Now is the time that many will be looking to transfer their debt from one credit card to another, to take away the pain of having to pay excessive interest on their credit card account.

While there are plenty of credit card comparison sites on the internet, choosing a new deal is by no means a simple choice. Despite our pleas for plain speaking and easy to understand terms, the credit card market still represents a minefield for those looking to transfer outstanding balances.

It is therefore very important to take stock of personal finances and ability to pay off the outstanding balance before making a switch to another provider, bearing in mind that if you cannot repay the balance during the interest free period, interest on the balance will be charged at the standard rate.

One of the best credit card deals around at present is the MBNA Platinum card, which charges an interest rate of 5.9% throughout the life of the outstanding balance, so even if it takes ten years to pay off, the interest will remain at 5.9%. This would represent a far better deal than many of the zero percent transfers on offer if you are unlikely to be able to pay off the card balance in a restricted time frame.

This comes out favourably against many of the providers offering, say 0% on transfer balances for 15 or 16 months and then reverting to standard rates.

These deals are not restricted to personal credit cards, as there are also similar offerings for professionals looking for a business credit card that offers a great deal along with greater online protection and chip and pin security on the high street.

another 25billion please!

The Bank of England have announced that they will pump another £25billion into the quantitative easing programme, taking it to a total of £200billion in what analysts believe will be the last expansion of the scheme to revive the UK economy.

The bank say that it will take another three months to complete bond purchases through the QE programme which has been increased because the economic recovery is likely to be slow.

The interest rate remains unchanged at 0.5% with analysts also suggesting that it would stay low until late 2010 when it will increase as a tool against expected inflation.

BoE warned that the UK could experience a short sharp shock of inflation as a consequence of higher fuel prices and the reversal of the governments controversial VAT cut during the coming months, when they predict that inflation will rise above the 2% target.

Experts are divided on the latest news, with many doubts being raised as to whether the QE strategy is working. Edward Manashy of economist Charles Stanley says;

“Where QE has succeeded is that it has raised asset prices and allowed companies to raise funds in the capital markets. Where QE has yet to succeed is convincing banks to lend money to smaller business enterprises and private individuals.”

Former MPC member DeAnne Julius is critical of the programme saying, “You have to ask yourself if it is helping the real economy and not just the banks. I’m afraid the answer is that it is not.”

With the advice available via a range of resources, including Government help and advice from organisations such as Citizens Advice Bureau, households can get help to avoid the trauma of repossession.

At the start of October the government launched a new campaign that encourages people who are having difficulty keeping up their mortgage repayments to visit the website mortgagehelp.direct.gov.uk or to call the National Debtline on 0808 808 4000, to find out about the comprehensive range of support the Government has put in place at every step of the repossession process.

The video below offers help and advice from experts within the industry and also looks at some case studies:

credit card debt down

There was a surge in mortgage approvals for house purchases in September, reaching the highest figure for 18 months and once again surprising the financial ‘experts.’

The number of mortgages approved for September was 56,215, rising from 52,970 in the previous months and well above economists estimates of 54,000.

While consumer confidence in house purchases currently increases month to month, unsecured borrowing has fallen dramatically, recording a downward trend over the last three months.

In fact consumers repaid £262million of their loans in September, following a figure of £373million being paid off of unsecured loans and the like in August. Consumers are also holding back on credit card debt, borrowing a net £79million on their cards, the lowest since December last year.

It could of course mean that the general public are preparing themselves and their finances for the Christmas period by paying of their current debts early.

The CEBR believes that the record low interest rate will remain at its current level of just 0.5% until at least 2011 and do not foresee the rate increasing to any more than 2% by 2014.

The pound will suffer further says the report, predicting a low of $1.40 and crucially falling to new lows against the Euro where the pound could ‘possibly’ fall to under one euro.

Further quantitative easing of £75billion-over the already announced £175billion, is also predicted.

The CEBR base their predictions on the government managing to slash the UK budget deficit by £100billion over the next parliament, with £80billion coming from spending cuts and £20billion from rises in taxes.

Douglas McWilliams chief executive of CEBR says;

“We are likely to see an exciting policy mix, with the fiscal policy lever pulled right back while the monetary lever is fast forward. Our analysis says that this ought to work. If it does so, we are likely to see a major rerating of equities and property which in turn should stimulate economic growth after a lag.”

The announcement from HSBC came with accusations that other UK banks and building societies are not doing enough to open up mortgage finance.  The HSBC said, “While other lenders were in retreat, we became the UK’s largest lender in the first half of 2009 on a net lending basis. Today we are reinforcing this commitment with a huge increase in the funds available for both first time buyers and home movers.”

Head of mortgages at the bank, Martijn van der Heijden, said there is a new optimism among buyers that house prices will not fall any further. He said,  “We committed £15 billion to mortgage lending in 2009 – double our 2007 lending – and £1bn of this was made available exclusively to home buyers with deposits of just 10per cent. Demand has been very strong and we have reached this target, so we are now committing another £500 million to this vital segment of the market.”

National Savings & Investments (NS&I)

The prize rate is normally kept in line with the Bank of England interest rate and was cut from 1.8% to 1% in March this year.

In 2007 with the collapse of Northern Rock and other financial institutions NS&I prospered as money flooded in with customers looking for a safe haven for their savings. In the financial year 2008/9 NS&I easily exceeded their fund raising target, but since announcing the cut in the prize fund this year the trend has reversed.

Savers are now looking to earn the best interest possible and are switching their cash to bond’s and the like with bank’s and although the interest rate is still pretty abysmal, the schemes do offer some interest payout, rather than clients relying on winning premium bond numbers with NS&I.

You save your money – you take your choice.

The Bank will also continue with its current £175billion asset buying programme which was increased from £125billion last month.

Some strategists had hoped that the Bank would cut the interest rate that it pays to other banks who hold reserves with it, as a means to encourage them to lend money rather than stockpile it at the central bank.

But the no change announcement will appease many of the financial experts who see financial stability from the BoE as essential to maintaining the slow path to recovery for the UK.

In 2006 Portman Building Society briefly offered a 1.95% deal, but was overloaded with small print clauses that tied customers to the product for several years beyond the two year fixed rate.

The HSBC offering also suffers from some tight conditions, but is expected to start a price war among rival banks who have so far refused to pass interest rate savings on to customers, preferring instead to re build their own reserves, show a good profit and empty the coffers with bonus payments.

Restrictions on the latest HSBC mortgage deal will keep it out of reach for first time buyers and in fairness, most house purchasers. The special rate is available only to clients who can put up 40% of the buying price as a deposit and even then there is a hefty ‘arrangement’ fee of £1,119.

Other restrictions on the latest HSBC product include applicants needing a perfect credit history and the fact the two year deal is linked to the HSBC Standard Variable Rate (SVR) which currently stands at 3.94%. If the SVR increases  so too does the fixed rate and it reverts to the SVR once the two year period has ended.

Other leading lenders Barclays, Woolwich and Cheltenham & Gloucester reacted quickly to the HSBC news by trimming the rates on their own products, although it has to be said it was more of a gesture than anything significant.

Figures from the National Association of Estate Agents suggest that over 50,000 homes were purchased in July 2009, compared to a low point in November 2008 when the figure was 27,300.

To revert back to a healthy housing market that figure needs to be consistently 60/70,000.

As an aside, with all the talk from the FSA regarding transparency from financial institutions, isn’t it about time that banks offered mortgages in plain English with no arrangement and termination fees, no small print and easily comparable terms?

The average rate on a five-year 75 percent loan-to-value mortgage taken out in July rose  to 5.7 percent, its highest level since October. Similarly a two year fixed rate mortgage based on the same lending criteria reached 4.46% showing the highest level for this product since December.

Perversely, the standard variable rate for mortgages remained the same at 3.95%, still considered to be low by historical standards.

The increase in the two and five year rates reflect the lenders concerns over the potential of a housing market recovery and also it’s sustainability if and when it starts, along with longer term interest rate expectations.

It appears that both lenders and consumers are taking every precaution in the housing market, having had our fingers burnt by the current crisis, no-one is in a hurry to burden themselves with further possible bad debt.