0% Interest Credit Cards

It’s hard to turn on the TV, pick up a magazine or listen to the radio without being bombarded for advertisements for credit cards, and the marvellous introductory offers they use to pull you in. However, how do you know exactly what these offers really mean, and if they’re right for you? Is it a big marketing ploy that is likely to cost you a great deal of money in the future, or a safe bet that could let you keep a little bit extra in your pocket every month?

One of the most common introductory offers in a credit card is the fabled ‘0% interest on…’, which sounds too good to be true. Generally speaking, it is. How can the credit card company be making money if they aren’t charging you interest on your balance? The answer is simple: they can’t. It’s for that reason that you can expect any 0% interest rate offer on a credit card to be extremely short-lived – usually six months, and almost certainly no more than a year. After that, you’ll generally find that the interest rate is substantially higher than the average, which could well (and probably will) end up costing you more in the long run.

So, are 0% interest credit cards a con that should be avoided at all costs? No… or at least, they don’t have to be. There are ways of exploiting the conditions in order to help you out, but it generally requires a strong sense of willpower and a desire to keep yourself afloat. Picture the scene: you have a little bit of debt on another credit card that’s killing you on the interest every month, but it’s not so unmanageable that you couldn’t pay it off in, say, six months or so. By switching to a 0% interest rate card for those six months (especially if you have 0% on balance transfers as well), you have six months’ worth of interest payments to put towards reducing your debt, thus lowering the amount of interest you’ll pay total. By the time the card’s introductory offer runs out, you could be back to the starting line as far as your creditors are concerned – and now’s a good time to change your spending habits. If you end up with a higher interest rate than usual, either don’t use your card, or ensure that you only make purchases you can pay off as soon as the bill comes, preventing you from accruing extra interest payments.

0% interest rate credit cards sound good, and there’s a good reason for that – they’re a type of advertising, designed to pull you in and (generally speaking) tie you to a higher rate of interest in the long run. However, they can be a useful tool if you’re smart enough and don’t feel the need to be overly extravagant, and can even be used to help you get out of debt. Check the terms before you sign up, and remember not to spend more than you can comfortably afford, and you should be fine.

Self build insurance takes care of your risk

Self build insurance is a special type of insurance designed for people who are building their own home that covers against damage or loss to your building, materials or equipment during and even before construction.

Building sites are often subject to a host of different risks. These can vary from the building catching fire or even falling down, heavy construction materials may damage your building during construction. Materials and equipment can easily be stolen or vandalised and while the contractor has a responsibility toward, perhaps, their own equipment, you as the owner are responsible for most of the risk or losses pertinent to your building site as well as the people who work on it each day.

Self build insurance will typically cover such things as fire, lightening, wind, forces of nature, theft, damage and vandalism not only the actual construction but also to materials and equipment.

It is not easy to find alternative venues to store equipment when you are building. Goods need to be on site and within easy reach especially things such as tiling and sanitary ware, not to mention the thousands of bricks and hundreds of packets of cement. However the repercussions of having your expensive Italian marble tiles and sanitary ware either disappearing or being damaged can be very daunting.
It is also a good idea to check with your insurance specialist whether they cover floods, acts of war or intentional acts by you owner.

Generally this type of insurance is geared toward building from scratch on vacant sites but it may be possible to extend it to cover conversions or additions.

You can even take out various other covers that are tailored to make sure that your investment is sufficiently protected; one example is public liability cover. As a responsible property owner it is vital that make sure that you are able to insure yourself against possible damage claims arising from either personal damage incurred by visitors or workers while on your construction site and also cover that will protect you from any damage or theft to their property and/or equipment.

Public liability also covers any damage to a neighbour’s property, such as a tree falling into their garden or landing on their car.

It is these types of claims that can seriously threaten the success of your project and this is when self build insurance really comes in handy as you can take out public liability cover as soon you take ownership of the policy.

An introduction to holiday property insurance

If you own a holiday home — either at home or abroad — or are thinking about buying one then you may already be aware of holiday property insurance. Your property here is, in many ways, just like your regular home when it comes to insurance. With a policy in place you will get financial help if something goes wrong. Without insurance, however, you might have to meet any costs out of your own pocket. So, policies in this sector may offer you:

• Buildings cover — to help you out if anything happens to the building itself either through accident or damage.
• Contents cover — to help you out if anything happens to the fixtures and fittings and personal possessions in your property.
• Liability/Legal cover — to protect you in the event that someone takes legal action against you because of something that happened in your property.

But, holiday property insurance policies may not be exactly the same as the policies you have covering your main home. Although they might work in the same way the kind of cover you will get here may not offer exactly the same benefits as standard.

It may be worthwhile thinking about what kind of cover you need here. You might, for example, start by thinking about your holiday home itself, where it is located and what you will use it for before you decide on a policy. So issues to consider include:

1. Will you be the only people staying in the property? If your holiday home is meant just to be used by you and will remain empty the rest of the year then you might want to check that your policy gives you the right cover for periods when the property is both occupied and unoccupied. Do you need to have certain security measures in place or to meet other conditions to get cover when you are not there, for example?
2. Will you rent the property out? If you will rent out your holiday home to other people (whether friends, family or people you don’t know) then you may need to check how well the policy will cover you and them if something goes wrong. Will it, for example, give you accidental damage cover for those periods when you rent it out?
3. Where is your property located? Some people own a home in the UK whilst others prefer to buy one abroad. If your home is located abroad then you may find that your policy might not cover you in certain instances. So, for example, you may not find that a policy will give you standard cover against natural occurrences such as earthquakes in certain parts of the world.

As well as basic cover elements you may find that some holiday property insurance companies could offer other benefits that you might find useful. For example, you may be offered temporary accommodation costs, lost revenue payments and emergency travel costs so that you could visit the property if something does goes wrong.

As with any insurance product you may find that shopping around and looking at different holiday property insurance policies might be a good starting point. This will give you an idea of the benefits on offer as well as the exclusions and, at the same time, you may well be able to do a cost comparison to help you out.

Understanding mortgages - how to find a good deal

With so many different types of mortgages to choose from and a wide variety of lenders offering these products, it’s little wonder that so many of us find it hard to get a good deal. It makes sense to do this however. The money you pay every month to service your mortgage will almost definitely be the largest payment you have to make. Getting a good deal could simply give you lower monthly repayments and the added bonus of knowing that you’ll pay back as little interest as possible.

So, what steps might you take to make things easier? The first step you may want to consider is what kind of deal might suit you best. Mortgages all come with the same aim — you borrow money to buy a property and then repay what you borrow and the interest charged by your lender over a period of years. But, not all products here work in the same way and there are many different types of deals to choose from.

You might want to therefore do some research first of all into the options on offer. The more you know here, the better. Even a quick visit to a lender’s website, a financial advice portal or an online mortgage comparison site should be enough to show you the basics of the deals you may want to consider.

Next, you might want to think about where you go to get your deal. A simple solution may simply be to pop into your local bank or building society to see what they have on offer. Many people, however, prefer to dig a little deeper to see what is on offer in the sector as a whole. Finding mortgages is in a way just like shopping for anything else — if you shop around then it may be much easier to find the best deal to suit you.

There are various ways of doing this. These include:

• The ‘Do It Yourself’ approach: Here you might simply do your own research by approaching lenders to gather information on rates and deals either from branches or from their websites.
• Online comparison sites: Many people like to do initial research here by looking at financial comparison sites. You might, for example, use a site to get a quick and simple snapshot of available rates and deals without having to do the work for yourself.
• Mortgage specialists: As an alternative you may prefer to use the services of a specialist who can help you find deals and rates across various lenders in the sector.

Mortgages may all work in much the same way but they are not always equal. For many of us the main aim here is to get an affordable monthly repayment that suits our circumstances and that keeps our interest costs as low as possible. Like many others before you, therefore, you may well find that shopping around before you sign up for a deal will make the best sense.

Gadget insurance makes life continue

In the era of technology we live in who doesn’t have at least one gadget, a mobile phone perhaps an iPod or a PDA, are you aware that you can take out separate gadget insurance for your electronic items? You can, easily. You can take cover out for your MP3 player, Camcorders and digital cameras, Satellite Navigation Systems and Laptops and PC’s.

The best thing is that with many policies you can tailor your cover too so your monthly repayments suit your budget. What this means is that you can take out cover for only one item, all your items or any amount in-between and you can keep adding additional items as you get them.

Your items will typically be covered against theft, accidental damage and even breakdown and your mobile telephone and PDA will be covered for accidental loss. Your cover extends around the world too as this is offered as a standard feature and as long as you can provide your receipt and your item is less than 36 months old you will get a replacement within 48 hours from approval of your claim.

Gadgets are becoming an essential part of our daily lives and they usually accompany us during our daily activities and we take them on trips. Gadgets keep us in touch with our friends, work colleagues and family, no matter where we are.

How would your life be impacted if your laptop stolen, would you be able to work? What would happen to you if someone took your satellite navigation system and your mobile phone while you were travelling in a foreign country?

Of course another option is to include your gadgets on your household insurance, as most people do, yet the cover you get this way may be limited. This is why you may need to consider taking out separate gadget insurance, think of the alternative.

You may not know which gadgets are covered and which are not covered under gadget insurance. Speak to your insurance specialist; they will be able to answer every question you have lurking in your mind.

Speak to your insurance specialist you may be amazed what gadgets you can insure, but it may be wise to discuss your gadgets in detail including excess payments and conditions for payment and non-payment. For example will they be covered if you leave them unattended in your car or if a friend was using them at that time?

Of all the things you may fear in the world gadget insurance shouldn’t be one of them.

Top tips when buying payment protection insurance

When buying a payment protection insurance policy, there are things to bear in mind to ensure that you get the right deal.

But first of all, what does the cover do?

In a nutshell, payment protection insurance - PPI – provides you with a tax free income every month if you lose your own due to involuntary redundancy, or accident or illness. It helps you keep financially afloat at an otherwise difficult time.

So how do you choose the right cover?

The main considerations when choosing cover are:

• Price – buying from a standalone provider rather than a high street bank or lender can make substantial cost savings
• How long do you want benefits to run for? (most policies run for 12 or 24 months in the event of claim)
• How soon can you make a claim after being made redundant or incapacitated? (this can vary among providers from 30 – 90 days after the covered event happens)
• And, eligibility. This is very important as buying a policy that you will not be eligible to claim on means it is not worth the paper it is written on. Here we look at it further.

Checking for eligibility
You will need to check to ensure that you will be eligible to make a claim against any policy you were thinking of taking out as all come with exclusions. The amount of exclusions could vary with some providers adding in just the most common ones and others including numerous.

The most common exclusions include you having to be in full time and have been working for 6 months at least prior to applying for the policy.

You also typically need to be living in the United Kingdom, the Isle of Man or the Channel Isles in order to take out cover.

Other possible exclusions
Do you be self-employed then you will need to check the cover very carefully before taking it out. Usually you will only be eligible to claim if you were to have to cease trading permanently and through no fault of your own.

You will also need to check carefully if you have an illness that is pre-existing as there can be a great deal of exclusions surrounding any ongoing illness that do leave you unable to work.

In summary, by looking at the your payment protection options carefully, you can choose the right cover for you.

Does my address affect my car insurance?

We all know where we live, but few of us know our risk address for car insurance – and that’s the key to how much we pay for our cover.

So what is our risk address?

To your insurance company it’s the place where your car is parked during the night for the bulk of the duration of your car insurance policy.

The insurer factors in the crime risk for that postcode area to set your annual insurance premium. The rule of thumb is the more crime in the area, the more expensive your car insurance will cost.

If you live at home with your family in a rather well to do area with a postcode and crime level to match, that relatively crime-free leafy suburb probably reduces the cost of your car insurance.

Then you start seeing someone who lives in a little more downmarket area, and you start spending a lot of time at his or her place, then your risk address changes.

You should call your insurer and tell them that your home address is still the same, but your car is parked overnight at the new address for typically ‘x’ amount of nights a week.

Then standby for a shock – because you may see an increase in your car insurance because of where he or she lives.

What happens if you don’t tell the insurer about your new risk address?

This can be fraught with problems, because if you read your policy small print, you’ll probably find this is one of those important details you are obliged to report.

It’s a strange world where your mum and dad don’t mind where you are, but your insurance company is upset if you don’t tell them.

The end result is if your car is vandalised, stolen or broken in to while parked at your boy/girlfriend’s, then your insurance company could invalidate your policy and refuse to pay out because you have broken the terms and conditions of cover.

Can the car registration documents list one name and address while the insurance show another person’s name and address?

The answer is, it doesn’t matter as long as the insurance company knows the risk address – and because the risk address is one of the factors that sets the policy premium, you can tell the insurance company what you like about where you live - as long as it is the truth of course!

Besides the ‘downmarket’ boy/girlfriend warning – no personal offence meant, of course – night workers should also consider what they tell their insurance company about their risk address.

If you work permanent nights and drive and park your car at work, then technically, this is your risk address and you should tell your insurer to make sure your policy is not invalidated if something happens to your car while parked at work and you need to make a claim.

Money Saving Tips

Whether times are good or bad financially speaking, there is rarely any valid reason to waste money by paying more than is necessary for products and services. It is equally unnecessary to have money tied up uselessly.

Many people are surprised at how much money they can save, and how much money they can ‘free up’ by progressing a few basic ideas that are both good for the pocket and in some cases, good for the environment also.

Manage the consumption of heating energy.
Whatever the fuel source is, fuel is expensive. The advantages of insulation and energy efficient boilers are well known, but is it necessary to heat the house to T-shirt level? Turn the thermostat down a degree or two and put on a jumper – the savings will be significant over a winter.

Shop Around.
There is something to be said for convenience but don’t give in to the siren-like calls of that one big shop just down the road. Be prepared to walk around a little to compare prices. Even easier, use the Internet or phone to compare prices on those slightly bigger purchases. The savings can be dramatic.

Negotiate!
Many people in the UK find haggling and asking for discounts to be something of an embarrassment. This is completely different to many other European countries where the first asking or ticket price is rarely paid. Sometimes asking for that deal or reduction can save a small fortune. Be prepared to haggle and if necessary, to walk-away and go elsewhere.

Buy through the Internet
The Internet is not only useful for comparing prices of products on the high street, but purchasing items through the Internet can also save large amounts of money. Many retailers will offer significant discounts for on-line purchases, as it is far cheaper for them to sell online than through a normal store.

Make more food.
The cost of ready-made meals (lunches, take-aways etc) can be very high when checked against what is actually in the package. Convenience is fine, but buying fresh food and preparing more lunches and meals will save a lot of money each month and very possibly be healthier.

Throw Away Less.
Instead of having that quarterly ‘trip to the tip’ to clear out the garage or loft, consider instead how much of it could be sold. These days it is very easy to sell surplus items through websites such as Amazon or EBay etc. The prices received may not always be high, but again over a year they could mount up. Or why not do a boot fair?

Buy in Bulk.
In many areas of life such as foodstuffs, DIY materials and household goods, it is always possible to buy at huge discounts if buying in bulk quantities. Contact neighbours and families to form a ‘purchasing association’ and make these sorts of purchases in larger quantities. The savings for everyone will be very worth having.

Leave The Car At Home
Cars are VERY expensive to run and a massive cost component in the budget of many families. Statistics also show that the vast majority of car journeys are short hop ‘convenience’ journeys to the local shop etc. Try walking or using a bicycle. This will also be healthier.

Check Baseline Household Costs.
In the modern world there is ferocious competition between utility companies (phones, electricity etc) and as a result, some staggering deals to be had. This is also true in financial services covering things such as your household, car insurance or savings policies etc. Check around to see what these are and be prepared to change supplier – it is easy.

Increase DIY.
Many minor jobs around the home do not require a specialist tradesperson. Labour costs are expensive and if it can be safely done on a DIY basis then the purchase of a good DIY book and the liberal use of some elbow grease could save a lot of cash!

• Lots of money can be saved in day-to-day life
• Shop around
• Don’t throw things away but sell them instead
• Be prepared to do more yourself.

The Easy Way to ‘Get Something Back’ – Reward Credit Cards

We are all aware of the dangers of uncontrolled credit card spending where people find that their balance gets out of control due to the very scary downward spiral created by having to pay ‘interest on interest’. Many of the horror stories are obviously true. They do not tell the whole story about credit card use however. Research done at the University of Warwick showed that no less than 58% of all credit card users pay off the full amount on their cards every month.* This means that an awful lot of people are using credit cards merely as an attractive cash alternative and not as a line of credit. It is this market segment that can benefit most from the rise of ‘Reward Credit Cards’.

Reward Credit Cards should not be confused with store reward cards with which you can earn ‘loyalty points’ for every purchase that you make. They are instead fully functional credit cards linked to one of the major credit card networks (e.g. Visa, Mastercard, American Express). This means that there is essentially no difference in functionality between them and the credit cards that you may already have in your wallet. The big difference however is the fact that you will be rewarded every charge that you make to the card. Deciding on which kind of reward credit card you get will depend to a large extent on what kind of rewards you would prefer. The main types are:

Cash:
With this type of card you will get a small percentage of everything (usually around 1%) back from every purchase that you make. This type of card is ideal if you are a ‘heavy user’ of your credit card.

Miles/Travel:
Many reward credit cards are linked to frequent flyer programmes or to travel reward companies (e.g. Airmiles). This means that they offer you the opportunity to convert your rewards into flights and/or holidays. This is a very attractive option that is often used by frequent travellers to further boost their mileage accounts.

Points:
Some credit cards are linked to store reward cards and using the card will earn you extra points (on top of what you would normally earn for shopping) on the store’s loyalty system. This is a great way to make sure that you have something available for that ‘something special’ from the store every now and then.

Reward credit cards is a great idea and the benefits that they deliver are often very desirable. It is however, sadly, often the case that people misuse or misunderstand them by:

• Taking out reward credit cards when they do not pay off their full credit card bill every month. In such cases people’s efforts would be much better spend in finding a better rate of interest rather than chasing after rewards.
• Some people would sometimes spend more than they initially intended to just to be able to earn some more rewards.

Those consumers who can manage to steer clear of the above pitfalls will very often find that reward cards are one of the best ways to ensure that some very special ‘extras’ come their way.

In summary:

• Reward Credit Cards are full-function credit cards offering a variety of rewards
• The most common kinds of rewards are: Cash, Travel Benefits and Store Points
• People who do not pay off their credit card bill every month should avoid reward credit cards.
• Reward Credit Cards should not be confused with store loyalty cards

* Information on the relevant research paper, entitled The Cost of Anchoring on Credit Card Payments, can be accessed at: http://www2.warwick.ac.uk/newsandevents/pressreleases/research_finds_customers146

How to clean up your credit profile when applying for a mortgage

In order to maximize your ability to get the best interest rate possible, you need to know how to clean up your credit profile when applying for a mortgage. Improving your credit rating can make a tremendous difference in your ability to get a good interest rate and good terms on a mortgage. Your credit profile is the picture of your credit risk used by lenders to determine your likelihood of repaying a loan. There are some simple things that you can do, even in the waning moments before buying a home, to clean up your credit profile.

First, check your credit file for anomalies. There are actually three main credit agencies that are commonly used by lenders and other entities who want to know your credit rating. The items in your credit, such as your loan balances, repayment history, late payments, and other factors are reported on and updated by creditors you have been involved with. Some creditors are more prompt than others at updating records. Additionally, there are mistakes that do occur. Perhaps a false late payment was reported. Maybe there are loan balances still showing on your credit profile that you no longer have. It is important for anyone wanting to get the best mortgage rate to be sure to check your credit to make sure you are getting the rate you deserve.

Another important and often overlooked factor that contributes to your credit score is your placement on the electoral roll. To some people, properly registering to vote is more of a political and civic responsibility. However, lenders want to be sure, just as you do, that your credit profile is accurate and up to date. This means that it shows your current address and provides proof that your profile is current. The three credit agencies purchase the updated lists of the electoral role at the end of each year to create the current snapshot for your profile. Some lenders will decline a mortgage application simply because the applicant is not listed on the current electoral role. Their feeling is that your credit profile may not be current if you are not on the role.

The most important thing to keep in mind is that the credit reporting process is not without flaws. Although it serves as a fairly reliable method for creditors to assess your credit risk, there is potential for errors in reporting. Ultimately, you want to get the full benefit of the work you have performed in establishing good credit. A good general rule is to take a look at your credit report at least once a year and make sure that all of the information is accurate and current.

Remember these key points to understand how to clean up your credit profile when applying for a mortgage:

• Check your file for anomalies
• Make sure all of your information is accurate and updated
• Make sure you are on the electoral role as lender’s consider this factor