Credit card companies are using "shameful practices" to maximise profits from customers on interest-free balance transfer deals, the managing director of a bank has claimed. Brian Cole, of Capital One in the UK, the bank that first introduced zero-interest balance transfers to Britain in the 90s, says: "There's a lot of practice in the [banking] marketplace that is shameful, and credit card companies are not immune. [Balance transfer] customers think they're going to progress in getting out of debt, and get some relief from interest payments. But make a mistake and you will end up making money for your credit card company." Cole stopped Capital One making interest-free balance transfers available to mainstream customers in 2008. He says: "When we first introduced the interest-free balance transfer it was a very different product to now. The interest-free period lasted six months and it was a loyalty based play: we hoped the customer would stay at the end of the interest-free period, but if they didn't, we didn't lose lots of cash." Borrowers loved the idea of interest-free credit, and soon banks were vying for business by extending the interest-free period. The longer it became, the more difficult it was to make money, says Cole: "The pressure for issuers to find that revenue intensified, and on the back of that came sharp practices." Andrew Hagger of product comparison website MoneyNet says he was surprised that credit card companies not only continued offering zero-interest balance transfers after the credit crunch, but extended the length of the deals. In September 2007 there were 86 deals on offer with an average interest-free term of 9.14 months. Now there are 74, but the average term has increased to 12.64 months and Barclaycard and the Halifax are both offering 22-month deals. "It's surprising to see the balance transfer market still apparently thriving in this post-crunch era – however, while the number of deals remains high, the volume of people being declined is likely to have increased markedly as borrowers focus on consumers with a squeaky clean credit history. Offering long-term 0% balance transfer deals is a great way for card providers to get free advertising via the best buy tables," says Hagger. So how do banks make money out of what seems to be such a bargain for those who qualify? Banks lose money during the interest-free period, as they will be paying interest on the money lent to you. But they can recoup some of that with the balance transfer fee. Cole says: "If you're transferring £10,000 with a 2% balance transfer fee, that's costing you £200. That's quite a sizeable amount, but it still doesn't feel much to the customer because it doesn't come directly out of their pocket – it's added on to the credit balance.".....It's very simple but few seem to learn - don't use a bank. You want a better life - don't use banks. This is your choice. Credit Card use fuels the fractional reserve banking system which is the root of all the debt issues.
Access Investments-Building Awareness - European Union-ROMANIA
Sunday, March 25, 2012
It's very simple but few seem to learn - don't use a bank.
Credit card companies are using "shameful practices" to maximise profits from customers on interest-free balance transfer deals, the managing director of a bank has claimed. Brian Cole, of Capital One in the UK, the bank that first introduced zero-interest balance transfers to Britain in the 90s, says: "There's a lot of practice in the [banking] marketplace that is shameful, and credit card companies are not immune. [Balance transfer] customers think they're going to progress in getting out of debt, and get some relief from interest payments. But make a mistake and you will end up making money for your credit card company." Cole stopped Capital One making interest-free balance transfers available to mainstream customers in 2008. He says: "When we first introduced the interest-free balance transfer it was a very different product to now. The interest-free period lasted six months and it was a loyalty based play: we hoped the customer would stay at the end of the interest-free period, but if they didn't, we didn't lose lots of cash." Borrowers loved the idea of interest-free credit, and soon banks were vying for business by extending the interest-free period. The longer it became, the more difficult it was to make money, says Cole: "The pressure for issuers to find that revenue intensified, and on the back of that came sharp practices." Andrew Hagger of product comparison website MoneyNet says he was surprised that credit card companies not only continued offering zero-interest balance transfers after the credit crunch, but extended the length of the deals. In September 2007 there were 86 deals on offer with an average interest-free term of 9.14 months. Now there are 74, but the average term has increased to 12.64 months and Barclaycard and the Halifax are both offering 22-month deals. "It's surprising to see the balance transfer market still apparently thriving in this post-crunch era – however, while the number of deals remains high, the volume of people being declined is likely to have increased markedly as borrowers focus on consumers with a squeaky clean credit history. Offering long-term 0% balance transfer deals is a great way for card providers to get free advertising via the best buy tables," says Hagger. So how do banks make money out of what seems to be such a bargain for those who qualify? Banks lose money during the interest-free period, as they will be paying interest on the money lent to you. But they can recoup some of that with the balance transfer fee. Cole says: "If you're transferring £10,000 with a 2% balance transfer fee, that's costing you £200. That's quite a sizeable amount, but it still doesn't feel much to the customer because it doesn't come directly out of their pocket – it's added on to the credit balance.".....It's very simple but few seem to learn - don't use a bank. You want a better life - don't use banks. This is your choice. Credit Card use fuels the fractional reserve banking system which is the root of all the debt issues.
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Payment holidays for companies and employees forced by Thatchers government was the start of the failure of Defined benefit pensions. Then Browns taxation to dividends carried on the downward spiral. Companies then using early retirement to get rid of over 50's well paid staff without reduction in benefit. The global downturn and the failure of banks have not helped matters. Low interest rates and people living longer have just made matters worse with massive shortfalls. There are regularly retired pensioners now getting paid out more years than they worked. Companies that offered these schemes have been taken over and the new owner does not want to support it or cannot do it as well as looking after their shareholders. My old employer scheme is writing to me at the moment trying to get me to accept a derisory offer to remove me from my pension. Funny how the worth of my pension when I was working for them was double the offer they offered me. Now I know a transfer value can be lower but you are the ones trying to sell this? BTW I am not signing even if they double it. You are a globally succesful insurance company(not Prudential) and you can jolly well afford this.
FMI va cere Germaniei, în viitorul raport al instituţiei referitor la această ţară, să majoreze cheltuielile publice pentru a proteja creşterea economică, conform AFP, citată de Antena 3.
Potrivit ediţiei de luni a săptămânalului Der Spiegel, Fondul va solicita autorităţilor de la Berlin să cheltuiască mai mult pentru dezvoltarea infrastructurii şi stimularea creşterii economice.
Germania trebuie totodată să încurajeze consumul privat şi investiţiile companiilor prin reforme fiscale.
Cu o populaţie îmbătrânită, există riscul ca potenţialul de creştere a economiei Germaniei să scadă sub 1% în anii următori, avertizează FMI.
Şomajul din Germania se află la cel mai redus nivel de la reunificarea ţării, procesul de îmbătrânire a populaţiei se accentuează, iar companiile se confruntă cu un deficit de forţă de muncă specializată. Din acest motiv, responsabilii economici au cerut guvernului să încurajeze imigraţia pentru rezolvarea problemei.
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