A guide to 0% balance transfer cards

Nowadays a lot more of us are taking out credit cards that come with balance transfer deals. The deals you may be given here will vary from card provider to provider — one of the most popular options is that given by 0% balance transfer cards. Let’s take a look at how this might work for you.

A credit card that has any kind of balance transfer offer comes with a basic deal. This is designed to encourage new customers to sign up for a card. So, if you transfer across your balance from one or more existing credit cards to a new one then the card provider will offer you a kind of discount as a reward. This discount takes the form of a reduced interest rate or, as we’re looking at here, zero interest.

So, with 0% balance transfer cards you may well find that the balance that you transfer to your new credit card company does away with your interest charges for a time. Your previous card supplier may have been charging you high rates of interest on the money you owe. Your new supplier may be offering you a better solution.

The way this works is simple. Your new card supplier will offer you a deal that gives you a period of time where the balance you transfer across has no interest at all charged on it. This is not likely to last forever — deals may be set up to last anything from a few months to over a year. And, once the deal is over, interest will be charged on any of the balance that you still owe at the rate agreed when you signed up for the card.

You might find that some 0% balance transfer cards come with additional offers to make them look more attractive. Some, for example, may come with 0% interest deals on new purchases. So, for example, you might be offered a deal where you get 0% charged on your transferred balance and on anything you spend on the card. In some cases the two deals may be offered for the same period of time. In others the new purchases deal may only be offered for a shorter period.

One thing that you may want to think about here when you are comparing cards is the standard interest rate on offer. This is the rate of interest that will be used when your deal is finished and it may also be the rate that you have to pay on new spending. In some cases the rate here may be quite high so you may want to shop around to find the best deal.

0% balance transfer cards may well, however, be a suitable solution for some consumers who want to try and repay their credit card borrowings. Many people find that they get some breathing space here where they don’t have to worry about having interest added on to their debts and can make a real effort to pay them off once and for all.

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

If you are thinking about applying for a mortgage, it makes sense to be sure that your credit profile is as good as it can be. By following the tips we have put together here, you can be sure that there will be no surprises for you or your lender.

• Check your credit file. This is something you should do regularly anyway, but it is even more important before you apply for a mortgage. For a very small fee, you can obtain copies of your file from the credit reference agencies, Equifax, Experian and Callcredit. This will let you check that the details they hold are up to date and correct. If any details are wrong, such as showing that you have missed a payment when you haven’t, ask for the file to be corrected.
• Set up direct debits. If you have regular outgoings, such as mortgage payments or utility bills, set up direct debits to pay them. Not only will this make it easier for you to manage your money and reduce the chances of you missing any payments, it lets lenders see that you are organised and committed when it comes to paying bills on time.
• Settle outstanding debts. If you have missed any payments for anything, get the account up to date as soon as possible. If your credit file shows that you haven’t stuck to an agreement, your credit score could well be reduced as the lender may see you as a higher risk.
• Get on the electoral register. Make sure you are properly registered at your current address, as all lenders have to verify your identity in order to comply with money laundering regulations and prevent identity theft. If you aren’t on the electoral role when you apply for a mortgage, the lender may reduce your credit score or even reject your application altogether.
• Don’t make lots of applications. In the months or weeks before you apply for your mortgage, make sure that you don’t apply for lots of other things, like loans or credit cards, which require credit checks. Every time you are credit scored it is recorded on your file, and lenders may see a lot of credit checks in a short time as a sign of someone who might be struggling to manage their money. If you see credit checks on your file that you don’t remember, ask for them to be removed.
• Check any related accounts. Your own credit file might be clean, but it is important that your partner or anyone else who is applying with you checks their file in the same way as any adverse information will also affect your application.

Remortgages and how you can play less for your home

Signing up for a mortgage is a huge commitment. It may also be one of the largest and longest-lasting agreements you will make in your life. When you sign a mortgage, you usually make an agreement with a creditor to borrow money and to pay it back to them over a matter of years. If interest rates are high when you sign up for your mortgage, you may pay high interest rates for the duration of your mortgage agreement unless you have a variable interest rate or your remortgage the house. High interest rates can add thousands of pounds to the original cost of your house. Remortgages allow you to renegotiate a mortgage deal that is more beneficial than the one you have.

There are times when it may be beneficial to remortgage a home and it is important for homeowners to know when that is. If interest rates have dropped considerably since the time that you first bought your house and entered into your mortgage agreement, you could save money by remortgaging your home. If you are making very high mortgage payments and have an excellent credit rating then you could take a strategic look at your mortgage to see whether you could arrange a better deal for yourself through the benefits that remortgages offer. Taking advantage of lower interest rates could literally save you thousands of pounds in the long run.

There are times when homeowners choose remortgages to borrow more money than is owed on their house. They do this so that they can use the extra money just as they would a loan from the bank. They choose remortgaging for many reasons, most of these related to simplifying their finances and maintain just a single loan. This type of remortgaging lets the owner use the money for things such as a holiday for the family, adding an extension to the house, paying for a large item such as a car and more.

The first step towards remortgages and taking advantage of other mortgage options is seeing whether you qualify. You should be able to get a remortgage at any bank or building society that offers mortgages as they will usually also provide remortgaging. It is important to remortgage your home when interest rates are low otherwise you might not see the types of benefits that you are hoping for. Once you have applied for a new mortgage, which is what in essence you are doing, you will need to wait to see whether or not you have been approved. If you are turned down by one company, it is not the last of your chances. A financial adviser may be able to help and match you to the right deal as most lending companies use a slightly different formula to qualify customers for loans, and the adviser should know the right company to approach. .

Getting the best deals on your insurance

We all need some form of insurance at some point in our lives. Insurance can provide some form of financial reassurance when we hit the hot spots in life. There are many types of popular insurance such as home insurance, car insurance, unemployment insurance and many, many more, some of which are compulsory, such as car insurance. Getting the best deals on your insurance has become a lot easier in recent years especially due to widespread use of the Internet.

There are many online resources available for people looking for the more popular types of insurance. You can usually find an insurance comparison web site that will compare some of the main, basic features of insurance policies for you. Even if these web sties do not give you all of the information you will finally need to make a decision, they can serve as a good launching pad for your insurance policy search. These web sites will give you a clear idea of current rates and the standard features you can expect on most insurance policies of that type. They offer a place to begin your search.

Once you have gathered some foundational information on a few insurance policies you can begin to investigate deeper and gather more information on a few of the policies that appealed to you. If there is specific coverage that you need that does not necessarily fall under the norm, it is in the more details policy descriptions that you will find the information you are looking for. By comparing policies first for their basic features and then drilling down deeper you will have more chances of getting the best deals on your insurance.

Buying insurance through the Internet is probably the least expensive way to purchase insurance. It can be a good way of getting the best deals on your insurance. The minimal manpower and cost of running an Internet web site usually gets passed on to you the customer. Even if you are a person that does not use the Internet very often, it is worth the savings to find a way to use the Internet at least for insurance purchases.

Getting great insurance deals

• Shop around to compare policies
• Visit an insurance comparison web site
• Find a few policies that have the basic features you want
• Investigate selected polices further to see if they fully meet your needs
• Sign up with the right policy for you

You can find all types of insurance policies online sold by all different types of insurance companies. The benefit of this is that you have a myriad of options and policies to choose from. If you have special insurance needs or things that potentially place you in a unique insurance category, your best changes of finding the exact policy that you are looking for is online.

Actually buying insurance online is fairly easy and it is an excellent way of getting the best deals on your insurance. You will in most cases need a major credit card. Sometimes a debit card will do. The important thing, as with buying from any web site, is to ensure that the page where you enter your credit card number is secure. This prevents interception and theft of your personal details.

Car loans v. forecourt finance

If you are on the market for a new car it is important to plan and to prepare for it. The better prepared that you are, the higher the chances that you will have a satisfying car buying experience. As a shopper, you not only have to research, shop around and narrow down your choices on the car that you want, if you plan to finance or use a loan to buy your new car you will also need to shop around for car loans. By shopping around for a loan, there is a very strong likelihood that if you will find a suitable car loan for you. A good car loan is one with minimal fees and an excellent interest rate. This alone could save you hundreds, if not over a thousand pounds in costs.

When you are looking for a way to finance your new car you usually have at least two options: a car loan from a bank or forecourt financing. Getting car loans from a bank requires just a little bit of planning, getting a forecourt loan is something that can be done spontaneously and on the spur of the moment. In fact you can often be preliminary approved for forecourt finance while you are standing at the dealership buying the car. It is important to know the different between the two as well as to know which of these two options is right for your situation.

Financing a new car:

• Decide on the car you want to buy
• Decide to apply for a bank loan or forecourt finance
• Shop for your car
• Pay for your car through your loan or forecourt finance

As with any kind of purchase at all, it makes sense to learn what you are signing up for, to weigh your loan options and then to choose the credit line that will offer you the best deal for your individual needs. When a person chooses a car loan as the funding for a new car, they usually have to get pre-approval for that loan from a bank prior to the day the actually shop for the car. Some people choose to get their loan from the bank where they do their everyday banking or they shop around and will sign up with the bank that has the best deal. Ultimately, the better your credit record, the more choices you will have to shop around for car loans.

Forecourt finance is a line of credit that is often offered to you by the dealership itself when you are shopping for a car. Forecourt financing comes in two distinct options: Hire Purchase (HP) and a Personal Contract Purchase (PCP). Qualifying for forecourt financing is often much easier than qualifying for a car loan because their requirements are not as strict when it comes to your credit record. This means that the interest on forecourt financing is usually much higher than that of car loans.

Saving on Car Insurance

Vehicle Insurance is obviously not an ‘optional extra’. Apart from the fact that you will be exposing yourself to huge liability claims if you drive without insurance it is also illegal to drive anywhere on a public road in the UK without your vehicle being properly insured. Since you cannot avoid having to pay for insurance it would make a lot of sense to do everything in your power to make sure that your premiums are as low as possible.
The worst way to achieve insurance savings is to ‘underinsure’ your vehicle by taking out inadequate cover.

Another common ‘saving’ that can turn out to be very costly is to accept a ‘lowball’ quote from an obscure company that might not be able to honour the insurance contract that they have with you. The best ways to save, on the other hand, all have to do with doing a bit of homework to ensure that you are assessed as ‘low risk’ by insurance companies. This will of course translate into significant savings on premiums.

Before we look at specific examples of how you can improve your risk profile, it is worth mentioning that you should always ‘shop around’ a bit before accepting an insurance quote. This may seem like a lot of hard work, but there are currently many services around that will submit your profile to a large number of insurers in exchange for a ‘finder’s fee’ (paid by the insurer, not you). Making use of such a service can be a very effective way of slashing your insurance costs.

There are some aspects of premium pricing that will be very difficult to change, short of growing older and changing your car! This is because younger drivers face higher premiums as do very powerful ‘supercars’. The story does not end there however. There are several kinds of discounts available to those who are perceived to be lower risk drivers. Be sure to mention the following when you apply for a quote:

• The length of your ‘no claims bonus’ – If you did not make a claim in the recent past insurers will automatically place you in a lower risk category.
• The ways in which you will use your car – ‘Social use’ (i.e. not using the car to drive to work) will normally lead to lower premiums.
• Membership of professional organisations – Some insurers will offer you a discount if you are a member of a respected professional organisation.
• Your age – Some insurers will lower their premiums once a driver reach age 55, only to raise it again when he/she reach an advanced age. You should therefore be sure to make the best of your ‘golden premium years’!
• Safety features – The installation of advanced safety features could lead to lower premiums.

Some other ways to lower your insurance costs are the following:

Apply for combined cover. Insuring more than one vehicle with an insurance company could lead to lower average premiums on both (or all) of the insured vehicles.

Elect to pay a higher excess. If you offer to pay a higher level of excess in case of a claim it means that you assume more risk yourself, leading to a lower monthly premium.

Choose the right level of cover. For a new vehicle it makes perfect sense to take out comprehensive insurance as replacement costs will be very high. If you drive an older car it might be worth it to just take out insurance for ‘Third Party, Fire and Theft’.

Summary:

• It is illegal to drive without insurance in the UK. Insurance premiums are therefore an unavoidable expense.
• It pays to ‘shop around’ for the best insurance quote.
• If you can somehow prove that you are a ‘low risk’ customer your premiums will be lowered.
• Some other ways in which savings can be made are applying for combined cover and electing to pay a higher excess.

ISA’s – Making Use of Your Tax Free Savings Allowance

Most people are vaguely aware of the fact that they can save some money on a tax free basis every year, some would even be able to tell you that it can be done through something called and Individual Savings Account (ISA). It is the case however that relatively few people make use of ISA’s as an investment vehicle. Part of the reason for this can perhaps be found in the fact that ISA’s are traditionally seen as quite complex and difficult to manage. The UK government tried to address this by overhauling the rules governing ISA’s, with new rules coming into effect in April 2008. The purpose of this short article is to briefly explain how ISA’s work and what the implications of the new ISA rules are for new investors.

Under the ISA scheme an individual can invest up to £7200 per tax year on a tax free basis. There are two way of doing this, they are:

Cash ISA’s: Cash ISA’s are, as the name suggest, simply cash amounts that are saved under the scheme. The most important thing to remember is that there is a contribution limit of £3600 per tax year if you choose to invest in a Cash ISA.

Stocks and Shares ISA’s: With this type of ISA investors invest in the stock market, usually through some form of managed investment fund. The limit for investment is the full £7200 ISA allowance. It should be noted that the amount that you can put in this type of ISA will be directly affected by how much you have already placed in a Cash ISA. If, for example, you invested £2000 in a Cash ISA, you can only invest a further £5200 in a ‘Stocks and Shares ISA.

You can invest your funds in a Cash ISA, in a Stock and Shares ISA, or a combination of both. If you want to make full use of your Cash ISA allowance and also invest your full ISA allowance (£7200) it will of course have to be a combination since there is a £3600 limit on the Cash ISA.

The big question that investors often ask is whether they should go for cash or ‘stocks and shares’.

The main benefits of Cash ISA’s are dependability and security. Placing your money in a Cash ISA is comparable to putting your money in a bank savings account, but with the added benefit that any interest gained will be tax free. It is therefore the perfect place to invest money to earn interest and maximise tax savings while still having relatively easy access to your funds.

Stocks and Shares ISA’s will be invested in the stock market. Any capital gains that you make on your investment will be tax free, but you will have to keep in mind that you are exposing yourself to the ‘ups and downs’ of the market and that your investment could therefore both increase and decrease in value. Stocks ISA’s, in common with other stock market investments, should primarily be seen as a long term investment.
It is relatively easy to take out an ISA since they are offered by many banks, building societies and investment fund managers. As with all financial products you should be careful to read the small print before committing yourself. It is also always a good idea to get independent advice before making major financial decisions.

Summary:

• ISA stand for ‘Individual Savings Account’ and refers to the amount that you can save tax free every year.
• The rules governing ISA’s have recently been simplified, making it much easier to make use of this very important investment channel.
• There are two types of ISA namely ‘Cash ISA’s’ and ‘Stocks and Shares ISA’s’
• Cash ISA’s are ideal for short term financial management while shares ISA’s should be seen as long term investment vehicles.

Comparing Mortgages

Financial services are often confusing for the layman, made all the worse by the fact that the stakes can often be high; if you don’t know exactly what you’re getting into, most people believe it’s easy to make mistakes that could cost them thousands of pounds. The worst offender for striking fear into the hearts of potential homebuyers is the mortgage. How does it work? What’s the difference between a fixed-rate mortgage and a variable one? Are there any other options? After all, this is likely to be the biggest loan you ever take out – it’s hardly surprising that many people get a little nervous about the whole situation.

However, it doesn’t have to be this way. Mortgages are not all that confusing and – while they are certainly important – you don’t have to feel as though they’re completely unintelligible.

Generally speaking, mortgages come in two (sometimes three) forms: fixed-rate, variable, and capped:

• Variable mortgages fluctuate along with the interest rates as set by the Bank of England, and as such are not entirely dependable – you could well end up paying out a different amount one year (higher or lower) than you do the next. However, it’s entirely possible by this logic that you could end up saving money on your mortgage if the interest rate drops; as such, it’s a very popular choice.
• The alternative to a variable mortgage is to go fixed-rate. This means that your mortgage provider will give you a set interest rate at which you pay back your mortgage for a couple of years at a time, after which the rate may change. Despite this, it’s still a lot less likely to fluctuate than a variable mortgage, which has several advantages: firstly, you know down to the penny how much you have to pay towards your house every month, meaning that you can budget a lot more effectively; and secondly, you can save money if the interest rate rises above the level at which your rate is fixed. However, there are some downsides; it’s likely that your mortgage provider will charge you a fee for this service, which you’ll likely have to pay up front, and you could end up paying more than you have to should the Bank of England base rate drop below the rate you’re currently paying.
• A third, but much rarer, alternative is the capped mortgage. This offers you the best of both worlds; while it’s variable with the Bank of England’s interest rate, your mortgage provider will ensure that there is a fixed highest interest rate you can pay, in effect meaning that you’re never wholly susceptible to the whims of the marketplace. While this sounds great in theory, there’s often a large fee to pay upfront that makes this unsuitable for many borrowers.

While there are more complicated mortgage packages available (especially for those who are self-employed, or have poor credit ratings), the choice generally comes down to either fixed-rate or variable. To find out which might be better for you, consider talking to a mortgage advisor or other professional, and make sure you know what you’re signing up for before you put your name (and a large chunk of money) on the line.

Understanding Car Insurance Excesses

The cost of motor insurance often represents one of the largest payouts you’ll make for the privilege of owning a car. Unfortunately, it doesn’t look likely to get better any time soon. A recent survey found that the average cost of car insurance premiums in the UK is now £514.38 – the highest figure since records began in 2005, and an increase of 5.8% over last year . Of course, there are ways of reducing your premiums, but these can involve making concessions about who is able to drive your car (cutting out named drivers, for example), having a mileage limit placed on your vehicle, or fitting additional safety devices such as a an industry-standard alarm. For whatever reason, these measures may not be suitable for your insurance needs. But what can you do? Having a larger excess on your car insurance is one of the easiest ways to save money on your premiums.

An excess is defined as the amount you have to pay before your insurance kicks in. Let’s say, for example, it’s set at £100. You pay the first £100 of any claim you make, and the insurance picks up the rest of the bill. This works out great for any major damage – if you write your car off and it becomes unfeasible to repair it – but means that you’re less likely to claim for small damages. If you’re involved in a minor incident that’s only going to cost £150 to repair, you’re not likely to cash in your no claims bonus for the sake of the £50 you’d get from the insurance company (as you’re still liable for finding the first £100 yourself).

If you choose to have a larger excess on your policy, your insurance provider will likely offer you a discount on your cover. This is because you represent a lower financial risk to the insurance company, even if you’re still a relatively high risk in terms of your age, gender, or history (in fact, the riskier you are, the higher an excess your provider will generally insist on before they’ll insure you anyway). If you crash while you have a high excess, the insurance company isn’t liable for as much of the repair bill, and so is no worse off as a result.

However, while it might save you money, it’s important to note that paying the excess is a prerequisite of getting your car repaired. If you can’t afford to meet the bill, you won’t be driving anywhere for a while, as you won’t be able to make the claim. As such, it’s absolutely crucial that you don’t get an excess on your policy that’s higher than you could legitimately expect to repay in the event of an accident or other damage to your car.

While car insurance excesses can be a great way of manipulating your premiums in your favour, don’t be fooled into thinking that it’s an easy solution to every high insurance fee. You can end up getting burned pretty badly if you overestimate your ability to pay, especially if the damage is only minor, but at the same time you can save yourself quite a bit of money.

Secured loans v unsecured loans

There are times in everyone’s lives when things would be made much easier if they could get their hands on a large or significant amount of money. Borrowing money could be a solution to a situation like this when it arises. The main two ways of borrowing money are through secured loans or unsecured loans. Borrowing money from a lender is mostly considered to be a normal and established way of buying things that you would not otherwise have the money for.

If you find yourself in a situation where you want or need money to borrow, you will have to look around at the various loan options available to you. It is a good idea to try to remember that different lenders will require you to meet differing criteria. So if you are turned down by one bank, that doesn’t mean that you will get declined by another bank. However, repeated applications for loans can flag up a warning sign to lenders who will look at your credit file when accessing your suitability for a loan, so do bear this in mind.

If you need a relatively small amount of money, you could try to get an unsecured loan. For larger sums of money, you will probably be required to apply for a secured loan.

Applying for secured loans

• Establish how much money you need to borrow
• Do you have a good credit record?
• Will you use your own bank or another?
• Apply for the loan

An unsecured loan is a loan that is given to you without any security. This means that the lender has a limited number of ways of getting their money back if you failed to pay back the loan. This is as opposed to a secured loan that will be given to you against a valuable item that you own, such as your home.

When it comes to getting an unsecured loan from a bank or a lending institution of some kind, the only way for this to happen is if you have a good credit record. If you have bad credit and have showed signs of not being reliable in paying bills in the past, you may find that your only options for money are secured loans.

Secured loans are loans that are taken out against a major asset, such as your home. If you fail to pay back a secured loan, then included in the agreement is the condition that the lender/creditor has the legal right to take possession of your home for the use of recovering the money that they have lent you. A secured loan is usually considered to be more flexible, letting you borrow higher amounts of money than an unsecured loan, due to the fact that the lender has some security in getting his money back if you defaulted on repayments. In addition to this, most people can qualify for borrowing much higher amounts of money with a secured loan than with an unsecured loan.

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