 2010, rising to 1,300 by the end of 2010.

For more information log on to www.abbey.com, telephone                0800 389 9890         or visit your local branch.

www.Moneynet.co.uk ’s Andrew Hagger today commented on the fact that some of the best cash ISA rates are starting to be cut or disappear altogether…

We’re only two months into the new tax year, yet some of the more attractive cash ISA accounts have, in the last 7 days, either had their rates slashed or been withdrawn completely.

The Barclays Golden ISA for example, a best buy since the beginning of April has now had the 1% bonus withdrawn for any new accounts that are opened now. The table topping 3.61% AER has now been replaced by a more mediocre 2.58% AER.

If a fixed rate ISA was going to be your tax free savings choice then you’ll have to cross the Halifax Direct Reward ISA off your wish list as it was pulled from the shelves on 30th May. This was a good all round ISA product in that it paid 3% fixed for 12 months, allowed you to transfer in previous years allowances and also offered 4 penalty free withdrawals during the year.

First Direct has chopped its ISA offering too, the e-ISA account which paid 3.06% has been withdrawn and replaced with a far less attractive 1.98% fixed rate product.

It’s starting to look as if some providers may have reached their targets for ISA deposits already and are content to offer a poorer deal to those who have been slow off the mark.

So if you haven’t invested your ISA cash for 2009/10, even though there are still 10 months still to run in this tax year, it may be prudent to make your choice sooner rather than later before some of the other top deals disappear too.

Norwich and Peterborough Building Society have launched a new credit card offering 0 per cent on balance transfers for 12 months and 0 per cent on purchases for 3 months. Typical APR, variable, is 15.9 per cent…

Smart shoppers who like the security of paying for items by credit card will be able to capitalise on the year-long interest-free option, when they transfer the balance from another credit card. A 3% balance transfer fee will apply.

Customers who pay their balance in full and on time every month can enjoy up to 50 days’ interest-free on their credit card purchases.

Andrew Clare, N&P’s head of banking, said: “We are delighted to be joining forces with MBNA and I am pleased to be able to offer our customers such an attractive credit card offer.”

Greg Reed, president of MBNA UK Card, said: “MBNA is the market leader in affinity card marketing and N&P credit card cardholders will benefit from our experience in this market.”

Customers can apply for a new N&P credit card online, via the N&P website, in any one of the Society’s branches or by calling the N&P Contact Centre on 0845 300 2511. Whichever method they choose, customers can have an instant decision on their application.

This is a great offer but why would you bother applying through Norwich and Peterborough when you can get exactly the same deal through MBNA directly?? What’s in it for the consumer?

Tesco Travel Money

• Currency and travellers’ cheques from over 60 countries

• Buy online, over the phone or instantly in over 120 stores.

• Buy travel money now (new window)

 Credit crunched Brits seeking bargain breaks…

• More than half (54%) of Brits are taking a holiday abroad this year
• Almost a third (29%) taking two or more overseas breaks
• But bargains top the priority list when choosing a break
• And a third (34%) are spending less than last year
• People in the Midlands are the top holiday bargain hunters
• Londoners are the biggest spenders

Despite the doom and gloom, new research from Tesco Travel Money reveals that people are still prioritising holidays over other luxuries.  More than 25 million of us are planning a holiday abroad in 2009 with as many as 14 million having two overseas breaks or more.  However, with belts tightening across the UK, a third (34%) will be spending less than last year, with 12% spending significantly less.

British holidaymakers are pulling out all the stops to get a cheaper break: 

• More than half (54%) are cutting back on food and drink costs
• More than two in five (43%) are spending less on gifts and duty free
• A third (33%) will avoid eating out at all by booking a self catering break
• Camping and caravanning is seeing a resurgence, with a third (30%) staying in cheaper accommodation such as a tent or caravan to save some money
• A third (33%) will even be filling their suitcase with essentials like teabags and breakfast cereal to save some cash

Bargain breaks are in vogue in 2009.  Whilst the weather is still a key factor, the top five holiday priorities this year include getting a cheaper deal overall and opting for free accommodation through family and friends.   And we’re all sticking to a budget this year, three quarters (76%) are planning their holiday spending before they go and 14% can’t afford to spend a penny more than they’ve planned.

Across the UK, the research from Tesco Travel Money reveals the biggest holiday bargain hunting region is the Midlands.  They spend an average of £348 - £56 less per person per week than the UK average, and a huge £147 less than holiday big-spenders in London.  They are also better budgeters than other regions, eight in ten (80%) Midlanders will plan spending before they go and one in six (16%) won’t spend a penny over their holiday budget whilst away.  In contrast, Londoners, who not only spend more on their holiday, also take more overseas trips than any other region and are less likely to set a holiday budget.

Yet whether making frugal cutbacks or marching on regardless, one area where all overseas holidaymakers are failing to make savings is with their holiday cash.   Less than half shop around for the best deal for their foreign currency (just 48%) and more than a quarter (26%) go for convenience over rate.

A Tesco Travel Money spokesperson said: “It’s great to see that holidaymakers are pulling out the stops to get value for money and making sacrifices to ensure they get their two weeks in the sun.  But they’re still missing a trick with their holiday spending money. Getting a good deal is easy. By choosing a company like Tesco - consumers can pick up great value currency with their weekly shop in one of more than 120 stores across the country”.

Tesco Travel Money is commission-free and is available at bureaux de change at over 120 Tesco stores, seven days a week, around the country, by phone on 0845 600 66 67 and online at www.tesco.com/finance

For the convenience of home delivery, go online at www.tesco.com/finance to receive Travel Money to the comfort of your own home.   To help holidaymakers budget, they should also consider mixing their purchase of currency with a cash passport.  At any of our in store bureaux, you can load €uro or US Dollars onto a card - so you can add a little on each time you shop.