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Business, Checking & Savings, Credit Cards, Financial, Financial Information, Financial Services, Interest Rate, Loans, Money

Rate Tarts Are In A Jam As 2 Million Balance Transfer Applications Are Rejected

The latest credit card market analysis from uSwitch.com, the independent price comparison and switching service, reveals that almost 2 million consumers have been rejected for balance transfer deals in the last year. This represents 57% of all credit card rejections, forcing these consumers to fork out £535 million in interest payments in the next 12 months as they are unable to switch to a new provider. In total, £3.5 billion of credit card debt is now stuck on interest bearing credit cards as consumers cannot switch to their next 0% deal.

Across all types of credit card, more than one in ten consumers, totalling 3.32 million, has had an application declined in the past twelve months. This is a clear sign that providers are still acting on the air of caution and only lending to those with a squeaky clean credit record. This is a huge problem in the credit card market, particularly for rate tarts. In 2008, consumers carried out an average of 650,000 balance transfers every month. For many people, the 0% party really is over as they have reached a dead end.

Alongside a drop in acceptance levels, the number of balance transfer deals available is also a problem for consumers. There are now 178 balance transfer credit cards, representing 74% of all credit cards compared to 204 this time last year. The biggest casualty of this has been the 10 month deals which have fallen by 83% to just 1 deal.

With just one provider, Virgin, offering a 16 month 0% balance transfer deal, consumers are pushed towards the more popular six month balance transfer deals which represent a third of the market (33%). However, with the average balance transfer fee currently at 2.9% consumers will have to pay £54.09 on the average balance of £1,846. Unless consumers are planning to pay the credit card balance during the six month offer period, this could be a costly way to move money around.

Louise Bond, personal finance expert at uSwitch, comments: “We can’t ignore the fact that the country is in economic turmoil – a situation which has been catalysed by bad consumer credit. The knock on effect for credit card customers is that those with a less than perfect credit history could find themselves being turned down for the next best 0% deal, forcing them to pay interest. This is a huge problem for switchers as these people have accumulated debt based on the fact they do not have to pay interest on it.

“The knock on effect of rejected credit applications is that it will appear on your credit report and, in the long term, have a negative impact on your score. With this in mind, it’s important to check your report before applying for products to make sure you stand a good chance of being accepted – constantly reapplying to different suppliers will make the situation worse. If you can’t get another credit card, think about using a 0% overdraft, an unsecured personal loan or, if there are no other options and debt is getting out of control, speak to your provider or seek professional advice.”

Bond’s credit card tips:

• Check your credit report before making any applications for credit.

• If you are rejected for your next credit card, do not any further applications until you have checked your credit record. Failed applications for credit will have a negative impact on your credit score.

• You must also close down any credit card accounts you are not using. The available balance on these accounts will be taken into consideration when you are applying for a new card.

• Missed credit card payments also impact your credit score, the best way to avoid this is to set up a monthly direct debit for the minimum payment.

• If you are not planning to pay the balance off in full during the 0% balance transfer period you should consider life of balance cards. This will provide one low rate of interest for the entire time the balance is on the card.

• Depending on which issuer your balance transfer card is managed by, you may not be allowed to switch your balance to another card within the same group. By using uSwitch.com’s balance transfer tool, you will only be allowed to apply for cards that are available at you.

About uSwitch:
uSwitch.com is a free, impartial online and telephone-based comparison and switching service, helping consumers compare prices on gas, electricity, water, heating cover, home telephone, broadband, digital television, mobile phones, personal finance products and car insurance.

Via EPR Network
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Bankruptcy, Checking & Savings, Credit Repair, Debts, Financial, Financial Services, Financial Solutions, Money, Personal Finance

We Have All Seen The Credit Monitoring Commercials With The Funny Jingles, But Do You Know Who Is Behind Them?

Its 1:30 A.M. and your watching your favorite late night program. All of a sudden there are singing pirates telling you that if you are not careful, you will be serving fish to tourists. Sound familiar? So, who is selling you this information that could protect you from being a fish waiter, working for less than minimum wage? Thats right, the same 3 companies that provides it to potetial creditors and employers. Trans Union, Equifax and Experian. So what are they saying with these commercials? Our interpetation is that you better watch out because if you don’t, we will say anything about you we want, no matter if its true or not! And by the way, if you want us to watch your back and protect you from hearsay, it’s going to cost you $29.95 per month.

It seems as if everywhere you turn they are trying to sell you a credit bureau. And why should you even bother checking your credit Trans Union, Equifax, and Experian are supposed to be good companies that follow the rules and only report true and accurate information. Why should you worry? And why are these companies telling you to worry? Because in fact, the information on 79% of Credit Bureaus is innacurate acording to PIRG (Public Interest Research Group) Seriously innacurate enough to cost you a Job or not to be approved for a loan. So what do you do? First of all, don’t pay them a dime. You are entitled by law to a free credit report!

It is the Credit Bureaus responsability to maintain complete and accurate information in their files. (Section 607b of the FCRA) So why dont they do this? Because they are for profit corporations who depend on the negative information for profits. In todays age of technology they could perform regular audits very easily but they dont, Instead they make the consumers do their job for them by requiring them to perform tedious tasks when errors are discovered. This is the reason Credit Repair has become so neccesary for many americans trying to live the American dream. In fact if it wasnt for the good Credit Repair companies out there many consumers would remain victims of this nations broken credit reporting system.

So next time you see one of those funny commercials dont laugh and sing along, feel insulted and hurt because what they are doing is laughing and making fun of the American consumer, and clearly pointing out how faulted our credit reporting system is.

Via EPR Network
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