press release

• Banks and lenders continue to rake in millions by tempting customers into costly decisions
• Consumers urged to think twice before opting for quick financial fixes

DEPRIVE banks of a Christmas bonus - resist the temptations that promise benefits but actually cost a fortune, advises online data comparison analyst Moneynet.co.uk.

“It’s quite easy to keep your bank happy - simply act as they encourage you to - but you'll be out of pocket,” says Moneynet.co.uk chief executive Richard Brown.

And with Britain’s personal debt increasing by a staggering £1million every four minutes*, it’s vital that consumers can tell the difference between the carrot and the stick.

“Don't play into their hands - these are five financial fiascos that you should definitely avoid for the health of your wealth,” advises Brown.

• Unauthorised overdrafts - Many banks have now removed the buffer zone which prevented customers from being hit with a fee if they accidentally slipped into the red by less than £10, so sailing close to wind could end up driving finances off course. “It’s so easy to avoid this trap,” advises Brown. “The vast majority of people will find their bank quite happy to set up a temporary overdraft facility – asking costs nothing and could bring big savings.”
• Credit card cheques – With a handling charge of around 2.5% on top of the interest that will accrue on the amount spent, these are a license to print money for the card provider.
• Credit card cash advances - Withdrawing cash on a credit card is hugely expensive. Hefty handling costs of as much as 2.5% of the amount withdrawn and interest payable on the advance will turn this quick fix a long-term disaster.
• Store cards - At this time of year, when Christmas shopping and the January sales take their toll, store cards are especially tempting; the typical ten per cent savings made on an initial purchase will be quickly wiped out if debts are not cleared.
• Loan payment protection insurance - Attractive loan rates always come at a price and one way lenders are able to offer such cheap borrowing is by inflating the price of their payment protection cover which they do their best to sell along with the loan. Whilst worthwhile for many borrowers, payment protection is invariably substantially more expensive when using high street lenders. “Shopping around for cover could save literally thousands over the term of the loan so don’t be pushed into taking an expensive policy through your lender - it isn’t a condition of getting the loan any way,” warns Brown.