The Financial Blog

In a move forward for transparency with banking charges HSBC are to introduce a warning message on their cash machines that let people using them know if the withdrawal they are attempting will take the over their credit limit.

3,500 machines around the country will be affected. HSBC states that is a move to support their wider HSBC Fair Fees Policy for overdrafts.

Although customers will be alerted, the cash machine will not actually stop you from withdrawing funds and receiving the charges.

Looks like one more (albeit welcome) move to try to placate customers prior to the big showdown over unfair charging early next year.

UK banks are lending money to each other in the Interbank money markets at an interest rate of nearly 6.9%. The interest rate is much higher than the current Bank of England base rate, which was kept at 5.75% yesterday.  Professor Willem Buiter, who was a member of the Monetary Policy Committee, said UK banks were in crisis because of their exposure to bad loans in the US. He said this had made them reluctant to lend to each other, which had raised interbank lending rates.  He said the banks were in a state of “fear and loathing” that could increase standard mortgage rates as well. 

Some banks are concerned that others may not have revealed multi-million pound losses in the US sub-prime mortgage market. Surely the longer this lasts the more likely it is that UK mortgage and loan rates on offer to the public will be affected? Just this week five lenders have increased their savings interest rates by half a per cent – this is without the Bank of England increasing the base rate.  Ray Boulger from the mortgage brokers John Charcol said; “If the current Bank Rate/Libor spread prevails for much longer, we may see some lenders increasing the cost of their Bank Rate tracker mortgages, and mortgages offering a discount off their standard variable rate.”

New research reveals that customers with mortgages are being charged up to £50 for every missed mortgage payment.

The highest charge is levied by GMAC at £50, with Coventry Building Society charging £20 and Cheltenham and Gloucester £10.

Northern Rock and Accord will allow a one month’s grace for a missed payment.

Other ways used to bump up the bank balances of the mortgage companies are charges for phone calls or letters related to arrears which Halifax charges £35 a time for, or charges for financial advice on arrears which GMAC levies a fee of £100 for.

With the furor over bank charges being unlawful (as most feel it doesn’t cost as much as £30 to send an automated letter) you have to wonder whether these fees - particularly Halifax’s £35 fee can be lawful. Maybe another huge consumer uprising to reclaim these fees is just around the corner?

Its official cash back credit cards are making a comeback. More and more credit card companies are starting to offer new cash back credit cards, some offer as much as 5 per cent cash back!

Abbey launched a new cash back credit card with a market-leading rate of five per cent but only on the first £1,000 of purchases made in the major supermarkets.

Other fantastic offers include Capital One’s four per cent - Apply online for Capital One here and American Express at three per cent. Apply online for American Express here. These new offers will entice more people to look for cash back cards.

Rates of three to five per cent sound very good but recent research shows the standard level of cash back paid to customers is just 0.72% and that drops to 0.5% when you remove the Abbey card from the average.

You should also be aware of other rates when choosing cash back credit cards; for example Typical APR’s should be taken into consideration, especially if you don’t clear the balance every month. Any cash back you earn could be wiped out by interest charged!

However if you clear your balance every month now is the time to take advantage of the cash back offers. Apply online today!

To keep up in the current account wars Lloyds TSB has had to increase the rate on it’s Plus current account.

The rate was raised to 6.4% AER and is an introductory rate for 12 months from the date that the account is opened. After that the rate moves to 4.25% - still not too shabby!

However customers planning to keep more than £2500 in the account will need to transfer the extra cash to a different account, as this rate only applies to the first £2500.

In order to qualify for this rate you need to deposit at least £1000 a month in to the account. 

Capital One Platinum Card – with an unbeatable combination of features this card is ideal for balance transfers and purchases. The card also offers a low typical APR of just 9.9% which is ideal if you intend to spend after the 0% offer period.

Apply Online Now.

• 0% on balance transfers until 1st May 2008
• 0% on purchases until 1st May 2008
• Easy balance transfers - a low 1.7% balance transfer handling fee*
• A low 9.9% APR typical variable
• Online decision in 1 minute. Apply Online now.

The Halifax One Special offers an amazing 12 months of 0% on purchases and balance transfers – the best available in the

UK today. Typical APR 15.9%. It could be the only credit card you’ll ever need! Click here to apply online now.A fee of 3% (minimum £3.00) applies for balance transfers.Other Extras:

• No annual fee
• Up to 59 days interest free credit on all purchases if you pay off your balance in full each month
• Cover against online fraud when purchasing on the Internet
• Accepted wherever you see the MasterCard sign in over 24 million locations worldwide
• Card replacement if lost
• Extra cards for family members over 18
• Around the clock service
• Manage your card online

 Click here to apply online now

More details about the Barclaycard Platinum Special

Barclaycard Benefits

1. 0% interest on balance transfers for 14 months (2.5% handling fee)
2. 0% interest on purchases for 3 months from opening your account
3. 14.9% APR Typical (variable)
4. No annual fee
5. Confidential advice if you become an Identity Protection Service theft victim with the Identity Protection Service
6. Safer Shopping with Fraud Protection - including chip and PIN, and watching for unusual spending on your account
7. Purchase Delivery Protection - protecting your online, phone or mail oders against loss or damage from despatch to your door (excluding second hand goods and services)
8. Emergency help when travelling abroad
9. Great holiday deals with the Travel Service
10. Online account management
11. Emergency cash advance and credit replacement service
12. Text alert 5 days before payment is due
13. 24 hour helpline

Click here to apply now.

Capital One has launched two new fantastic credit card offers last month; the Platinum Card offers 0% on purchases and 0% on balance transfers -Typical APR is 9.9%. The Platinum Cash Back Card offers 4% cash back on purchases made within the first 3 months and then 1% cash back on purchases thereafter - Typical APR 15.9%.

Many credit card companies in the UK attract new customers with 0% offers and there are hundreds of cards to choose from. If you want to apply online today for a credit card you can do right here. Click here to apply now.

Polling company YouGov interviewed over 4,000 customers on behalf of comparison firm uSwitch and found that customers have been charged fees at an average of £742 for bounced cheques, unpaid direct debits and overdrafts they don’t have.

This isn’t great for the banksas they are currently denying the charges and preparing their legal teams for a High Court showdown early next year to decide whether or not they can deduct these charges legally.

Top of the pile for charging too much was allegedly Abbey, where the average charges have been £1,376 over the last 6 years, or £230 a year. 

A spokesperson for uSwitch said these charges have provided a rewarding income for the banks, and should the ruling not go in their favour stand to miss out on the income in future. In retaliation, a spokesman for the British Bankers Association described the figures as misleading and such a description of the industry to be wrong.

Either way this is more egg on the face for the banks in the run up to the big bank charges debate and doesn’t reflect well on Abbey.