Category

News

Credit Card ‘Cash Advance’ Fees

By | News

Credit Card ‘Cash Advance’ Fees

The cash advance charge on most credit cards can be an unwelcome, and often unexpected, surprise that can throw your entire budget out of the window, and lead to struggling to repay your credit card debts.

If your lender classifies a transaction as a cash advance, it can trigger a higher rate of interest for that transaction – often over 25%! – even if you have a 0% interest deal, cash advance transactions are not covered by this deal. You are also charged this interest from the day you take out the cash, unlike other transactions which usually have a period of one or two months before you pay any interest.

So, What Counts as a ‘Cash Advance’?

  • Cash Withdrawals
    The most obvious, and well known, cash advance is when you take out cash from the ATM. If you need cash, always try to use your credit as the last option.
  • Gambling
    A lesser-known cash advance is when it comes to gambling. If you use your credit card in a casino it will count as a cash advance, this is understandable, and most people will steer clear of this, however if you gamble online and use your credit card to place your deposit, then this also counts as a cash advance. This is where people can fall down, as many people don’t associate ‘online’ with ‘cash’. Other things to consider is that if you play the lottery, this counts as gambling and incurs a cash advance fee, but also things such as fantasy football. So be careful.
  • Foreign Currency
    This one is a little more obvious, but buying a foreign currency also incurs a charge. This can be avoided with a travel card – ask your provider. This also includes the purchase of cryptocurrency.
  • Gift Card
    If you think about it, this one kind of makes sense, but many lenders consider gift cards as ‘cash advance’ so can fall foul of the charge. Not all lenders consider a gif card as a cash advance, so it’s hard to know which you will be charged for, if at all possible, pay for gift cards with cash or a debit card.

Credit Score

Not only will using a credit card cash advance cost you more money, through interest and charges, but it could also have a significant negative impact on your credit rating, which will affect your chances of taking out further credit. Many credit report companies see cash advances on credit as a sign of financial difficulty, which could have an effect on their decision to approve you for further credit.

Credit Card Debt

If you are struggling to repay your credit card debt, contact our friendly advisers today for no-obligation help and advice.

Loading
Love Island Debt

‘Instagram Lifestyle’ Landing Brits in Debt

By | Financial Help, News

‘Instagram Lifestyle’ Landing Brits in Debt

A recent report has suggested that many Brits are getting themselves into debt to live what is called an ‘Instagram lifestyle’. They are overspending in order to look good on social media.

The Love Island Effect

The rise in popularity of reality TV show, Love Island, is being blamed, with more than 10 percent of people under 40 saying that they ‘spend beyond their means’ to ‘look better on social media’. Fashion, holidays, weddings and designer pets… appear on the reasons why people have overspent on their bank accounts, credit cards and even taken out loans!

If you do want this lifestyle, it cannot be prolonged unless you can genuinely afford it, and you can only afford it once your current finances are in order. Getting into debt is NOT a glamorous way to live, and in this instance you cannot ‘fake it until you make it’.

Not always as good as it seems

The glamorous lifestyle is not always what it’s cracked up to be. Earlier this year, former Love Island contestant, Mike Thalassitis, was found hanging after a ‘cocaine and booze’ binge. It is believed that he had a large amount debt building up in order to maintain his new-found celebrity lifestyle. Whilst there are many reasons people may commit suicide, we know that debt is high up on this list, and although it may have been the direct cause of Thalassitis’ death, it couldn’t have helped.

If you are struggling with mental health problems, the following organisations provide support. Please give them a call.

CALM thecalmzone.net 0800 585 858
Heads Together headstogether.org.uk
Mind mind.org.uk 0300 123 3393
Papyrus papyrus-uk.org 0800 068 41 41
Samaritans samaritans.org 116 123

FIFA Ultimate Team

Children Emptied Parents’ Bank Account on FIFA

By | News

Children Emptied Parents’ Bank Account on FIFA

Four children cleared the family bank account, after spending almost £550 in three weeks buying ‘player packs’ on the FIFA video game on the Nintendo Switch.

The father of the children, Thomas Carter, had initially bought a pack for the popular Ultimate Team on FIFA – a game where you buy players from packs, but you don’t know who you are going to get until you have opened them.

Mr. Carter admits to not taking full precautions to limit access to his Nintendo account: Not using a PIN, and having it connected to an old email address. “I just never thought they would do it, “ he said.

“You pay £40 for the game, which is a lot of money in itself, but then the only way to get a great team is essentially by gambling,” he said, referring to online play.

“They spent £550 and they still never got their favourite player, Lionel Messi.”

He only realised what had happened when his card was declined elsewhere due to insufficient funds in their account.

“quite ethical and fun”

In June, Kerry Hopkins, the vice president of EA games, told British MPs that so called ‘loot boxes’ were “quite ethical and fun”, comparing them with Kinder Eggs, Hatchimals and LOL Surprise.

“We do think the way that we have implemented these kinds of mechanics – and Fifa of course is our big one, our Fifa Ultimate Team and our packs – is actually quite ethical and quite fun, quite enjoyable to people,” she said.

Prof Andrew Przybylski, director of research at the Oxford Internet Institute, said more data was needed in order to assess the impact of loot box-style purchases.

“Loot boxes and in-app purchases present parents with a new frontier of challenges,” he told the BBC.

“Though loot boxes look like gambling, we won’t know what their effects are until these companies start sharing their data with independent scientists.

“There isn’t good evidence it is gambling, but the very fact we don’t have hard data should be a concern.”

How to activate spending controls

  • Xbox One: select the Xbox symbol button on the controller.
    Go to the Systems menu, then follow the pathway settings/account/sign-in, security and passkey.
    Select “change my sign-in”, scroll right to “customise” then “ask for my passkey to make purchases”.
  • Nintendo Switch: log-in using the parental account, click “family group” and select each family member’s log-in that you wish to restrict.
    Click “restrict spending in Nintendo e-shop” to disable purchasing and hit save.
  • iPhone or iPad: activate Screen Time on the device.
    You will need to set up a separate parent passcode.
    Then go to Content and Privacy Restrictions, activate “content and privacy”, go to iTunes and App Store Purchases and set to “don’t allow”.
  • PS4: you must set up a separate account for your child.
    The monthly spending limit is automatically set at zero.
    Sony says it will not refund purchases made from adult accounts.

Conclusions

  • Pay attention to your bank account. This could have been stopped before the three weeks.
  • Set up the parental controls for your consoles. More and more games are included in-game purchases, and it’s very simple to buy them. This goes for your phone, tablet and computer too. Once a card is connected to an account, it’s very easy to spend without realising.
  • Ensure that your contact details are up to date. You are emailed after each purchase, so you are aware of what you are spending.
  • Talk to your children. This can be a great time to talk to your children about the value of money, and being careful online.
Credit Card Debt

Credit Card Debt Soaring

By | Financial Help, News

Credit Card Debt Soaring

Following a decade-long borrowing spree, Brits owe a staggering £72.9 BILLION on credit cards according to new figures from the Bank of England. As well as this staggeringly-high credit card bill, overall consumer debt has reached an all-time high of £217.3 billion!

Why are the debts so high?

This decade-long surge in borrowing resulted from ultra-low interest rates which were introduced after the financial crisis, intended to get people spending and kick-starting the economy, it made it much easier for people to borrow large amounts of money, without being too much of a burden to repay.

The growth in this debt explosion has slowed in the past three years, hopefully showing a sign that people are starting to deal with their debts, rather than continuing to spend. Although, it’s also possible the reduction is due to banks cracking down on excessive credit card lending due to fears that people would begin struggling to repay their debts.

Struggling With Credit Card Debt?

People’s situations change. Despite the common belief that people are simply over spending, the changing of someone’s situation is by far the most common cause of debt struggles. No one applies for a £5,000 credit card thinking they won’t be able to repay it, but redundancy, poor health, divorce, and hundreds of other every-day occurrences, can severely change our situations.
As you can see from the figures above, a LOT of people are in debt, and a LOT of these people are struggling to repay.
Don’t be one of them any longer, talk to our friendly advisers today and see how we can help. There is no cost for our advice, and there is absolutely no obligation to use any debt solution we may suggest to you.

Loading
breathing-space

Debt Breathing Room For 2021

By | Financial Help, News

Debt Breathing Room For 2021

As we discussed earlier, the government wanted to bring in ‘breathing space’ of 60 days for those struggling to repay their debts. It has been announced today that those in serious debt are to be given 60 days to get advice and sort out their finances.

Plans for a six-week ‘breathing space’ period were originally announced in October 2017, and in last year’s budget Chancellor Philip Hammond unveiled plans to extend this to two months.

How Does This ‘Breathing Space’ Work?

If you are struggling with ‘serious’ debts – which in this case is defined as falling seriously behind on payments or having utilities disconnected within the past year – you will be given two months (60 days) without fees, charges, interest or bailiff action, in which you can try to get back on top of your finances before your debts spiral out of control.

During this time you must engage with professional debt advisers, such as the team here at Debt Assist, so that you can find a long-term solution to your debts.

If you are receiving NHS treatment for mental health issues, you will not need to seek professional debt advice during these 60 days.

Life Saving Scheme

Helen Undy, chief executive of the Money and Mental Health Policy Institute, said: “This scheme could genuinely save lives. Everyone experiencing a mental health crisis should have the opportunity to recover free from escalating debt fees, charges and the threat of bailiffs arriving at their door.

“We are delighted that the Government acted on our call to protect people from being hassled about debts while they’re receiving crisis care, and we look forward to working with ministers to put these plans in place over the coming year.”

Utility Bills

You Could Be Owed £886!

By | Financial Help, News

You Could Be Owed £886!

In a time when people are already struggling to pay their bills, it has been revealed that consumers have been overcharged a shocking £24bn on their utility bills according to new research from Citizens Advice. This equates to £886 per household.

Citizens Advice claim that ‘mistakes, errors in judgement and poor forecasts’ have led the regulators to put wrong values into their financial models. This, in turn, has led to your utility suppliers able to overcharge, whilst staying within the regulated amounts. And worse still, the charity reckons industry regulators’ – Ofcom for telecoms, Ofgem for energy, and Ofwat for water – have made these mistakes going back up to 15 years.

Citizens Advice chief executive Gillian Guy said: “Regulator error has meant customers have been charged too much by energy, broadband and phone networks for far too long.
“At a time when so many people are struggling to pay their essential bills, regulators need to do more to protect customers from unfair prices.
“They have started to take steps in the right direction but it is vital they continue to learn from their past mistakes when finalising their next price controls.
“Companies need to play their part in putting this multi-billion pound blunder right.
“They must compensate customers where they have been paying over the odds. If they don’t, Government needs to intervene.”

Compensation?

The charity is calling for the companies to offer their clients a rebate on their bills as well as ensuring this can’t happen. If people are not refunded, Citizens Advice are determined to call on the government to get involved.

Gillian Guy, chief executive of Citizens Advice, said: “Companies need to play their part in putting this multi-billion pound blunder right.

“They must compensate customers where they have been paying over the odds. If they don’t, Government needs to intervene.”

But it seems companies won’t be forthcoming with refunds – Ofcom, Ofgem, and Ofwat say it’ll be down to firms themselves to decide whether refunds are due.

What They Said…

A spokesperson for Ofcom said: “Our decisions have helped customers benefit from more choice and better services.

“That involves making complex forecasts on the cost of finance, which Citizens Advice has found to be largely accurate. We’ll continue to encourage investment in broadband, while protecting customers from high charges.”

A spokesperson for Ofcom said: “Our decisions have helped customers benefit from more choice and better services.

“That involves making complex forecasts on the cost of finance, which Citizens Advice has found to be largely accurate. We’ll continue to encourage investment in broadband, while protecting customers from high charges.”

On energy, an Ofgem spokesperson said: “While we do not agree with Citizens Advice’s estimate of excess profits, we welcome its report and recommendations.

“We will continue to work closely with them and wider stakeholders to apply lessons learnt from previous price controls for the next price control period.”

Meanwhile, Ofwat chief executive, Rachel Fletcher added: “We welcome the recommendations from Citizens Advice and the work it and other consumer bodies do to highlight important issues around the affordability of essential services.

“We have already made changes to the way we set the cost of capital through our price review, so customers will not lose out.

“Our early view on the cost of capital for 2020 onwards is the lowest so far, and together with other measures would reduce customers’ bills by £15 to £25 (before inflation).”

How To Change Energy Supplier

Everyone knows you should change your energy supplier annually, but it seems harder work than it should.
Read Energy Seek’s guide switching energy suppliers for everything you need to know.

Debt of the Average Brit

By | Financial Help, News

Debt of the Average Brit

A new survey has found that the average adult in Britain has debts of £6,936.

The survey commissioned by Salary Finance shows that the average adult in Britain has debt of almost £7,000 – this excludes mortgages and student loans. Several worrying factors were also revealed in the survey.

One of the things revealed in the survey was that people only really consider themselves ‘in debt’ once they owe £3,882. However they only consider it a problem once this figure hits £6,000. It also revealed that 10% of people wouldn’t even worry until their debts were over £10,000!

Around 50% of those questioned say they believe that being in some level of debt is so normal that they don’t see it as a bad thing, and 30% admit that using a credit card, loan or overdraft is just a part of life.

Asesh Sarkar, CEO of Salary Finance, said: “In today’s world it is normal for people to have some kind of debt.

“However, these stats are telling, in that people are not tackling their debt until it reaches thousands of pounds, and by this stage it is causing them to worry and may be difficult to control.

“When you’re already seriously in the red, a one-off unexpected expense can cause major issues, leading to missed payments, bad credit and a situation where people are forced to turn to high interest borrowing to stay afloat.

“When people fail to tackle their debt until it is of significant worry to them, they find it much more difficult to get out of a spiral of debt.”

Get Help Now

Don’t wait until you’re in £10,000 worth of debt! Contact us now and get out of debt whilst you still can!

Loading

Spending Soars on Payday!

By | Financial Help, News

Spending Soars on Payday!

A new survey has revealed that a third of people double their non-essential spending on payday.

Post Office Money ran a survey that found that people not only spend much more than they need to on payday, but they were also likely to ‘font-load’ their spending, meaning they spend at the start of the month.

Unfortunately, this feeling of wealth doesn’t last, with many people admitting they are struggling by the end of the month. 20% of people have said they dip into their savings to cover costs toward the end of the month.

Ross Hunter, head of product at Post Office Money said: “Saving can be hard, as anyone who has tried to stick to a budget knows.
“However, realising what can trigger your unconscious spending can give you back control and help improve your long-term savings potential.”

One of the biggest triggers was said to be ‘scrolling on their mobile’, coming in second and third were ‘having a bad day’ and ‘feeling stressed’. 10% of people questioned admit they find it hard to browse online without spending money.

Loading

Personal Insolvencies in Scotland on the Rise

By | Financial Help, News

Personal Insolvencies in Scotland on the Rise

In 2018-19, the number of personal insolvencies in Scotland rose by 5%.

It is reported that there were 4,862 ‘awards’ of bankruptcy (sequestration) in Scotland and 7,917 protected trust deeds (PTDS) There was also a rise in the approvals of the debt arrangement scheme (DAS).

The Scottish government’s business secretary Jamie Hepburn said the figures highlighted “the challenging economic times we are facing with more Scots experiencing increased financial pressures”.

He added: “The ongoing uncertainty around EU exit, alongside the challenges of the roll-out of Universal Credit, bear much of the blame.

“In this climate it is more important than ever that people encountering financial difficulty seek early advice and the appropriate solution.

“It is welcome to see an increase in the number of Scots accessing the Scottish Debt Arrangement Scheme which helps them to pay back their debts. Recent reforms to the scheme will also allow more individuals in Scotland to benefit from this initiative going forward.

“The Scottish government urges those in financial distress to obtain money advice at the earliest possibility in order to take control of their finances and ensure the right debt solution is found to suit their circumstances.”

bailiff-worry

16% Rise in Problem Bailiffs

By | Financial Help, News

16% Rise in Problem Bailiffs

Citizens Advice has recently reported a sharp rise in the number of people who are seeking help with “bailiff-related issues”.

The numbers reported to Citizens Advice are shocking, with more 103,000 reported problems for 12 months up to March 31 this year. Not even mentioning that this is a 16% rise on the year before, the worrying aspect is that this is what is reported to Citizens Advice, meaning the number is MUCH higher.

“These figures are disappointing and reveal the harsh reality for people in debt,” said Gillian Guy, chief executive of Citizens Advice.

At Debt Assist we can see that this increase is part of a wider-ranging problem with household debts. As we reported earlier in the year, one-in-three people in the UK are struggling to repay their household bills, and this often leads to bailiff action. Unfortunately not all bailiffs follow the rules; One-in-six reported incidents involved bailiffs “threatening to break in, or unlawfully doing so.”; Other worrying issues included bailiffs charging excessive fees and refusing to set up affordable repayment plans.

A Ministry of Justice spokesperson said: “There is absolutely no excuse for aggressive bailiff tactics, which is why we’re examining the case for an independent regulator as part of our call for evidence.”

Around 30% of people who have debt on their household bills have dealings with debt collectors and enforcement agents (bailiffs). Fortunately there may be something you can do about it.

IVAs Supercede Bailiff Action

An individual voluntary arrangement (better known as an IVA), is a legally-binding financial solution, whereby your creditors agree to an affordable repayment schedule. As it’s legally binding, bailiffs cannot intervene in order to recover the debts.

This means that if you are currently on an IVA, if bailiffs should come to your property, you can simply tell them you’re on an IVA (they’ll usually want to talk to us) and there is nothing more they can do.

For more information on IVAs, or any other debt solution, contact our award-winning advisers today. There is no fee for our help, and no obligation to use any of the debt solutions we may suggest to you (but we think you will). Simply complete the short form below and we’ll get back to you!

Loading