The Financial Blog

This Wednesday, 16th January, the Office of Fair Trading’s hearing begins, regarding the law and unauthorized overdraft charges.

Don’t forget the hearing is not to decide if specific banks are acting unfairly but it will address the Unfair Terms in Consumer Contracts Regulations in order to decide if these terms apply to unauthorised overdraft charges put in place by the banks.

If the hearing decides that unauthorized overdraft charges are unfair I would think it will be months before we see any action taken specifically against the banks this declaration is brought against; Abbey National plc, Barclays Bank plc, Clydesdale Bank plc, HBOS plc, HSBC Bank plc, Lloyds TSB Bank plc, Nationwide Building Society and Royal Bank of Scotland Group plc.

The initial hearing will last 3 weeks, for more information visit the OFT website.

The Bank of England today announced their decision to keep the base rate at 5.5 per cent. This was dispite a downturn in Christmas retail spending and will not please retailers who were hoping for a cut in the base rate to encourage high street spending.

The main concearn for The bank of England is probably how the base rate will affect inflation. Therefore we may be forced to wait until February, when the inflation report is released, before the Bank of England commit to a cut in interest rates.

tenant loans are usually for non-homeowners who require a loan to suit their financial status.

However if you live with your parents, if you’re self employed, or have a less than perfect credit history including CCJs, Arrears or defaults, even if you’ve been refused credit elsewhere, you could still qualify for a tenant loan tenant loan.

Most companies providing tenant loans search the market of around 500 lenders to find the best product for your needs. An application for a tenant loan doesn’t need to include your credit history information; in fact some companies will not run a credit check on you until your application has been accepted. With a tenant loan the company usually looks at your current financial status and your ability to repay.

In summary tenant loan companies specialise in being able to help people who have been refused a loan refused a loan elsewhere – whatever your circumstances…

Soaring wholesale energy costs are the reason Npower has given for the price rises announced today. Npower today confirmed that for domestic customers electricity will rise by 12.7% and gas by 17.2%. Not good news for anyone in the New Year as I guess this is just the start of many energy suppliers increasing their prices.

Managing director of Npower’s residential business, Giuseppe Di Vita, said: ‘Today’s decision is not an easy one’.

‘We always try to protect our customers for as long as possible but sadly higher energy prices are a fact of life’.

Can’t energy suppliers decide to take on some of these increases in wholesale prices rather than just passing them off as ‘unavoidable’ and the consumer paying the cost?

This is all the other energy suppliers have been waiting for; one of them to announce price increases and the rest will soon follow suit…

Now that the Christmas shopping frenzy is over I’m sure we’re now all ready to start on the January sales!

But perhaps, more importantly, people will be beginning to suffer from the financial hangover January can bring. The strain of financial pressure over Christmas is probably about to catch up with a lot of us in the UK.

The additional expense of food, gifts and travelling at Christmas time often puts increased pressure on family finances, which can be made worse because people give in to temptation and run up credit card, loan, or overdraft debts.

Credit card companies also advertise in the run up to Christmas offering 0 per cent purchase or balance transfer deals, tempting people to run up credit card debts. There’s certainly nothing wrong with making the most of these 0 per cent deals on offer, but the most important part people tend to ignore or worry about only when the bill lands on their doorstep, is actually having the money to repay the debts you run up on a credit card.

If you think, come the end of the month, you’ll be struggling to repay all your credit card bills or overdraft debt then now is the time to take action.

Firstly do not bury your head in the sand; the debts will not magically disappear. If you are going to be paying interest on an overdraft or your existing credit card then probably the best idea is to transfer these debts onto a 0 per cent balance transfer credit card deal.

Best balance transfer credit cards;

Egg credit card - 0% for 15 months (3% fee applies). Typical APR 16.9%. Click here to apply

Halifax One credit card - 0% on balance transfers for 12 months. 15.9% Typical APR. Apply here now.

MBNA Platinum Plus - 0% on balance transfers for 12 months. (3% handling fee applies). 15.9% Typical APR. Apply here now…

Capital One Platinum Credit Card - 0% on balance transfers and purchases until 1st November 2008. A balance transfer handling fee of 1.7% applies. Low typical APR of 9.9% (variable). Click here and apply now.

Barclaycard Platinum 5.9% on balance transfers for the life of the balance, no balance transfer fee. 14.9% Typical APR. Click here to apply online now

Next, do not, under any circumstances, continue to spend on your credit card or go back into your overdraft. Amazingly, something like 60 per cent of people who manage to transfer debt to a cheaper borrowing option then go on to borrow more and sink further into debt.

If you have serious amounts of debt and cannot get the whole amount transferred onto a 0 per cent balance transfer credit card then you could look at a consolidation loan. By taking out a personal loan or secured loan and paying off all your existing creditors, it could work out cheaper for you every month. However you need to be aware that you’ll have to spread the term of your loan over a longer time period in order to make your monthly payments less.

If, after looking at a consolidation loan or transferring your credit card balance to a cheaper credit card, you’re still worried about how much money you owe then you should really seek professional debt management advice.

Check out the loan and credit card deals on the right hand side of this page>>>>>

Alliance and Leicester have announced they’re the first UK bank to offer same day funds for unsecured loans to existing and new customers who sucessfully apply for a loan.

The Typical APR for an Alliance and Leicester loan is 6.9 per cent in branches, online the cheapest I could get their loan calcualtor to offer was 7.4 per cent Typical APR, but then again I could have been doing something wrong…

So from today sucessful applicants can have the cleared funds in their account the same day as they apply for the loan, as long as your application is accepted before 12.30 pm on any working day.

It looks like you need to be free to sit in a branch and apply with a member of staff first thing in the morning, on a working day, to actually get the cleared funds in your account the same day. Not such a great deal then; considering how many people work most working days! I suppose the bank needs to confirm your identity and run credit checks virtually on the spot, as you’re in the branch.

Personal Loans Manager at Alliance & Leicester, Richard Al-Dabbagh said: “What better way to get your finances sorted out and off to a flying start for the New Year? The fact that the loan takes less time to be paid into your current account means that you can get it working for you even faster.

“And with one of the best rates available on the high street, our personal loans aim to meet the needs and budgets of virtually everyone.”

It is obviously better to pay off your most expensive debts first and a personal loan could be a cheaper than a credit card or store card. The fixed monthly payments on a personal loan can work better for some people because choosing what you’d like to pay each month off your credit card statement usually always ends up with a minimum repayment!

Sainsbury’s bank have cut their personal loan rate to 6.5 per cent Typical APR today, this is for loans of £7,000 to £25,000.

This is now one of the most competitive loan rates in the market, in some instances by over 4 per cent Typical APR. Bearing this in mind it would make sense to check out unsecured loan rates using a financial comparison website before you commit to applying for a loan.

Perhaps one of the more attractive benefits of the Sainsbury’s personal loan is the repayment holiday – you can choose to make no repayments for the first 3 months, get an instant decision if you apply online and get a cheque delivered within 24 hours! Sounds good if you’re looking to consolidate Christmas debt in the New Year.

The 6.5 per cent Typical APR will be dependant on your credit rating and is a limited offer, although I can’t find any specific dates the rate will last until! Take a look at Sainsburys Bank.

Zopa.com is the world’s first person to person lending service; you borrow from a person rather than a bank! So, instead of paying the ever-increasing interest rates of a personal loan you could go to zopa.com to see how much you could save…

For example a £3000 over 12 months could cost from 8 per cent to 12 per cent from a bank, whilst with Zopa will cost you 6.6 per cent. Of course this is all dependant on your credit rating so you might actually not be offered the lowest rates from either the bank of your choice or Zopa…

The other advantage with Zopa is that there are no early repayment charges if you’re suddenly able to repay the whole amount for whatever reason.

Compared to the average credit card Typical APR of 16% it’s certainly worth finding out more…click here to go to Zopa.com

According to the price comparison web site Uswitch Npower has announced that it is putting prices up by 17% for gas and 13% for electricity from 1st January, 2008. These are the same increases as announced by British Gas last week.

Head of Home Services at uSwitch.com, Tim Wolfenden, said: “Suppliers are paving the way for across the board price increases. Today’s move can leave consumers in no doubt that prices are heading north again – the return of the £1,000 average energy bill is imminent. The only question now is which supplier is going to break ranks first and put up prices on standard plans.

“The size of the increases being made to wholesale tracker plans may also give an indication of what we can expect when suppliers start to put prices up on their standard plans. It’s increasingly looking like the smart money should be on a 15% increase, which would mean consumers having to find an extra £137 a year to pay their bills.”

According to Moneyfacts.co.uk a financial information company more lenders have pulled out of the unsecured personal loan market, they say it’s becomming a worrying trend.

Eskimo Loans, part of Northern Rock, and Hanley Economic Building Society have both pulled out of the unsecured loan market with emmediate effect and Moneyfacts say the number of unsecured loan  providers has fallen by 10 per cent this month. Moneyfacts blame the reduction on the credit crunch, high interest rates and the alarming increase in loan applications being declined.

Personal finance analyst at Moneyfacts, Esther James, said “Such a large reduction in just the last month is worrying. With no signs of rate rises slowing, it’s a rather unsettled market. The credit crunch is showing its strength in the personal loan market.”

Personally I don’t think this is really too much to worry about if you’re looking for a personal loan. Yes interest rates are rising but that shouldn’t come as a suprise for anyone who’s had a mortgage or any other form of credit in the last 12 months. Northern Rock are obviously still suffering and simply cannot afford any further mistakes and as such have pulled one of their ‘white label’ brands - Eskimo Loans. I think it’s really as simple as that…