Fears are growing over the safety of the Icelandic banking system after Glitnir, had to be bailed out by the government 2 days ago. The Government was force to take control of Glitnir as depositors fled the country’s third-largest bank.
This has be of particular concern for savers in the UK since the remaining Iceland’s big banks, Icesave and Kaupthing Edge, are also two of Britain’s most popular online savings providers and are showing signs of weakness.
Over the past 10 days, the CDS rate for both Kaupthing Edge and Icesave have rocketed when compared with their competitors such as Barclays and Alliance & Leicester. Shares of Kaupthing fell four per cent at one stage while those of Landsbanki (Icesave) were down five per cent.
Iceland is particularly sensitive to global volatility in the banking sector due to the rapid growth of its finance sector with its reliance on the international money-markets for funding instead of High Street savers’ cash. Glitnir failed partly due to the scarcity of money on these markets following the recent collapse of Lehman Brothers.
Kaupthing said in a statement it has enough cash to pay all of its obligations for ‘at least 360 days’ and increased the level of savers’ money in its coffers relative to its loan book by 8% to 44% between April and June. A statement released on Icesave’s website yesterday said it has a deposit to loans ratio of 63% and €8bn sitting in its coffers.
Savers in both banks shouldn’t worry since both banks are covered in the UK by the Financial Services Compensation Scheme up to the maximum limit of £35,000.
Source: http://www.thisislondon.co.uk
Over the past ten years there has been an increased in the number of credit cards available. So much so that only a few people actually know the different between the three latest types of credit cards. Below is a guide to the latest type of credit cards and the advantages / disadvantages of having them.
Cash Back Credit Cards
Cash back is a loyalty scheme that rewards customers when they use their credit card to make purchases. You will receive a cash back percentage of your purchase amount each time you use your card which is usually totaled up and paid to you as an annual lump sum.Generally, these credit cards offer cash back between 3 to 6% on purchases. However common purchases, such as gas, groceries, and prescriptions, will usually only get you 1 to 3% back.
The advantage of using a cash back credit card is that everything you buy is a little cheaper as cash back is effectively a discount on all spending. To benefit from cash back credit cards you will need to pay off your card balance in full and on time each month or you’ll risk paying interest and the charges. The interest and charges you will pay will outweigh the loyalty rewards or cash back gain. It is important to set up your payment by credit cards to ensure payments are made in full and on time.
Balance Transfer Credit Cards
These type credit cards allow you to put your existing balances on other credit cards on this new card, and often be able to get a 0% interest rate for a short time usually 5 months, 6 months or 9 months. This means some real savings, if you do not fill up your other credit cards again. Of course you must always meet at least the minimum monthly repayments with your new card as the intro deals do not mean you have nothing to repay; they simply mean you will not be charged interest on what you owe. Watch out for fees, though, some cards will not charge you at all for transfers. These charges are becoming more and more common as card providers try to recover some of the money they lose by offering interest free periods. The charge is typically 2.5% of the balance transferred.
Air Miles Credit Cards
These credit cards give you air miles for your purchases and they can be used to get discounts toward flights, or even free flights. Air miles work like a point scheme, where you rack up mileage that you can then exchange for flights to different destinations. Usually these points can also be used toward purchases in certain stores to give you some good discounts. Be careful to read the fine print as some Are Miles credit cards has hidden charges. There are often hidden costs when claiming “free” flights. This occurs when the flight itself is free, but any applicable taxes, fees and surcharges are on top.
Many people are suffering from large credit card debt and the number of household with credit card debt of over £1000 is growing at an alarming rate. The problem with credit card debt is that interest can accumulate very quickly and this can result in larger monthly bills, which can lead to late payment. This in turn can result in even higher interest rate. This spiral can quickly get out of control.
The key to reducing credit card debt is by breaking the spiral and taking control of your finances. Below are three easy ways to do just that.
Ask Your Bank to Lower Your Credit Card Interest Rate
You can ask your bank to lower your rate. The best way is to make your request reasonable. For example, you call your bank and tell them that you have been offered a lower rate by another card provider, and ask them to match that rate. If they refuse, all you have lost is a phone call but there is a very good chance they will lower your rate.
Never pay a credit card late fee
Make sure you always pay at least your minimum payment on time so you will avoid paying a credit card late fee. If you are unable to pay your minimum payment on time, it is important to call your bank and inform them of your circumstances, they may grant your more time.
Most banks often raise your interest rate by 50% or even more if you miss the minimum payment deadline. But if you do miss a payment try to get your bank to waive the fee. You may to get an excuse such as you were ill or out of town.
Get a New credit Card
If your bank refuses to lower your rate or waive your late payment fee, simply search for a lower rate card and transfer your balance. There are plenty of banks out there eager to accept balance transfers.
