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News in Credit Cards
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Brits warned of hidden credit card charges while abroad
British holidaymakers are being warned of the hidden charges of using their credit cards while abroad.
Research by uSwitch.com has revealed that Brits vacationing in different countries could potentially run up over £53 million in fees simply by going shopping and leaving the payment to plastic.
With a double bank holiday coming up at the beginning of June to commemorate the Queen's diamond jubilee, many Brits will be looking to take an extended break abroad, but using a credit or debit card could land people with hefty charges.
Figures show that 22 per cent of Brits are forced to take out cash on their credit card which carries fees of 2.99 per cent and leads to people owing high costs to companies after returning home.
Michael Ossei, personal finance expert at uSwitch.com, said: "Fees from using your credit or debit card abroad can be the holiday souvenir from hell, but there are a number of ways to avoid them." More »
By Sarah Engle, Credit Cards - Mon 21 May 2012
Smartphone payments set to become the norm
The popularity of paying for goods via a smartphone is set to increase, according credit card company Acceptcards.co.uk
The firm believes that consumers need to be ready for all forms of transactions to slowly move to smartphone and mobile devices in the near future, but claimed that it will take time for people to "get used" to it.
A number of banks and companies such as Barclays, Mastercard and O2 have already begun to introduce smartphone banking applications and contactless debit and credit card services.
Richard Bradley, company director at Acceptcards.co.uk, said: "What we're seeing is a lot of businesses are encouraged to have a chip and pin or card machine, but what might be better suited is a virtual terminal that sits on their computer in the office."
Mastercard became the latest to offer the contactless service which allows consumers to purchase products up to £15, rising to £20 in June, in stores by simply swiping their smartphone. More »
By Sarah Engle, Credit Cards - Tue 15 May 2012
HSBC joins contactless debit payment schemes
HSBC has become the latest organisation to offer consumers a contactless payment scheme speeding transactions up at the tills.
The bank has joined the likes of Barclaycard, Natwest and telecommunications firm O2 in providing the type of service, which it believes will help free up congestion in stores when the Olympic Games begins in July.
Beginning this month, HSBC will be offering a 'tap' service which will allow consumers to spend £15 through this method, which is set to increase to £20 by June 1st. The payment service will be available in the UK as well as overseas for those whose debit cards are due to expire in May 2012.
Barnaby Jenkins, head of cards at HSBC, said: "Contactless technology is an efficient and secure way for customers to pay for goods, with a clear time saving advantage over alternative forms of payment."
Barclays is also offering a similar service which allows customers to transfer up to £500 to other bank accounts by simply sending a text message. More »
By Sarah Engle, Credit Cards - Mon 14 May 2012
Credit cards regaining consumer confidence
Consumers are once again turning to credit cards to help pay off hefty bills and make extravagant purchases.
According to figures from the Finance & Lending Association (FLA), confidence in the likes of store cards, personal loans and second mortgages all grew in the past month.
Total consumer finance grew by nine per cent in March as Brits turn to plastic instead of high interest payday loans that have become a scourge for many UK consumers.
Fiona Hoyle, FLA head of consumer finance, said: "Many consumers continue to be cautious, reinforcing the need for the government to make sure that their proposed changes to consumer credit regulation do not limit the supply of affordable, responsibly-provided credit."
Using a credit card is set to become easier than ever as the likes of Mastercard and Barclaycard have both introduced contactless devices which allow consumers to make transactions up to £15 by simply swiping their card or smartphone. More »
By Sarah Engle, Credit Cards - Fri 11 May 2012
Mastercard launches smartphone app service
Mastercard has become the latest banking service to provide customers with a smartphone app which allows them to pay in stores by just the tap of the screen.
The US credit card giant joins the likes of O2 and Barclaycard to offer a service that makes it ever easier to carry out transactions inhigh-street shops which the company believes gives more flexibility to the consumer.
Telecommunications firm O2's device allows people to transfer up to £500 between bank accounts simply by using a mobile application, but Mastercard has gone one step further by making it available to purchase products through this method.
Mastercard's PayPass Wallet has been launched as the likes of Apple's iPhone and Android phones become increasingly popular with the culture of chip-and-pin slowly becoming a thing of the past.
Geoff Iddison, at Mastercard's e-commerce business, said: "The majority of our customers are still putting in all their details when they make a payment online. The goal is to simplify consumer purchasing online and offline." More »
By Sarah Engle, Credit Cards - Wed 9 May 2012
Credit card users given advice on rights
Credit card holders have been sent clear advice on what rights they have by the UK Cards Association.
There are currently 30 million card users in Britain and the guidelines are aimed to give them a better idea on what right they have when using their plastic in stores or online.
During May, the UK Cards Association will send the advisory packs entitled 'Credit cards - your rights, a consumer guide' to every Citizens Advice Bureau around the country, as well as making the guide available to download from the organisation's website.
It will provide key guidance on issues such as what to do when a card is defrauded, what to do in times of financial difficulties and how to make changes to an account.
Craig Jones, spokesperson for the UK Cards Association, said: "To make sure that consumers know exactly what they are entitled to, we're pleased to publish this new advice guide, which sets out people's rights when shopping with a card."
Both Barclaycard and O2 have recently announced the launch of revolutionary mobile credit systems with the latter allowing consumers to transfer money between bank accounts with just a text. More »
By Sarah Engle, Credit Cards - Fri 4 May 2012
Stick-on credit card unveiled by Barclaycard
Paying at the tills could be set to change forever as Barclaycard has unveiled a "stick-on" credit card.
The PayTag is designed to create contactless payments, making it easier and faster for consumers to purchase goods by just attaching the card to a person's smartphone and swiping it over a scanner.
It is part of the customer's existing credit card account and will initially allow people to purchase goods up to £15, which will rise to £20 in June, with just the simple swipe of a device at participating stores.
A recent survey by Pew Internet Research found that these devices would make cash and card redundant by 2020 as people are looking towards new technology than ever before.
David Chan, chief executive of Barclaycard Consumer Europe, said: "We're giving people the option of using them to make easy, convenient, everyday payments without the need to upgrade their current handset." More »
By Sarah Engle, Credit Cards - Mon 23 Apr 2012
Smartphones set to take over credit cards
Smartphones are set to overtake credit cards and cash as the preferred method of payment by 2020, according to technology experts.
A survey of 1,200 industry professionals carried out by Pew Internet Research concluded that devices which had "paytags" were likely to make card and cash redundant in the future as consumers look to turn to a more modern way of carrying out transactions.
The 'Future of Money in a Mobile Age' report found that some card and cash payments would survive a lot longer after this prediction as some people prefer to pay via more conventional methods.
Christian Huitema, Microsoft engineer, said: "We have already witnessed the transition from cash to debit/credit cards. The electronic wallet is not much more than a 'virtual card' in which near-field wireless communication [NFC] replaces the reading of a magnetic stripe." More »
By Sarah Engle, Credit Cards - Fri 20 Apr 2012
British credit lending increases 7%
The amount of Brits taking out a credit card has grown by seven per cent, according to research by the Finance and Leasing Association (FLA).
Lending increased at the highest level of growth for over a year but officials have warned that the market still remains fragile as more and more people take out money on credit.
Recent research by Scottish Widows found that 4.4 million people are struggling with their finances and many have turned to credit cards in order to pay off bills and outstanding debts.
However, the FLA has warned that this could be a risky strategy as many will not be able to afford the repayments.
Fiona Hoyle, FLA head of consumer finance, said: "Consumers are taking advantage of the affordable credit options available to them. It is important that the government’s proposed new regulatory regime does not inhibit the provision of responsible consumer credit, which is vital for economic growth.” More »
By Sarah Engle, Credit Cards - Fri 13 Apr 2012
Credit card users to receive different kind of bill
Credit card users will be able to see exactly how they used their plastic when a new bill drops on to their doormat.
The UK Cards Association, in partnership with the Department for Business, Innovation and Skills, has created a new statement which will give the 31 million card holders a definitive breakdown of where their money went.
It will include any fees and costs incurred, charting a 12-month period since they began using the card. Customers can expect their first bill on the anniversary of when the account was opened.
Melanie Johnson, chair of The UK Cards Association said: "By clearly setting out costs and charges this industry initiative could help customers get a better deal either by being more savvy about how they use their current card."
The move is akin to the government's decision to give 20 million people a breakdown of how their tax is calculated and spent from 2014. More »
By Sarah Engle, Credit Cards - Thu 29 Mar 2012
Brits forking out £6.5bn each year on credit card interest
British consumers are spending £6.5 billion every year to pay off credit card interest, according to research from Comparethemarket.com.
Many Brits have admitted to struggling to make savings due to the increased cost of living combined with rising utility bills. This research has also revealed that the average UK consumer is facing spiralling credit card debts.
Whilst some have turned to high-interest payday loans to combat their outgoings as opposed to the traditional credit cards, these lenders have been heavily criticised for targeting those in large amounts of debt to borrow money that have "unsustainable" payback rates.
Comparethemarket.com has advised people in financial difficulties to shop around for the best credit card deal in order to make sure that they do not end up with large interest rates to repay.
Simon McCulloch, director of money, said: "The cost of servicing credit card debt can really add up. Credit card debts attract interest due to people not paying off the full total each month. This is why it's worth looking around to find a good deal on interest rates." More »
By Sarah Engle, Credit Cards - Fri 23 Mar 2012
PayPal introduces smartphone credit card readers
PayPal has developed a credit card reading device for all smartphones that will cut down on the amount of work that is involved in a financial transaction. More »
By Sarah Engle, Credit Cards - Mon 19 Mar 2012
Credit cards offer more reward schemes
Credit cards are offering consumers more reward schemes to encourage increased usage, according to research by Sainsbury's Finance.
However, the supermarket has warned that whilst the plans can look attractive, customers have been urged to shop around as the financial value of these rewards can vary dramatically.
The findings revealed that 22 per cent of reward schemes offered cash back, with a further 68 per cent offering a points or voucher system, while the remaining ten per cent gave customers the chance to jet off on air miles.
Many people are turning their back on credit cards and choosing to use high-interest payday loans but these lenders have been criticised by industry experts for leading people into unsustainable debt.
Stuart McKeggie, head of Sainsbury's credit cards said: "As the cost of living increases, people are increasingly looking to get more for their money and also be rewarded for being loyal customers." More »
By Sarah Engle, Credit Cards - Thu 8 Mar 2012
More Britons missing credit card payments
One in six people in the UK failed to pay a bill on time in 2011 with credit cards being the main source of missed deadlines.
Research by Moneysupermarket.com found that eight million Brits failed to pay at least one bill in the past 12 months and whilst credit cards topped the chart other costs such as council tax were also missed.
The biggest culprits were people living in Scotland and Wales where 22 per cent neglected to pay their bills whilst the East Midlands faired the best with only nine per cent missing a payment.
Experts believe that once a bill is missed the interest can mount up leaving people struggling to pay back what they originally owed combined with late payment fines.
Kevin Mountford, head of banking at Moneysupermarket.com, said: "A late or missed payment on a credit card bill not only impacts your credit profile, but will also lead to the loss of promotional rates on the card, which can be a costly mistake."
Many consumers could turn to payday loans as a way to get out of the debt amassed by late payments and members of the Welsh Assembly have accused companies of "sucking money" out of the country. More »
By Sarah Engle, Credit Cards - Tue 7 Feb 2012
Lloyds puts an end to charity cards
Major banking group Lloyds has decided to end its charity cards from companies such as Halifax and the Royal Bank of Scotland.
Charity credit cards are a way for people to donate money just by using plastic on transactions in stores. Many companies offer a system where funds are given to organisations once an account is opened and then for every transaction over a certain amount a percentage is donated to charity.
However, Lloyds believes that this is not a cost-effective way of giving money and has taken the decision to withdraw its cards from banks and building societies.
In the past 23 years the company has donated millions to charities such as Cancer Research UK and the NSPCC but now it will end the scheme in the coming weeks.
Baroness Finlay, vice chair of the all-party parliamentary group on cancer, criticised the decision.
She told BBC Radio 4's Money Box programme: "I think a bank which can produce that amount of additional money to give large bonuses has to look very hard at whether it should be giving back to the society on which it depends for its business." More »
By Sarah Engle, Credit Cards - Mon 30 Jan 2012
More Brits expect to continue using credit cards in 2012
British consumers have admitted they will continue to use credit cards to make ends meet throughout 2012.
New research by Gocompare.com has found that UK users will still be paying back debt on their credit cards during the coming year. The website found that over a quarter (26 per cent) of people expected to owe money on their plastic whilst one in ten (9 per cent) are relying on cards to help them through 2012.
Whilst the survey showed that consumers were worried about the rising costs of bills and loans, food shopping and travel costs were found to be the main outgoing cost of the average household.
Jeremy Cryer, Gocompare.com's head of credit cards, said "The rising cost of living is placing a strain on many families and credit cards are being used to temporarily ease the pain. If used carefully, plastic cards can be a useful budgeting tool, but when used to plug a gap in everyday spending, card debt can quickly spiral out of control."
Recent research by uSwitch found that consumer confidence in credit cards had reached an all time low with many users starting 2012 in debt following a costly Christmas period. More »
By Sarah Engle, Credit Cards - Tue 24 Jan 2012
Unpaid credit cards force personal debts up
Debts in the north of Northamptonshire are continuing to rise due to unpaid credit card bills, high interest loans and mortgage arrears.
Figures obtained by the Evening Telegraph have shown that people were contacting the Citizen's Advice Bureau (CAB) for debt advice. The organisation said that some cases reported to have debts of up to £40,000.
Many companies have been warning people about the implications of short term loans and credit cards. Payday lender Wonga was heavily criticised for trying to entice students to take up high interest loans as a way to pay back any debt they had amassed whilst at university.
In Northamptonshire the CAB found that between October and December those contacting it had debts totalling £486,745 up on the previous year's figure of £362,857.
Maggie McLeod, CAB debt advisor for Corby and Kettering, told the source: "People struggling to pay their bills are finding it too easy to get cash through pay day loans. Sometimes they don’t even have to speak to someone to get the cash." More »
By Sarah Engle, Credit Cards - Mon 23 Jan 2012
Credit card confidence hits all time low
Consumer confidence in credit cards has hit an all time low, according to new research by uSwitch.
Many users have started 2012 in debt following a costly Christmas period, and while it had originally been thought that consumers would turn to credit cards to help them ease out of the red, uSwitch's new report suggests otherwise.
The service provider revealed that two million people were unhappy with their current credit card deal, with companies such as Bank of Scotland, Santander and Halifax faring the worst in the survey.
uSwitch found that 51 per cent of people have had the same credit card for the past five years, while 25 per cent had more than three cards, down from 30 per cent in the previous year.
Michael Ossei, personal finance expert at the company, said: "With overall satisfaction and customer service getting worse across the board, and the high street banks still providing some of the worst service, consumers should look around further afield at new providers for the best credit card for them."
The Post Office recently predicted in its Consumer Report that 38 per cent of people will spend more than £200 on their plastic in January 2012. More »
By Sarah Engle, Credit Cards - Thu 19 Jan 2012
New credit card allows people to switch account
A new hi-tech credit card that could render all other competitors obsolete is to set to be trialled in the UK.
The new card allows consumers to switch between accounts at just the switch of a button on the payment method itself.
Many people carry a host of credit cards in their wallet at any one time but experts believe that this development will blow all other cards out of the water.
Users will be able to access different accounts on the device as it has an interface including buttons and a screen. The card is already in use by US bank Citibank, and makers Dynamics inc said it was already in "advanced" discussions with UK banks and hoped to begin trials within months.
Eziah Syed, of makers Dynamics, said: "We've squeezed an entire computer into something the size of a credit card. These cards are about making things easier, and we think that in high volumes the costs are very low."
Since the Christmas period many Brits have been turning to credit cards as a financial solution due to a number of low interest rates offered by building societies. More »
By Sarah Engle, Credit Cards - Thu 12 Jan 2012
