Peter Payack Finance

Deciding on the best rewards cards depends on what is the most rewarding to you.  Rewards include cash back options, travel points, travel insurance, donations to sports teams, colleges, and charities.

Here are some of top rewards cards in Ireland:

• MBNA’s new Pigsback.com credit card. With 0% APR on balance transfers for 10 months and 2,000 PiggyPoints after your first card purchase, it’s pretty great. The APR isn’t bad either (14.9 % APR when this went into print). As for your reward? You get 1 PiggyPoint for every 2 Euros you spend on card purchases! It really does fair high on my list of best credit card deals in Ireland.
• SonyCard. For every € 1.5 you charge on the card, you receive one “pulsebeat.” You can get stuff free by using your pulsebeats. Sony offers over 600 products available for purchase with pulsebeats.
• Tesco’s Clubcard Credit Card. This card gets you one point for every €4 you spend. Sometimes it’s double points, but bear in mind each point is worth about only around 4cents when you redeem them. You can spend your points at Tesco stores or petrol stations. You can also use the clubcard vouchers as airmiles
• Sainsbury Credit Card. This card gives you two Nectar points for every €1 you spend in Sainsbury (for the first two years you hold the card). When you use the card elsewhere, you get one Nectar point for every €5 you spend. Each nectar point equals 0.5cents. You can use your vouchers at Sainsburys and Argos. You can also use them at certain restaurants, video stores, cinema tickets, and for airplane tickets.
• Play.com credit cards lets you earn points for spending at play.com and elsewhere. You get two playpoints for each €1 you spend at play.com. If you use your card elsewhere, you receive one playpoint for each €1. Five hundred playpoints equal €5. You can redeem your points at Play.com where you can buy DVDs, music, games, books, computers, electronics, and gadgets.
• Ulster Bank credit cards also offer YourPoints. But you only receive one point for every € 1 you spend. You can use YourPoints to make travel arrangements and you can get shopping vouchers for them.

LONDON, UNITED KINGDOM - Following the release of insolvency figures in Scotland in the first quarter of 2009, financial solutions provider Think Money pointed out that the impact of the LILA (Low Income Low Asset) route into insolvency could shed some light on the probable impact of the DRO (Debt Relief Order) on insolvency figures in England and Wales.

In Scotland, 5,693 individuals became insolvent in the first quarter of 2009. This was an increase of 71% compared with the first quarter of the previous year. Significantly, the number of bankruptcies stood at 3,722 - an increase of 158% on the same time period last year (before the introduction of the LILA).

According to www.scotland.gov.uk, the ’significant increase in bankruptcies is attributed to the introduction on April 1, 2008 of a new route into bankruptcy for people who have low income and low assets’.

It should be stressed that (unlike the LILA) the DRO is a form of insolvency, but will not be counted as a form of bankruptcy.

“Looking to England and Wales,” said a spokesperson for Think Money, “it’s fair to assume the introduction of the DRO will also have a significant impact on insolvency figures. Accountants KPMG have stated that they expect individual insolvencies to top the 150,000 mark this year - a 40% increase on last year’s figures - partly due to the introduction of DROs and partly due to the worsening state of the economy.

“Before the DRO was introduced, many individuals had little opportunity to clear debts which had become unmanageable, as they were unable to afford the fee of around Pounds Sterling 500 which bankruptcy requires.

“Costing just Pounds Sterling 90, the DRO is far more accessible than bankruptcy, and may be suitable for many of those who would already have had themselves declared bankrupt, had they been able to afford the fee. In other words, we may see significant interest in DROs from people whose financial situation has been serious for some time.

“However, the introduction of the DRO is unlikely to be make any difference to the majority of people considering an IVA (Individual Voluntary Arrangement). According to KPMG, the average debt owed by someone entering an IVA in the previous quarter was Pounds Sterling 47,800, putting them well beyond the Pounds Sterling 15,000 limit for DRO eligibility.

“As for the country’s economic problems, we may also see people entering a DRO as a result of the recession, although we would stress that no form of insolvency is an appropriate way to address short-term problems. Someone who has recently lost their job but is hopeful about finding new employment in the near future would be better advised to look into alternative, more temporary, ways of helping them survive a (hopefully) short-lived period of financial difficulty.

“In fact, anyone in a DRO is required to report any change in circumstances to the official receiver - who may decide to terminate the DRO if they believe the individual is now capable of making payments to their creditors.

“This is why Think Money stress the importance of providing a comprehensive range of debt solutions. In our experience, this is an essential part of providing a tailored service that truly caters to the individual needs of each customer.”

Money problems - dealing with debt

Money problems can come in all shapes and sizes, but debt can be one of the hardest to deal with. After all, someone whose bank balance is low might consider themselves to be in financial trouble, but someone who owes more money than they have is clearly worse off financially - they`d probably be happy to wipe out whatever savings they have if they could just wipe out their debt too!

Click here for more information on Money Problems

The number of mortgage approvals in the UK last month fell to just 32,000 in October, new Bank of England figures show.

That figure stands at 1,000 less than in September 2008, and significantly lower than the 115,000 mortgages approved by lenders in June 2007.

The figures may suggest that both house sales and prices have further to fall, according to the BBC. UK house prices have already fallen by between 10% and 15% in the past year. The actual number of sales has fallen by more than half.

A mortgage expert for Think Money commented: “While it’s true that mortgage offers have fallen compared with last year’s levels, mortgages are still very much available.

“Even so, the current situation highlights the need for good mortgage advice. By speaking to someone who knows the market well, would-be homebuyers can improve their chances of finding the best mortgage deal.”

Debt management company Gregory Pennington have warned that the economy remains uncertain, despite a number of signals suggesting a potential recovery, and have advised anyone facing severe financial problems to seek professional debt advice as soon as possible.

The Bank of England Monetary Policy Committee’s announcement on Wednesday that the base rate would fall to 4.5% was intended to calm fears surrounding the money market and increase lenders’ willingness to do business with one another, subsequently increasing liquidity and boosting the loans market.

A number of lenders announced cuts to their mortgage rates following the base rate announcement – which may come as a relief to prospective homeowners or existing homeowners looking to remortgage, following many lenders’ reluctance to respond to the last base rate drop.

Meanwhile, petrol prices recently fell to as little as 103.9 pence per litre, while food price growth slowed by 0.2% in September, according to the British Retail Consortium (BRC) – arousing speculation that overall inflation has hit its peak and will now begin to slow.

However, a spokesperson for Gregory Pennington commented that while there are encouraging signs for the economy, there is no guarantee that further difficulty for the economy can be avoided.

“The first thing to bear in mind is that while the base rate cut is intended to help the economy, it was brought in as an emergency measure,” she said. “The threat of a severe economic downturn is still looming and there are no guarantees it can be avoided.

“The fall in oil and food prices are very encouraging, but both are heavily affected by external factors, largely outside our Government’s control.”

The debt management company spokesperson was keen to emphasise the continued need to take care over finances and manage debts effectively in the coming months. “There is still the possibility that things could get tighter in the near future, so it pays to tackle any financial issues now, rather than waiting to see what happens next.

“People who are struggling with debt are especially at risk, because their finances are already stretched – and any further rises in costs of living could make those debts unmanageable.

“As always, we advise anyone struggling with debt to seek expert debt help as soon as possible. Leaving it too late could allow your debts to grow, which is particularly dangerous if costs of living do continue to rise.

“There are a number of debt solutions to help with various financial situations. A debt management plan is a flexible means of getting out of debt in which your repayments are based on how much you can afford, and in some cases interest and other charges can be frozen.

“Debt consolidation involves grouping your debts into one convenient monthly payment, therefore simplifying your finances, and your debt can also be spread out over a longer period of time, meaning monthly payments are smaller – although this can mean you pay more interest in the long run.

“For more serious debts of over £15,000, an IVA (Individual Voluntary Arrangement) might be more appropriate. These work by agreeing with your creditors to make payments based on what you can afford for a period of five years, after which the remaining debt is considered settled.”

Guest Article by Melanie Taylor @ ThinkMoney.com

In the midst of the credit crunch, remortgaging can be a stressful experience for homeowners. The best interest rates are often only available if you are willing to pay a mortgage arrangement fee – and those on variable-rate mortgages can soon find their mortgage payments getting more expensive than they may have expected.

Lenders are being careful with their lending these days, but they are still being competitive. With that in mind, it makes sense to look around and ensure you are getting the very best deal on your remortgage.

Plan ahead

It’s essential you don’t leave your remortgage too late – any less than a month’s planning could leave you pressed for time. Ideally you should leave at least 2-3 months to go over your options, which gives you enough time to look at what’s available without rushing.

Find out all the costs involved

As with a new mortgage, there are many costs associated with remortgaging – so make sure you know exactly how much you are going to need.

Consider the mortgage arrangement fees associated with each deal. Many variable-rate mortgages come without an arrangement fee, but most fixed-rate mortgages do carry them. If you‘re willing to pay an arrangement fee, a fixed rate is probably worthwhile, since it gives peace of mind over how much you will pay each month, and can usually be added to your mortgage payments. However, if interest rates go down, you may end up paying more than you would with a variable-rate mortgageYou will also need to consider any ‘additional’ services offered with your mortgage, particularly PPI (Payment Protection Insurance). If you can afford to pay the extra each month, PPI is worth having – if something occurs that prevents you repaying your mortgage, the insurance should cover your costs, often for over a year. If it’s going to be a burden on your finances, though, it may be worth waiting until you are in a better position financially.

Make sure you’re safe if your payments go up

This doesn’t apply to fixed-rate mortgages, since the payments are the same each month – but there is a risk with variable-rate mortgages that if the interest rate rises, so will your mortgage payments. Make sure you have room in your finances for any unexpected rises, and expect your disposable income to take a hit if they do.

Some lenders offer a ‘cap’ on their variable rates, which could help you plan for the worst-case scenario (i.e. rates are as high as they can go).

Check for early repayment charges

If you are hoping to pay off your mortgage early, some lenders will ask for an ‘early repayment charge’ (also known as a ‘redemption penalty’. The idea behind this is that it makes up for what the lender would have gained in interest, had you continued with the mortgage as normal. However, these most commonly apply during fixed rate or discounted rate periods and many lenders offer deals which don’t include such charges.

Avoid mortgages with annual interest

Some mortgages work out their interest on an annual basis, meaning the amount of interest you pay every month is based on the money you owe at the start of each year.

Mortgages with daily interest charge you interest depending on how much you owe at any given time, so as you pay off more of the mortgage, the interest decreases with it. This might not make a huge difference at the time, but over the course of your whole mortgage, you will end up paying a lot less in interest – and the mortgage can technically be paid off years earlier.

A study by Fool.co.uk has found building up serious debt is the second “biggest financial blunder” made by British consumers.

The survey found one in 14 people (seven per cent of respondents) said their most serious financial worry has come from borrowing more money than they can afford to repay.

Credit card debt was number three on the list, with one in every 17 people (six per cent) saying plastic spending was their biggest concern.

Head of personal finance at the information website, David Kuo, said debt help is easily available for people worried about their money.

“The important thing to remember is that making the right choices comes from knowledge and knowledge comes from knowing why you and others made wrong decisions,” he added.

Deciding on the wrong mortgage has damaged the wealth of two per cent of those questioned, while bad investments topped the list of financial mistakes.

Also this week, Fool.co.uk has said Alistair Darling`s predicted stamp duty holiday would lead to bad debt.

Full Article

Not having insurance could leave those consumers on low incomes at greater financial risk, it has been suggested. The news comes as research carried out by the Association of British Insurers (ABI) reveals that just over a third of people (35 per cent) living in low-income homes - those households which earn less than 10,000 pounds per year - do not have any form of insurance.

And with the firm suggesting that such consumers are more at risk from crime, flooding and fire than their higher-earning peers, not taking out cover may see them struggle more to meet demands on their finances such as utility bills and personal loan repayments. In addition, the ABI revealed that 44 per cent of the poorest households have purchased home contents insurance, in comparison to the 82 per cent of Britons on median incomes (earning between 15,000 pounds and 30,000 pounds) who have the product. Overall, a third of people on low incomes have motor cover, while only a quarter have taken out life insurance.

Research from the association also showed that those consumers with an annual income of less than 5,000 pounds are 71 per cent more likely to have their homes burgled at least once, in comparison to households earning at least 30,000 pounds. Meanwhile, arson rates are some 30 times higher among people living in the most deprived communities. It was also suggested that consumers making the least amount of money per year are more susceptible to flooding. Speaking at a seminar on financial inclusion and insurance, Stephen Haddrill, director general of the ABI, said: “Insurance provides valuable protection to people on all income levels. The poor are least able to deal with financial loss and depend most on insurance. We need to address the issue of low take-up in low-income groups.

A lack of spare cash is the biggest factor holding back the purchase of insurance by lower income households.” The association also asserted that when those on low incomes and who are without insurance have items either damaged or stolen, they have to meet the costs of replacing such goods themselves, which in turn may put pressure on their day-to-day money management. Consequently, a third of such consumers are shown to borrow, whether this be through a secured loan, credit card or other means, in a bid to meet such costs and in turn are “increasing their indebtedness”. As a result, for those consumers looking to replace damaged goods or to get repairs on their property carried out, applying for a personal loan could be an effective way of meeting such costs. In addition, taking out a loan could also help consumers organize their finances and free up disposable income, as they could be able to pay off various debts quickly - potentially leaving them more money to buy a sufficient insurance policy.

Earlier this year, Chris Tap, associate director of Credit Action, stated that by taking the time each month to review their finances, consumers will be able to identify where their money goes and so could make payments on personal loans and other types of credit with greater efficiency.

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Lawrence Yun, NAR chief economist, said first-time home buyers are
critical to the health of the housing market. “About four in 10 homes are
purchased by first-time buyers, which frees existing owners to trade up,”
Yun said. “With many potential first-time home buyers on the sidelines, a
first-time buyer tax credit would have a significant positive impact on
both housing and the economy. Combined with permanent increases to mortgage
loan limits and enhancing the FHA loan program, the housing stimulus
package working its way through Congress would go a long way toward helping
consumers and boosting the overall economy.”

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