RBS

A credit card can be useful in a number of different situations. You’ve got the one off emergency – that crack in the car windscreen or the broken down washing machine. Or perhaps the big treat – the holiday in the sun or the new TV. A credit card can even be used for day to day shopping. People use credit cards in many different ways. And banks provide credit cards to cater for this.

If you’re in the market for a new credit card then the best advice is to shop around. There are plenty of options out there to suit different uses. Think about how you’re going to use it, and this will help you select the card to match your needs. Credit cards vary widely in their interest rates, but this won’t be a concern if you plan on paying the card off in full each month. If you are going to use the card to borrow, then think about the kinds of transactions you’ll be primarily using, since interest rates on purchases are often different to interest rates on balance transfers. If you’re planning on using the card abroad, pay attention to any fees or charges that apply for international purchases.

So what are some of the the best UK credit cards? If you’re over 18 and have a regular income, there are many to choose from. Here are four cards that suit a range of needs:

-          Halifax One

The Halifax All In One credit card offers a good rate for both balance transfers and purchases. It’s got a 0% rate on balance and purchases for the first 13 months. This gives a lot of flexibility in transferring money and using your credit card for those big purchases.

-          NatWest YourPoints World MasterCard

This is a good one for existing NatWest Customers. It allows you to accrue points towards all manner of purchases – holidays, flights, cosmetics, books. It’s got an interest rate of 17.95%, with an introductory offer of 0% on balance transfers and purchases for 13 months.

-          NatWest student credit card

Just because you’re a student doesn’t mean you should be denied a flexible friend. Most banks offer credit cards specifically tailored toward students. This one from NatWest has an interest rate of 18.9%. It’s got a maximum credit limit of £500, which is a good way for first time credit card holders to keep in control of their finances. It’s also got a whole host of discounts on everything from DVD rentals to iPods to wine club membership.

-          RBS private card

At the other end of the scale is this card for RBS customers with a large income. The minimum income required to apply for this one is £100,000, or a £150,000 joint income. It’s got a 0% interest rate on balance transfers for 13 months and on purchases for 6 months. After this introductory period, you get a very low interest rate of 14.94% for both. The minimum credit limit is £5,000.

Whatever your circumstances, there are credit cards out there to suit your needs; it’s just a question of knowing what you’re after and where to look.

UK Spending Cuts

The latest figures from the Office of National Statistics show that UK government borrowing rose in August to £15.9 billion. This figure, the highest for August since records began in 1993, has been put down to a fall in income tax and sluggish growth. The International Monetary Fund has put public sector net borrowing at £52 billion for the year. While this is 7% lower than a year ago, it is not performing as well as the government would like, and August’s figures suggest the country is not on course to eradicate the budget deficit by 2015, as the coalition had hoped. This increase in borrowing follows on a promising July, in which the country achieved a surplus of £2.4 billion. However, with this new rise in borrowing, the International Monetary Fund has revised its 2011 growth forecast for the UK from 1.5% down to 1.1% and for 2012 down from 2.3% to 1.6%.

The UK budget deficit is the political and economic topic of the moment for the coalition government. The deficit is the difference between what the government takes in tax receipts and what it spends on public services. Since the UK is currently spending more than it is taking, the shortfall must be made up through borrowing. This obviously increases the size of the national debt, which now stands at approximately £940 billion. This is roughly 61% of GDP and costs £43 billion every year to service. While the Labour government ran a surplus between 1998 and 2001, the budget has been in deficit ever since, taking a sharp nosedive due to the financial crisis. The current state of the deficit is largely due to the unprecedented spending in 2008 of £500 billion on rescuing the banks.

The British Chambers of Commerce (BCC) has been advising the government to change tack on their austerity programme in order to stimulate growth and cut spending further. Today at the Labour party’s conference, the shadow chancellor Ed Balls promised that a Labour government would balance the books with tough rules on public spending, and suggested cutting VAT to encourage growth. He has also recommended paying off the national debt with money generated through the sale of bank shares. However, Prime Minister David Cameron is sticking to his guns, insisting that the current austerity programme will see the country out of the doldrums it is currently in, rejecting the idea that the government’s current policy is choking off the recovery. This is in spite of the fact that most economists agree that the government will not meet the target set by the Office for Budget Responsibility of reducing national debt to £122 billion by the end of the year.

Monthly borrowing figures are volatile, and it is too early to suggest that this rise in borrowing for August will have long-term consequences for the government. But with the Labour conference taking place now, the opposition is sure to seize upon these figures to mount a serious challenge to the government’s plans for getting the UK out of the mire.

Bank of England

The Monetary Policy Committee of the Bank of England have been considering a fresh round of stimulus measures to inject some life into the recent sluggish growth of the UK economy. While the committee voted against such measures, their broaching of the topic has been interpreted as a clear sign of a step towards a new stimulus package. The Office of Budget Responsibility has said that recent UK growth has been lower than forecast, and it may just be a matter of time before the Bank of England takes action.

If the Bank of England goes ahead, then quantitative easing will be the most likely measure they will take. Colloquially known as ‘printing money,’ quantitative easing is where the Bank of England buys gilts from banks by creating new money. This raises the banks’ excess reserves and lowers the gilts’ yield. The effect is to expand the quantity of money that is in the economy, which should make it easier for banks to lend. It is a last-ditch attempt to influence growth when more traditional monetary policy is no longer effective.

The possibility of a renewed programme of quantitative easing has already seen effects in the markets. The interest rate on gilts dropped to below 3% and there was also a drop in the pound’s trade-weighted index. In the US, the Federal Reserve has already given the green light for a round of quantitative easing, and the City seems to believe that the UK will follow suit.

The aim of quantitative easing is to increase growth, and this was achieved in 2009 when the Bank of England pumped £200 billion into the economy and boosted growth by 2%. However, some economists dispute this figure, arguing that it is impossible to tell what effect the first round of quantitative easing had, since we do not know what growth would have been like without it. Sceptics argue that printing money is a risky venture, citing runaway currencies in countries like Zimbabwe and post-war Germany. A more measured fear is that quantitative easing can lead to an increase in inflation without any concomitant increase in growth. Also, there is no guarantee that banks will lend money. If they don’t pass on the new money, then the measure will not stimulate growth.

While the Monetary Policy Committee of the Bank of England have considered a new round of quantitative easing, only one member of the committee, Adam Posen, voted in favour. There are other options. The Monetary Policy Committee also considered, for example, cutting interest rates below the current 0.5% . It looks like, for the time-being at least, the Bank of England is sticking with the current programme. However, most economists see quantitative easing on the horizon, with a Reuters poll of City economists returning a 75% chance of the Bank of England taking action before the year is out. Certainly, if the Eurozone crisis continues and if oil prices continue to fall, quantitative easing may be the Bank of England’s only option.

Barclays Bank

The news that Barclays Bank plans to sell its Indian credit card business has apparently created a bidding war with Standard Chartered Bank being currently in the lead.

Some six months after the announcement came from Barclays, the signing of a deal is now finally on the horizon, indeed, it is rumoured to take place within the next couple of weeks. The only other bidder, SBI Card, a joint venture between GE Capital and State Bank of India, is still in the running and nothing is certain as yet.

The sale and offer would, however, only comprise of Barclays’ performing cluster of some 240,000 Indian credit cards. Both private and foreign banks are becoming more aggressive in their pursuit of the credit card market and other unsecured lending. This is surprising in view of the fact the number of credit cards being issued to new account holders is actually declining. Only spending on existing cards is up on previous months and looks set to rise.

Barclays seeks to cut some 3,000 jobs world-wide to reduce operating costs and has already merged client relationship teams of its commercial and investment banking departments to cut costs. Barclays Capital, now consisting of the bank’s investment banking and commercial banking divisions, wishes to concentrate on their large corporate clientele in India, while Barclays as a whole has decided to focus on business from more affluent clients in the retail banking sector.

It appears Barclays has lost its appetite for the credit card market as a whole, a market it once aggressively pursued around the world. Unsecured lending has become a red rag to many UK banks, so it seems.

Reuters reported this week that Barclays seeks to reduce its exposure to unsecured lending in India, not surprising with a book value of approximately 2 billion rupees/26.6 million pounds that is actually shrinking and credit card spending that is rising – and therefore presenting the possibility of defaulting on the loans.

Standard Chartered is a long standing business rival of Barclays. The bidding bank has issued some 1.2 million credit cards to Indian households. In a country with roughly 1.2 billion people, the number of credit card holders is ridiculously small – a mere 18 million people have a credit card in India. However, as India’s economy is emerging from the global crisis in better shape than many of its European counterparts, one can only speculate how many card users there are likely to be in the future.

For the moment, it seems, Indian people have adopted a more sensible approach by sticking to debit cards and some 230 million people use them regularly. In a country of such gigantic geographical size and with tremendous infrastructural differences to overcome, only local Indian banks have the type of branch network needed to truly expand the credit card market.

This has been the greatest challenge for foreign banks so far and is perhaps the underlying reason, why Barclays is selling. Barclays Bank is the issuer of the Visa Black Card in the United States.

UK Inflation

A trip to the local supermarket these days is an ever increasing headache. From one day to the next basic food items might have gone up in price by as much as £0.20. When every penny counts and family budgets are stretched to the limit, news of supermarkets’ excessive profits aren’t reasons to be cheerful either.

Will the UK bank rate rise again? Will the pound devalue further against other currencies? At present it looks as if the Bank of England is a long way off from raising interest rates again and is more likely to print more money, and rumour has it among industry experts that a rate rise is not expected to happen before late 2014 or in early 2015.

It may be good news that interest rates remain at their current levels and the cost of borrowing is not going up for consumers, but it is bad news for those, who rely on their savings to supplement their meagre pensions.  So far the recovery has been weak, almost non-existent with a current growth rate for the economy standing at just 0.2%.

With high unemployment – especially among young people – and frozen salaries, there’s little chance of a speedy recovery or indeed a change in interest rate. The danger is that the fear of rising inflation will increase bad tempers over pay freezes and will spark a demand for larger pay rises. This in turn could send inflation spiralling out of control, particularly with the UK’s obsession to pay astronomically large bonuses and salaries to “city fat cats”, who have yet to show that they’re actually worth a penny, let alone their fat bonuses.

With the inflation being at 4.5% already, many households are forced to dip into their savings – or worse – rely on their UK credit cards to stretch their monthly budgets. Utility companies, greedy as ever, have warned of large price increases this autumn and winter. As a result, many UK citizens are looking to leave the UK for pastures new – those who can do so, are unlikely to return, taking their skills, savings and tax payments elsewhere to boost the economy of another country.

Is the UK a lost cause? Current inflation and unemployment rates are suggesting just that – and without confidence in the efficiency, credibility and trustworthiness of banks, there’s little chance of anyone believing governmental speeches that the UK isn’t nearly as badly off as its neighbours Ireland, Spain or Portugal for example.

Many UK citizens believe that banks have so far been able to disguise their worst excesses and that further revelations over mismanagement and downright foolhardiness are yet to surface.

Even if this is not the case, banks aren’t helping UK citizens to regain trust in the banking sector – the original culprit who caused this whole inflationary misery. Without lending to small and medium sized businesses the economy has simply ground to a halt, leaving only the bankers laughing all the way to the bank – as usual.

UK Credit Card

The world-wide financial crash revealed just how much British shoppers are in love with their credit cards – an unprecedented amount of debt was accumulated on UK credit cards, never mind the mortgage and other loan markets.

According to a recent survey conducted by credit reference agents Equifax, shoppers’ spending habits are influenced by their star signs. While Capricorns are apparently the worst culprits for accumulating debts of over £5,000 and then struggling to pay them back, Aries are careful with their money and hardly ever get into financial trouble on their UK credit cards.

Public holidays like Christmas and the long weekends in spring and summer are also too much of a temptation, when it comes to the average UK credit card holder. With “cheap” city break offers galore, it is hard not to use the credit card, when you’ve already had to do without the annual two week holiday thanks to a reduced family budget. UK shops in particular know how to exploit this weakness – special offers on anything from food, drink, shoes and gardening equipment like BBQs suddenly spring up everywhere, luring shoppers into spending what they haven’t really got.

This type of behaviour is virtually unheard of in Germany, where far fewer people actually have a credit card and where paying by debit card for your weekly groceries is a relatively new thing. With far fewer households having a PC or laptop at home, there’s less temptation to go on an online spending spree. Unlike UK credit card holders, who usually pay by card at their supermarket checkout, their German counterpart will pay by cash instead, thus always knowing, how much is left in their bank account for them to spend.

A recent governmental study conducted in Scotland revealed that 1 in 3 Scottish people have outstanding credit card debts. The study looks at household spending habits in 2009 to 2010. According to the survey households with an overall income of £30,000 plus were least likely to have no outstanding credit card debts (50%), while households with an income of £10,000 or less where the most likely to owe anything on their credit cards (78%). The latter probably reflects the fact that they are far less likely to have obtained a credit card in the first place, due to poor credit scoring with potential UK lenders.

Despite high inflation and continued unemployment, holders of UK credit cards continue to shop with money they haven’t really got. A significant rise in utility bills may also be responsible for people having to use their credit cards far more – it stretches family budgets just that little bit further every month.

As long as the outstanding balance is paid off in full and on time, things are rosy. Trouble starts, when a credit card holder falls ill and cannot work for a longer period of time or loses his or her job. Falling behind with just one payment can have serious consequences for UK credit card holders.

How do you keep your credit score healthy? First, it helps immensely to understand exactly what is considered when your credit score is calculated. Many people have no idea what goes into determining that all-important number, and think that simply paying their credit card bills on time is enough to garner a high score and to keep it healthy. You might be surprised to learn that a history of timely payments makes up only one-third of your total credit score. It’s an important part, but other considerations can make your score ill if you aren’t aware of how they matter.

Other factors of a healthy credit score include:
1. Diversity of credit. It’s not enough to apply for a credit card and use it sparingly, and you will lose points if this is all the credit you have, even if the payments are timely. Points are awarded for mortgages, car loans, or any type of installment loans.
2. Fat debt. If you carry a large amount of debt, time to put it on a diet. Points are deducted for high balances, the assumption being the more debt you carry; the harder it is to manage. Allowing your spending to get too close to your credit limit can severely damage your score.
3. Inquiries. The more entities asking about your credit score the more it hurts your credit score. Don’t use a credit inquiry for a discount coupon when shopping – this is another inquiry that could deduct points from your score. Every time you apply for a credit card, it shows up as an inquiry and deducts points, even if you don’t open a new account.
4. Getting older is better. You may have physical health problems as you age, but as far as credit goes, the older the better. Establish your credit early, and this will pay off in the long run.

With a healthy credit score, the doors to a wide variety of options are open to you. You can apply and get approved for the best credit cards on the market; it reduces stress, which could reduce blood pressure readings and a host of other stress-related illnesses. Keep your credit score healthy, and live a healthier life!

Credit cards are often only used for spending money – but nowadays, more and more people are using them to make their debts easier to repay.

Of course, though, credit cards that can help make your debts easier to manage are different to credit cards which are primarily designed for spending.

The type of credit card we are talking about here is one that offers 0% balance transfers. For a pre-determined period of time, credit cards with this offer attached to them don’t actually charge you any interest on balances you transfer over from other cards, which means you can effectively make your debts interest-free for this period of time. Even if you’re required to pay a fee to transfer the balance from one card to another, it could still save you a lot of money.

It is important to note, however, that a credit card like this may not be the most appropriate way of repaying debt for everyone – so if you’re in any way unsure, you should talk to a professional debt adviser about the options available to you first. You may be more suited to debt management plans or an IVA.

How could a 0% balance transfer credit card help me?

First of all, if you move existing debts onto a card with 0% interest, you should be able to repay more of your debt at a faster pace – because you won’t be paying interest on the money you owe.

Also, you’ll be replacing several debt repayments per month with just one – which can help to make your finances a lot easier to manage.

Would a 0% balance transfer credit card be the right choice for me?

As with all other credit cards on the market, a 0% balance transfer deal will have an agreed credit limit.

Of course, this limit will be different on separate cards, and can also change according to your credit score – but it’s important to understand that you may not be able to borrow as much as you could with other types of credit.

As such, you may only be able to use a credit card to repay your debt if the amount of debt you are carrying is relatively low. For larger debts, you may benefit from seeking professional debt advice to find out the most suitable solution for you.

It is also important to remember that this particular type of credit card deal may not be appropriate for you if you don’t think you’ll be able to repay the money you owe. You’ll have to find another similar deal at the end of your 0% interest period – so it could end up more expensive than other forms of credit.

If the debts you are carrying are causing you problems, and you’re unsure as to whether or not you’ll be able to repay the money you owe, you should contact a professional debt adviser before making any applications for credit.

Vanquis Card

People can build up bad credit for a number of reasons. Missed or late debt repayments, having a home repossessed, or having a high level of debt can all contribute to a poor credit score. County court judgments, or CCJs, can also adversely affect your credit. This can make life difficult in a number of ways. Bad credit makes it difficult to get a credit card or a personal or business loan. It might even prevent you from opening a bank account. If you do get a credit card you’re likely to face higher rates than someone with good credit. And it’s not just banks that don’t like bad credit scores. Potential landlords and employers may also look to your credit history in evaluating applications for a flat or a job. Also, bad credit can lead to you being turned down for mobile phone contracts, and you may have to pay higher premiums on your insurance.

For these reasons, it is really important to retain a healthy credit record, and to rebuild your credit if for one reason or another you find it in bad shape.

The best way to get a healthy credit score is to get a credit card. This may sound strange, since for many people with bad credit it was their use of credit cards that was the trouble to start with. But the problem is not with the card, it’s with how it gets used. Getting a credit card, staying below the limit, and paying the bills in full and on time is the quickest way to a good credit score.

But if you’ve got a bad credit rating, then getting a card can be tricky to begin with. And making multiple applications only to be refused will damage your credit score further. The Vanquis bank card is well suited for this problem. Vanquis takes a look at your financial situation, see what you can afford to pay back, and have a good record of saying yes to people who have been turned down for credit elsewhere. This makes the Vanquis card a good way to go both for people eager to turn around a bad credit history and for those who want a credit card but have not been successful in applications with the major banks. In their 10 year history Vanquis have already accepted over a million applications from customers looking to build credit, and they’ve won a string of awards.

The card itself is not just suitable for those looking to build up their credit rating. It’s perfect for those on a low income, or for self-employed people who may have trouble proving their level of income to a bank. The credit limit is set to suit the individual’s level, between £150 and £1000, and this limit can be increased over time. Vanquis have an excellent UK-based customer service team if you need advice on what card is suitable for you, and robust anti-fraud measures that will keep your money safe.

Vanquis is a first step for those new to credit cards, and offers a good way out of bad credit.

Unfortunately for people who are having a bad credit report the chances of getting a loan or credit cards are limited. Accepting your loan application fully depends on the bank and financial institution, so do not expect miracles, high amount of loans and low interest. Fortunately, now even people with bad credit can get all types of loans, bad credit personal loans, bad credit mortgage loans or bad credit credit cards. Of course, getting a credit card with bad credit will be more difficult and costly but if you follow some useful steps it is not impossible.

Usually people who are having bad credit apply for credit card at smaller retail shops, which are likely to give you an opportunity and their trust. If you get accepted, make sure to make the minimum payment every month, even more, if you manage t pay more than the minimum each month the rates of interest won’t be so high. Another place you might get accepted and given a credit card is your bank or credit union. If you already have business with them they might give you a credit card, but the interest rates will be higher than in the case of a clear credit report. Another method to purchase a credit card with bad credit report is applying for a secured credit card. In this case, as a security for your credit line, you will be required to open and maintain a saving account. The last solution is to get a family member of fried to co-sign for a credit card. The main danger connected to this type of bad credit credit card purchase is, in case you become unable to pay their credit report will be damaged.

These are the main types and options of getting a credit card with bad credit, but before applying for one of them it is advisory to use credit counseling services, get to know your credit history, so you can answer freely and most confident to the occurring questions banks and financial institutions might have.