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40% apr FFS !! Martin Lewis' warning for anyone currently overdrawn


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HOLA441
22 hours ago, Horridbloke said:

So 'alt-coins' both have no effect on bitcoin and make it worth more? Okay then...

Originally I thought as you did - "surely anyone can invent a cryptocurrency - so what's special about Bitcoin?"

But think of it the other way - if cryptocurrency is a flash in the pan, none of them are worth anything.  But if it's not, why would anyone use alt-coins when they can use Bitcoin?

Basically what happened was:

- Bitcoin was invented, hardly anyone noticed

- Suddenly the whole world noticed and the few early adopters became rich overnight

- Other people thought "I'd like to become rich overnight" so they invented/invested in alt-coins.  But the ship has sailed.  Cryptocurrency has now passed into the general public knowledge, so it won't ever be able to make anyone rich overnight again.

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HOLA442
10 minutes ago, scottbeard said:

Originally I thought as you did - "surely anyone can invent a cryptocurrency - so what's special about Bitcoin?"

But think of it the other way - if cryptocurrency is a flash in the pan, none of them are worth anything.  But if it's not, why would anyone use alt-coins when they can use Bitcoin?

Basically what happened was:

- Bitcoin was invented, hardly anyone noticed

- Suddenly the whole world noticed and the few early adopters became rich overnight

- Other people thought "I'd like to become rich overnight" so they invented/invested in alt-coins.  But the ship has sailed.  Cryptocurrency has now passed into the general public knowledge, so it won't ever be able to make anyone rich overnight again.

pretty much this, once its on the radar everyone knows same as everything else in life. 

sad thing is i knew about in 2012 couple of grand invested then would have turned to 10m  ? shame

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HOLA443
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HOLA444
On 16/01/2020 at 09:00, PaulParanoia said:

https://www.moneyadviceservice.org.uk/blog/what-the-changes-to-overdraft-fees-mean-for-you

"Interest on all overdrafts will be charged at a single annual interest rate (APR).

No daily or monthly fees for using your overdraft.

The same interest rate for arranged and unarranged overdrafts."

So it looks like the banks are ramping up the interest rate to make up for the money lost on daily and monthly fees.

Yes, I think so......the higher interest rates will push some people into an unarranged overdraft like the old fees did, they have ways of returning or refusing payments over a certain limit so should think they can manage individual permitted overdrafts.

.... will we see more buy now pay latter interest free deals from suppliers and stores?....borrowing from the sellers of goods rather than the banks?;) 

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HOLA445
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HOLA446

How does the paying a credit card balance off in 3 years work?  Does that mean no more transferring a balance to a 0% new card, after the 0% on current card ends? 

 

Say current card 0% interest for 2 years, that 2 year period ends, can’t transfer it to another 0% card for 2 years on an ongoing basis ?  Or is the balance considered paid when you close the 1st account down and transfer to the new one?

 

I paid for an MSc on 0% credit cards.  Cheaper than getting a student loan as you now pay interest on student loans from the day you take out the loan.

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HOLA447
39 minutes ago, Mancunian284 said:

How does the paying a credit card balance off in 3 years work?  Does that mean no more transferring a balance to a 0% new card, after the 0% on current card ends? 

 

Say current card 0% interest for 2 years, that 2 year period ends, can’t transfer it to another 0% card for 2 years on an ongoing basis ?  Or is the balance considered paid when you close the 1st account down and transfer to the new one?

 

I paid for an MSc on 0% credit cards.  Cheaper than getting a student loan as you now pay interest on student loans from the day you take out the loan.

You have a little spreadsheet and a number of credit cards - after a while you don’t even have to search offers you get 0% deals sent to you - you pay off or txfr a 0% deal and after about 3 months they want you back hence the offers 

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HOLA448

I paid it off 2 years ago but I’m just mentioning that 0% cards were actually a better option than student finance, as I paid no interest or fees.  Would be a shame to no longer have this option.

 

I currently have a credit card for online shopping, paying for holidays etc but pay the balance in full each month.

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HOLA449
3 hours ago, GregBowman said:

You have a little spreadsheet and a number of credit cards - after a while you don’t even have to search offers you get 0% deals sent to you - you pay off or txfr a 0% deal and after about 3 months they want you back hence the offers 

This! And your APR is the transfer fee divided by the 0% transfer length. No such thing as 0% really, true 0% , with 0% transfer fee are very, very rare. Barclaycard and MBNA are both very good for this, repeat offers, they even usually start throwing you offers 50% of the way of paying the previous transfer if you have a few £k+ of credit limit left. 

But MBNA have gotten expensive since being bought by ?? Lloyds?  , their 0% 12 month offer all now have a 5% transfer fee, so you are borrowing @ 5% APR really.  Still a quite cheap rate and comparable to a good loan. Certainly way, way cheaper now than using a 40% APR overdraft constantly and they will give you £10k limit + no issues if you have an ok credit rating.

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HOLA4410
54 minutes ago, markyh said:

This! And your APR is the transfer fee divided by the 0% transfer length. No such thing as 0% really, true 0% , with 0% transfer fee are very, very rare. Barclaycard and MBNA are both very good for this, repeat offers, they even usually start throwing you offers 50% of the way of paying the previous transfer if you have a few £k+ of credit limit left. 

But MBNA have gotten expensive since being bought by ?? Lloyds?  , their 0% 12 month offer all now have a 5% transfer fee, so you are borrowing @ 5% APR really.  Still a quite cheap rate and comparable to a good loan. Certainly way, way cheaper now than using a 40% APR overdraft constantly and they will give you £10k limit + no issues if you have an ok credit rating.

Plenty 0% transfer fee cards around.

I guess the most important aspect is having a decent credit rating to obtain another card while already maxed out on a card already.

 

https://www.fool.co.uk/mywallethero/best-credit-cards/0-balance-transfer-no-fee/#jump_here

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HOLA4411
2 hours ago, markyh said:

This! And your APR is the transfer fee divided by the 0% transfer length. No such thing as 0% really, true 0% , with 0% transfer fee are very, very rare. Barclaycard and MBNA are both very good for this, repeat offers, they even usually start throwing you offers 50% of the way of paying the previous transfer if you have a few £k+ of credit limit left. 

But MBNA have gotten expensive since being bought by ?? Lloyds?  , their 0% 12 month offer all now have a 5% transfer fee, so you are borrowing @ 5% APR really.  Still a quite cheap rate and comparable to a good loan. Certainly way, way cheaper now than using a 40% APR overdraft constantly and they will give you £10k limit + no issues if you have an ok credit rating.

Forget to say that but lots around .9 to 1.2 over 3 years you are right about MBNA - Barclaycard spraying it around at the moment

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HOLA4412
9 hours ago, Mancunian284 said:

How does the paying a credit card balance off in 3 years work?  Does that mean no more transferring a balance to a 0% new card, after the 0% on current card ends? 

Say current card 0% interest for 2 years, that 2 year period ends, can’t transfer it to another 0% card for 2 years on an ongoing basis ?  Or is the balance considered paid when you close the 1st account down and transfer to the new one?

I'd imagine if you get as far as being asked by your bank to repay then you would get some kind of 'marker' on your account, possibly not a 'bad debt marker' but something similar. At that point you would struggle to get another interest free card on the same terms to follow on from that one because of the marker on your account. 

None of the current credit rating markers quite fit the 'persistent debtor' model, out of the existing options I think your account would be marker AR, which means you've made an Arrangement to Repay your debt. Usually that's only for people in a DRO type situation.

Also interesting that under the new rules you will be asked to repay after 3 years, but they have to not offer you a credit limit increase after you've been a persistent debtor for 1 year, at which point that may also require some kind of marker so other lenders know you are 'capped' due to persistent debt. 

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HOLA4413
7 hours ago, longgone said:

Plenty 0% transfer fee cards around.

I guess the most important aspect is having a decent credit rating to obtain another card while already maxed out on a card already.

 

https://www.fool.co.uk/mywallethero/best-credit-cards/0-balance-transfer-no-fee/#jump_here

I have found 0% fee cards nearly always offer a low limit , few £k max and shortish period. £2k and 9 months is  not much good if you want to shift £6k.

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HOLA4414
2 hours ago, regprentice said:

I'd imagine if you get as far as being asked by your bank to repay then you would get some kind of 'marker' on your account, possibly not a 'bad debt marker' but something similar. At that point you would struggle to get another interest free card on the same terms to follow on from that one because of the marker on your account. 

None of the current credit rating markers quite fit the 'persistent debtor' model, out of the existing options I think your account would be marker AR, which means you've made an Arrangement to Repay your debt. Usually that's only for people in a DRO type situation.

Also interesting that under the new rules you will be asked to repay after 3 years, but they have to not offer you a credit limit increase after you've been a persistent debtor for 1 year, at which point that may also require some kind of marker so other lenders know you are 'capped' due to persistent debt. 

To understand the game you need to learn how to bend the rules. Seeing debt at a family level with open policy between partners makes it very easy to avoid these rules. The trick is to have one partner with the majority of the debt on their cards that is 0% over 12-30 months. Their credit rating tanks, But the other partner is mostly debt free and their credit rating rises to excellent as they have £30k+ of unused credit card limit. 
 

if and when Partner A reaches the point balances unpaid need to be moved to another 0% deal but they are not credit worthy anymore so no offers coming through, the family transfers the debts to now credit worthy partner B. 
 

And yes, you can transfer a credit card balance from Anyone to Anyone, it is not restricted to just “your debt”, 

Wife and I have been playing this game for 15 years now on low fee 0% rates. 

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HOLA4415
On 14/01/2020 at 20:05, regprentice said:

I think when the fca said 'all overdrafts should be charged at the same rate' they quietly hoped the banks might exercise some self control and not jack all their overdraft rates to 40%.

As I said on the other thread the increase in overdraft rates, coupled with forcing persistent debtors (3 mn of them) to repay their credit cards within 3 years will hit a cohort of debtors very hard. I've read about mandatory repayment plans forcing people to pay out more than half their take home pay to clear the debt.  

Indeed.  Some more on that here.

FT Alphaville: In a Germanic shift, the FCA wants to demonise overdrafts and force savings upon everyone (Registration but not subscription required.)

From the comments:

Quote

npf1

3 HOURS AGO

If 2m people need to curtail discretionary spending for a few months or more survive this, that's a lot of money that won't be spent. 

Time to buy UK banks?

 

Sails

2 HOURS AGO

reply In reply to npf1

And time to sell businesses that rely on discretionary spending, like restaurants, takeaways & pubs?

 

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HOLA4416
  • 6 months later...
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HOLA4417

These 40% OD rates are  being reinstated after dropping to 20% in Gov forced covid  relief

Then the other rug folks clung to is pulled ..

Quote

Credit card market ‘hits record low’ as interest-free deals vanish

The number of balance transfer deals has fallen by a third since January – to fewer than during the credit crunch

Credit card borrowers looking to consolidate their debts or take advantage of interest-free deals have seen their choice severely diminished in recent months....

https://www.telegraph.co.uk/personal-banking/credit-cards/credit-card-market-hits-record-low-interest-free-deals-vanish/

 

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HOLA4418

 

33 minutes ago, Saving For a Space Ship said:

These 40% OD rates are  being reinstated after dropping to 20% in Gov forced covid  relief

Then the other rug folks clung to is pulled ..

 

my 0% interest offer does not end to first week October  just wondering whether i should apply for what seems the last of the 0% balance fee free cards now with  natwest or wait.  no point paying it off if it costs nothing. 

they may decide all cards have to pay a fee. 

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HOLA4419
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HOLA4420
On 25/08/2020 at 12:02, longgone said:

my 0% interest offer does not end to first week October  just wondering whether i should apply for what seems the last of the 0% balance fee free cards now with  natwest or wait.  no point paying it off if it costs nothing. 

they may decide all cards have to pay a fee.

Unlikely.

This is because the FCA decreed that people with unauthorised overdrafts were being charged too much, and in future they should be charged the same as people with agreed overdrafts. They thought the banks would lower rates for the former, instead they raised them for the latter.

They are not going to make the same mistake again with credit cards.

There are plenty of low interest balance transfer offers, and plenty of zero interest after a reasonable transfer fee (which comes to the same thing).

It might be more wariness of reducing the loss from some of these deals if interest rates rise (not now, but if we do get recover and inflation, and interest rate risk is likely).
 

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