A Good Reason To Read Your Credit Card Terms & Conditions

Being in debt is like living in a dark hole with no way out. It is impossible to see the light at the end of the tunnel when you are entrenched in it and seemingly unable to escape its pull. Instead, you end up digging deeper and deeper. I, for one, am determined to see the light by the end of this year, but it is difficult when you have no idea which way to turn, especially when credit companies make their own rules up as they go along.

I mentioned bank charges in a previous post as a result of the Financial Services Authority and Office Of Fair Trading's investigations into them in the UK not so long ago, but I have something else to reveal today. Another of the unbelievable bank charges out there!

One of my colleagues has much the same problem as I do at the moment, and a major problem with one particular building society. For those of you not familiar with the term, a building soceity is not owned by shareholders. Instead, it is supposedly run for the benefit of the customers. They tend to offer better rates and deals on everything than banks, but most of them have capitalized on this image in recent years and push sales like banks do to make their figures look better.

My colleague has a credit card with this institution at the moment, although I doubt she will for much longer after this little scandal. She recently received her bill to find that she had been charged for a cash advance but was a little puzzled because she had not taken any cash out of the credit card that month.

After querying it with the building society, I should imagine the air was blue! Although she had not taken cash out, the financial instituion had decided to change their terms and conditions in October last year to incorporate a charge if a cardholder used the credit card to deposit money into an online betting account. She goes onto one particular site and plays a few games every now and again... and they had charged her for it.

The charge was actually 30% becase a £3 fee was placed on the account for depositing £10. My jaw dropped to the floor when she told me. I found it absolutely outrageous, but then again it seems that the banks and building societies in this country can do as they please, make billions every year and charge the customer for it!

The moral of the story - READ THE TERMS AND CONDITIONS OF YOUR CREDIT CARD, because you never know what you'll be charged for next!

Controlling Everyday Expenses For Debt Freedom!

Looking at the trouble I've gotten into with debt over the past couple of years, it has actually been the daily expenses that have caused around 90% of it. Hard to believe I know, but I realised it all soon mounted up when I began to put a budget into place! I'm not a spend or shopaholic. I don't buy things that are out of my means either, but it had been left up to me to run the household finances on one wage when my husband lost his job. And now I'm the one sorting it all out, I'm going to let you into a few tips!

General Expenses - This includes bills that are outgoing on a regular basis. Our house has both electricity and gas. The latter heats the home, the former makes everything else run smoothly. We are on a meter so we can see how much we are spending from month to month. I decided that we were spending way too much on both so we did something about it. I never leave anything on standby, but you'd be surprised how much energy you can save by switching appliances off at the plug every night and turning lights off as you go!

Food Expenses - We only had a takeaway once a month, but we were buying more food than we used so I've been given a new lease of life in the kitchen! Nothing goes to waste now! I know the best before date on everything in my fridge and it is all used up before it goes off now. I often felt sick at how much food we threw out before, but no more. I've also found that there isn't much difference between the best brands and the shop's own brand so we now just go for the cheaper option as well as shopping online so I'm not a victim of that impulse buy!

Clothing Expenses - Neither me nor my husband have had a new item of clothing for a couple of months now, and it will stay that way until we absolutely need something. I'm having a major sort out for eBay at the moment and found no end of clothes that I'd forgotten about so we don't need to go into a store any more... it seems we have the store in our wardrobe! Have a sort out and see what you have. Even if you wouldn't wear it again. I'm betting someone will so you could sell your stuff for a little profit, whether at a jumble sale or on eBay!

I managed to pay double off my credit cards this month because of the savings I made. Yay me! If I can do it then anyone else can!

I've even set up a regular saver that I cannot touch for 3 years. I'm that confident about the future and am looking forward to owning my own home that I'm more than comfortable with my decision. We'll see next week just how much is gone off the debt... it's fingernail biting time!

An Incentive To Get Rid Of Debt!

I'm always looking for hints and tips that can help me to get out of debt on the Internet but have never actually sought professional advice for my situation to be perfectly honest. I don't know why... maybe because I know I'd feel embarrassed sitting discussing it with someone. Broadcasting it over the Internet is OK because I can remain faceless but actually talking to someone about it... no thanks!

After reading what I read today, I don't feel the need to now though. I found a site on the Internet... I don't think it's an official government site but it is somehow connected to an advice bureau and actually conducts research into the UK's current level of debt. It's called Credit Action and the information I read on there shocked, appalled and terrified me!

The UK is currently in £1,400 billion of personal debt. It increases by £1 million every five minutes and £330 million per day! If that is the UK's debt, I dread to think how much debt a much larger country has. After all, less than 60 million live here!

Those figures are enough for me! Frugality here we come!

OFT vs. Banks: The Court Case Begins!

As many of you living in the UK or keeping a close eye on the financial global climate may be well aware, a court case opened today (well, yesterday now) that may well have a huge hand in deciding the future of UK banking and the fate of consumers as well. The Office of Fair Trading has taken eight major banks and the biggest building society in the UK to the High Court in order to get a resolution that will help all financial institutions to govern bank charges effectively.

I for one cannot wait for the result.

At the moment, the average consumer is charged between £20 and £30 for going overdrawn or failing to have enough funds in a designated account for a direct debit to be taken, and around £15 for a bounced cheque. Some banks charge more and some less. For any American readers, bear in mind that the exchange rate doubles this figure at the moment to convert it into dollars, so you are looking at $60 per returned direct debit and per foray overdrawn.

Basically, in my opinion, the financial institutions in the UK are ripping customers off. There is absolutely no need to charge consumers these extortionate amounts. It is all about profit, and I really do not care whether or not the banks deny this. They can deny it until the cows come home because I will not believe them, and I don't think that I'm alone in that for one minute. When you look at the fact that some of them are making £6 billion plus profit, it is really hard to feel sorry for them when they "have to pay for consumer mistakes" (that is the gist of their arguments anyway).

To put it in perspective a little further, I would be charged £12 for a bounced cheque. It costs my bank £2 to process. How is that fair when I am on the poverty line and the fat cats that head the bank are not?!

All of this is of course my own opinion, but I do have a little credibility...

I worked for one of the institutions that have gone to court today up until August this year and am frankly disgusted by its practices. As I joined the company, the Head Office brought in new regulations as a direct result of the bank charges scandal that rocked the nation when people began to sue. They took power away from the branches so that the individual branch could no longer decide whether to refund a charge after a complaint. We got so much abuse because of this but they did not care at all.

I myself recently had a charge for a returned direct debit. I put my money in an automated machine the day before my direct debit was due out, but it hadn't registered before the DD came out so I was charged for its return because I hadn't got enough money in the account. Now remember I had put that money in and it was not my fault that it had not registered but the bank's.

Guess ho much I was overdrawn by! £1! Yes, I was charged £30 for the £1 difference. Again though, it was there but had not been registered by the bank! Needless to say I complained and they did refund my charge, but only because I threatened to go to the Financial Service Authority (FSA) I do believe, who would have made them pay it back anyway.

Anyway, back to the court case! If the OFT wins the case then they will force banks to reduce their charges, but what will the banks do then to make us unwitting consumers pay for it? As far as I can see, they will always cheat us. There are no ethics in the financial world any more. Just greed. Ugly, ugly greed that is forcing the common man under.

Everyday Ways To Save Money

I've started to implement my get rid of debt in 2008 plan and so far it isn't going to badly... although I am touching my wooden bookcase with my foot as I'm writing this! I've decided to concentrate on getting the household expenses down a little first as that is obviously taking up some of the money that could be used to pay off the debt. I've found quite a few ways of implementing the budget and, although we are only four days into the year, I have started to notice minor changes!

Here are two of the ways to save money that I've found so far:

*Shopping online - I've started to do the majority of my household shopping online, mainly because I didn't have time to go out and do it myself over Christmas and I couldn't be bothered with the queue. However, I've saved a lot of money! Although there is a delivery fee, I've cut my food shopping bill in half because I no longer buy items that I don't need! I stick to the basics and I've saved £30 on my usual bill!

* Cut down on heating - The fuel prices in the UK have gone up yet again and are now astronomical, which I think is disgusting, but we've always had high heating bills because our heating is not on a timer. Now, we run it for an hour and then switch it off until we begin to feel the cold so it is now only on once every four hours or so. It's amazing - before it was on all the time!

There will be more of these nuggets of wisdom (ha!) in the future... as soon as I find them, you'll know about them! And now for dinner...

Debt Resolutions And Your Credit Card Debt Priorities

Happy New Year To One And All!!!

Now is the time to resolve to get your debts figured out! Of course, you can start to manage your credit card debt at any time of year, regardless of how much you are in debt and the reasons behind it. However, you have to sort your debt priorities out before you can begin to make headway on your credit card debt.

There are a number of articles out there that discuss credit card debt and debt priorities but the majority of them do not explain what debt priorities are so consumers fail to realise just how useful the advice can be. This post will deal with identifying your debt priorities and resolving them effectively! This is the first thing any individual should know before working out exactly what they need to do in order to pay off their debts effectively.

Debt priorities are the credit cards that have higher rates of interest than the others in your wallet. You could have £500 on a credit card that has an APR of 25% and £4,000 on a credit card that has an interest rate of 12%, but the former would be your debt priority. You would pay back more on the former in terms of the interest applied to the account than you would the latter if they both had a similar balance. In more simple terms, the higher the interest rate, the more pressing the debt and so the debt priority is higher.

When working out your budget for paying off your credit card debt every month, you should aim to pay more off your debt priorities than your other credit cards. If you focus on eradicating the higher interest credit card balances first then you will ultimately find it easier to pay off your debts in general. This is the first step to debt freedom so do a little research beforehand and find out the interest rates!