BeatThatQuote News

When a personal loan is the right way to borrow

Wed, 01 Jul 2009 18:06:30 GMT

By Laura Starkey

Personal loans may have increased in price since the credit crunch - but in some circumstances, using one is still the smartest way to borrow. Here's how to work out whether a loan is the right choice for you.

With 0% and low rate credit cards often seen as the cheapest ways to borrow money, it's easy to overlook the humble personal loan.

In fact, since the start of the credit crunch, personal loans have had a pretty bad press. The Bank of England base rate is at an all-time low of 0.5%, yet many banks have begun to charge customers higher rates on loans over the past year.

However, there are some circumstances in which personal loans are a brilliant way to borrow. They offer benefits that credit cards cannot, and may be more suitable for some individuals than a 'flexible friend'.

In this article, I'll outline five situations where I think taking out a personal loan might make sense.

1. When you can get a market leading rate

Firstly, it's important to remember that, while the average cost of a personal loan may have increased since last year, there are still some attractive deals available for those who'd prefer not to use a credit card.

Right now, the market's cheapest loans come with APRs of around 8% - and although that's significantly higher than the Bank of England base rate, it's roughly half the standard APR charged by most credit card providers!

A current market leader is Alliance & Leicester's personal loan, which charges 7.9% APR (typical) on loans of £7,500 to £15,000.

2. When your other debts are more expensive

If you're planning to borrow to consolidate existing borrowing, there are a variety of options you could consider. 0% balance transfer deals and long term, low rate credit cards are tools that have helped thousands of people deal with expensive debts.

However, personal loans can also seriously undercut the cost of old balances. A deal such as that from Alliance & Leicester could slash the interest payments on a typical credit card balance by around 10 percentage points, or reduce the cost of store card debt by up to 22 percentage points!

Before pursuing any kind of debt consolidation, however, it is important to understand that you shouldn't clear old balances with a new loan or credit card just for the sake of bringing your borrowing together.

Only pay off balances that are costing you more than your new loan (or credit card) will. If you add cheaper debts into the mix without thinking, you will actually increase how much it costs you to clear them!

3. When you need to borrow a substantial sum

If you need to borrow a substantial sum of money, it may make more sense to use a personal loan than a credit card.

One reason for this is that borrowers are unable to state the exact credit limits they need when applying for new plastic. This could mean that, even if you are accepted for the card you want, you are left without the money you need.

Conversely, personal loan applications allow individuals to be specific about their requirements. For example: if you know you'll need £8,000 from your bank, you can apply to borrow this exact sum over a period of time that will suit you.

It's worth noting that, as a general rule of thumb, personal loans of £7,000 and above tend to come with cheaper APRs than loans for smaller amounts. However, this is no reason to borrow more money than you need.

Don't forget that, even if you managed to access a lower interest rate by doing so, you'd be paying that rate on a larger lump sum. As a result, you'd be less likely to save in the long term.

4. When you need a structured plan for repayments

When they're handled cleverly, I think credit cards are fantastic financial products.

0% balance transfer cards, long term, low rate deals and 0% purchases promotions can all help slash the cost of borrowing if they're used correctly.

Nevertheless, some people run into problems with credit cards. Most demand that borrowers pay back only a small percentage of their total balance each month, typically around 2-3%.

If people choose to, they are free to repay more. However, this flexible approach to repayments can mean less disciplined borrowers run up large bills which may take many years to clear.

Only ever paying your credit card's monthly minimum repayment (MMR) may mean your debts last decades, as Victoria Bischoff explains in this article.

On the other hand, taking out a personal loan will tie you in to a specific interest rate and a strict repayment plan that has an agreed start and end date. From the day you draw down your funds, you'll know how long it will take you to pay back what you've borrowed and how much your loan will cost you.

5. When you may not be accepted for a 0% purchases credit card

Thanks to the effects of the credit crunch, credit card providers are now far pickier about who they will - and won't - lend to. Therefore, it's a good idea to check your credit history before applying for a market leading deal such as a 0% purchases or balance transfer credit card.

Should you find there are blemishes on your borrowing past, trying to get a top card may do you more harm than good.

If you are rejected for the deal you want, there will be a recent 'footprint' on your credit file that is visible to other lenders - and this may put them off giving you the credit you need.

If you're in any doubt that your credit rating is very good, applying for a personal loan may yield a better result than opting for a 0% deal.

Although you may have to pay more in interest for your borrowing, targeting your application in this way - perhaps even by opting for a slightly more expensive loan than the market leader - may mean it is more likely to be successful.

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

The essential guide to graduate finance

Mon, 29 Jun 2009 15:37:32 GMT

By Laura Starkey

Many people leaving university this summer will face a tough job market, a serious debt hangover and the shock of starting to pay bigger bills than ever. Here's how ex-students can make sure they stay on the financial straight and narrow.

If you graduate from university this summer, chances are you're feeling pretty nervous about what happens next.

Not only is it scary to have to leave behind the life you've built during the three or four years of your course; this year, it's likely to be more difficult than ever for fresh graduates to get jobs.

With the UK deep in recession and unemployment still rising, the last thing any university leaver needs is to get into a muddle with their money. But I know from bitter experience that, despite all the jokes about student spending, it was after leaving university that I made my daftest financial decisions.

As always, I want to help others learn from my money mistakes.

Here are the seven things I wish someone had told me the year I graduated.

1. Make a plan for ditching your overdraft
Most student current accounts come with a 0% overdraft which lasts for the duration of your course.

However, as soon as you graduate the clock will start ticking on your 0% deal.

It's likely your bank will allow you a limited period of time to repay what you owe, after which interest charges will apply. Therefore, it's important that you check the terms and conditions of your account and work out how long you have before your overdraft will start costing you money.

Make a plan to repay your overdraft within that period. Don't forget, though, that there is no reason to stick with your bank just because you're overdrawn.

You may be able to find a longer 0% deal by comparing current accounts and switching to a different provider.

The Abbey Account (Preferred Overdraft Rate), for example, will match overdrafts of up to £5,000 when you switch to it and typically charges 0% on overdrafts for 12 months. To qualify for this deal, you'll need to pay a minimum of £1,000 a month into the account.

2. Don't be tempted by a graduate loan
Banks offer students 0% overdrafts because they believe graduates will be profitable customers later.

Therefore, don't be surprised if your bank offers you a graduate loan merely minutes after you've donned your cap and gown.

Before jumping at the chance to clear your overdraft in one fell swoop or grab enough cash for a holiday, consider: do you really need a loan?

Also, look at the terms of the loan you are being offered. Is it really a competitive deal?

Think twice about taking out another loan, and if you really need to borrow don't jump at the first deal your bank offers you. It's a good idea to compare loans from a variety of providers before signing on the dotted line.

3. Approach credit cards with caution If there's one crucial credit card fact you should remember, it's this: it is incredibly expensive to be in debt on a credit card charging a standard APR (typically around 17%).

If you need a credit card for borrowing, try to grab one with a 0% on purchases period. You can find out how these work by reading this article.

Alternatively, if you're planning to use a credit card for everyday spending and will repay your balance in full each month, you might want to consider using a cashback or rewards credit card. This article explains how a cashback card could earn you hundreds of pounds a year.

However, if you have never borrowed before your credit history may be so short that lenders are reluctant to offer you their best deals.

In this case, a carefully handled credit builder card could help. More information on how to use these cleverly is available here.

4. Be prepared for bigger bills
Leaving full-time education opens the door to a number of bills you're unlikely to have faced before. Key among them is council tax.

It's a good idea to find out how much council tax you'll have to pay on any property before you agree to rent or buy it. Depending on where you live and the council tax band your home belongs in, the bill could make a big difference to your budget.

It's also worth bearing in mind that your spending on essentials such as rent and travel may increase after graduation – particularly if you move to a big city like London to start work.

5. Make a realistic budget
Budgeting is an important part of setting yourself on the financial straight and narrow after graduation. Knowing how much cash you have coming in and going out of your accounts each month is vital if you are to keep on top of your bills, make any necessary debt repayments and avoid spending more than you earn.

Researching how much money you'll need for essentials (such as those above) is crucial if you're to make a realistic budget. Keeping a spending diary for a week is also a useful way to work out where you might be splashing too much cash.

It might seem a dull prospect, but setting aside a few hours to trawl through your bank statements and create a proper spending plan should pay dividends in the long run.

If you fail to budget, you won't be fully in control of your cash – and it's far more likely you'll drift into debt.

6. Get to know the tax man
When I received my first proper payslip, I was horrified. Between them, income tax and national insurance had claimed a huge chunk of my hard earned cash!

However, there is no reason why today's graduates should face the sort of shock I did. It's easy to work out how much of your salary you'll receive after tax using a smart website such as www.listentotaxman.com.

Remember, understanding how much tax will be deducted from your earnings is vital if you're to ensure your budget is accurate.

What's more, knowing how much tax you should be paying will help to make sure you aren't assigned an incorrect code or over-charged.

7. Don't worry about your official student loan
Finally, it's important not to panic about paying back your official student loan immediately.

Remember: you won't be required to make repayments until you are earning £15,000 a year, and the amount you are charged each month will be calculated in accordance with your salary.

What's more, from September 2009 the rate of interest charged on official student loans will be 0%.

In my view, ex-students should prioritise paying back their overdrafts and any other student debts. Conversely, I don't believe there is any reason why graduates should push themselves to repay their official student loans early.

You can find a full explanation of why in this article.

Crucial credit card DOs and DON'Ts

Mon, 29 Jun 2009 09:23:41 GMT

By Victoria Bischoff

If used correctly, credit cards can be very useful creatures - but make too many mistakes and it could cost you. Victoria Bischoff explains five credit card lessons you need to learn…

These days, most of us carry at least one credit card in our wallets.

However, very few of us have time to sit down with a magnifying glass and decipher the tiny print in our plastic's terms and conditions.

If you don't have the first clue about payment hierarchies or couldn't hazard a guess at what 'MMR' stands for, read on for a crash course in how - and how not - to use your flexible friends.

1. DON'T pay interest when you don't have to

Unforeseen costs have a habit of creeping up on us when we can least afford them.

However, a 0% purchases credit card will help spread the cost of an expensive item over an extended period of time - without charging you for the privilege.

Remember, though, that 0% purchases deals are temporary promotions. If you fail to pay off your balance within the offer period or don't switch it to another 0% card, you're likely to be hit with a much higher rate of interest when your deal expires.

If that ship has sailed and you're already paying a high level of interest on previous spending, you may want to consider shifting your expensive debts to a 0% balance transfer card.

Although you'll probably have to pay a small fee to shift your debt, these clever cards eliminate interest charges so that every penny you repay each month goes towards beating down your total balance. This should allow you to clear your debt more quickly and cheaply.

The longest 0% balance transfer deal currently on the market comes with the Virgin Credit Card and lasts for 16 months. You'll have to pay a 2.98% to transfer a balance to this card.

2. DON'T spend on a balance transfer credit card

If used wisely, a balance transfer credit card can be a brilliant way to pay down old, expensive debts more quickly and cheaply.

However, in order to avoid being stung by what's known as negative payment hierarchy, it's vital you remember this golden rule: never spend on a balance transfer card.

This is because most lenders will weight your repayments towards your transferred balance, placing your new purchases at the bottom of the payment priority list.

As a result, you won't be able to tackle the debt you've built up by spending. It'll be busy accruing hefty interest charges until you've cleared your entire balance transfer!

If you do need to spend on your balance transfer credit card, choosing a card with an identical 0% balance transfer and 0% purchases period should help you escape the peril of negative payment hierarchy.

The Bank of Scotland All In One Credit Card and the Halifax All In One Credit Card both offer 0% on balance transfers (for a 3% fee) and 0% on new purchases for a 9 month period.

3. DO try to make more than your monthly minimum repayment

If cash is tight and your budget's over stretched, it can be tempting to simply make the monthly minimum repayment (MMR) your credit card provider demands.

However, only ever paying the MMR means it could take you years - if not decades - to clear your debt. What's more, huge amounts of your hard earned cash will be gobbled up by interest payments along the way.

For example: my pal Paul owes a fairly modest £2,500 on his plastic at a rate of 17% APR.

The MMR on his card is 2% of his balance, or £5 - which ever is the greater.

If Paul continues to pay the MMR each month, it will take him an incredible 419 months to clear his debt - that's nearly 35 years! In addition, he'll pay almost £4,500 in interest during that time.

On the other hand, if he simply pays a flat sum of £50 per month (the same sum as the original MMR), Paul could clear the card completely in 70 months - just under six years. In addition, he'd pay a far lower £1,605 in interest.

4. DO pay your credit card bill on time

If you fail to pay your credit card bill on time or exceed your credit limit, you're likely to be stung with a nasty fee of around £12.

Even worse, you could also damage your credit rating. This could make it harder for you to obtain credit in the future.

One of the safest ways to ensure you never miss a payment is to set up a direct debit that will cover at least the minimum repayment required by your lender.

If you have a balance transfer credit card, it's particularly important to do this. Should you miss a payment or exceed your credit limit, your lender may not only charge you for the privilege - it's possible your 0% or low rate deal may be withdrawn!

If you do falter on a payment, contact your credit card provider immediately and eat some humble pie. If this is the first time you've missed a payment, your lender may waive the charge or allow you to keep your promotional deal.

5. DO consider a clever cashback credit card

If you regularly use a debit card to pay for every day expenses, ditching it in favour of a cash back credit card could make you hundreds of pounds a year.

Right now, if you can snag the American Express Platinum Cashback Card, you'll earn 5% cashback on everything you spend during the first three months. You'll also receive cashback on subsequent purchases, on a sliding scale depending on how much you spend.

However, it's crucial you repay your card balance in full and on time each month. If you don't, your cashback benefits will easy be outweighed by the interest charged on your debt.

Don't forget, another advantage of using a cashback credit card for everyday spending on items that cost between £100 and £30,000, you'll be protected under Section 75 of the Consumer Credit Act. This states that if a retailer doesn't deliver your goods (or they aren't as described), you can seek compensation from your credit card provider as well as the company that sold you the item.

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

Negative equity: what it really means

Fri, 26 Jun 2009 17:44:20 GMT

By Laura Starkey

As a new report reveals that nearly one in six UK homes is in negative equity, Laura Starkey looks past the headlines at what this really means for mortgage borrowers.

If you're a homeowner, the downward march of house prices over the past year and a half may have caused you some sleepless nights.

Doubtless, the hype surrounding the fortunes of the property market has done little to quell any sense of panic you feel.

Last week, global ratings agency Fitch (which provides independent credit opinions, research and data) released a report which suggests a massive one in six "prime" UK mortgages has fallen into negative equity.

The statistic sparked headlines up and down the country – but what does negative equity really mean for you?

Fitch's findings

Fitch looked at the mortgage loans that had been packaged together by banks and sold on to investors during the recent economic boom.

It focussed particularly on "prime" mortgage loans (those to customers with good credit histories).

Fitch found that 15% of the prime mortgages it studied now have higher values than the homes they were secured on. In other words, almost one in six UK homes is now in negative equity.

Fitch also revealed that householders in some parts of the country are more likely to be in negative equity than those living elsewhere.

The SR1 postcode area in Sunderland is the UK's negative equity hotspot, according to Fitch. 28.1% of homes there are worth less than the outstanding mortgages held on them.

So, what is negative equity?

Defining negative equity is quite simple. If you are in negative equity, it means that your property is worth less than the amount you owe on your mortgage.

For example: a borrower with an outstanding mortgage of £100,000 and a home worth £90,000 would be in negative equity by £10,000.

What it means if you're moving or remortgaging

Being in negative equity may be a problem if you need to move house. This is because you won't have enough ‘cash' in the property to put down as a deposit on your next home.

Likewise, negative equity is likely to create difficulties for anyone looking to remortgage. Thanks to the credit crunch, most lenders now demand substantial deposits of at least 10% from borrowers.

With no equity to use as a deposit for a new mortgage deal – and in the absence of a high loan-to-value (LTV) mortgage, such as a 95% or 100% mortgage – you may have to stay on your lender's standard variable rate (SVR) when your current deal ends.

Anyone whose home is repossessed may face additional financial stress if they are in negative equity. If your lender cannot make back the amount you originally borrowed when they sell your property, they may come after you for any sum still outstanding.

Don't panic!

However, it is important not to panic at the mere mention of negative equity. If you're affected by it, this doesn't mean you will fall into mortgage arrears or that you're at risk of repossession.

In fact, provided you can afford your mortgage payments and do not need to move or remortgage, being in negative equity is unlikely to have any impact on you.

What's more, because the Bank of England base rate is currently at an all-time low, some lenders' SVRs are fairly competitive in price. This may soften the blow for homeowners who are in negative equity and unable to remortgage with another bank or building society.

What you can do

If you're already in negative equity and are worried about it, there are steps you can take to help ease your mind and improve the situation.

Overpay on your mortgage: If you can afford to, increasing your monthly mortgage repayments will help you build up the equity in your home more quickly.

Many lenders now allow overpayments up to a set yearly limit, but others will not allow them at all – so it's important to check with your bank or building society before deciding to overpay.

Even if your lender is usually strict on overpayments, you may find they take a more sympathetic view if you are in negative equity.

Improve your home: Alternatively, making improvements to your home could increase its value and help pull you out of negative equity.

However, it is crucial to plan and budget carefully for any work you intend to do. If you spend more on making the improvements than they are likely to add to the value of your property, you could end up out of pocket.

Shrinking equity stakes

If you still have some equity in your home and are currently sitting on your lender's SVR, you might want to consider remortgaging sooner rather than later.

Similarly, if you're expecting to come off your current mortgage deal in the near future, it may be worth trying to book an attractive remortgage today. Many lenders now allow borrowers to reserve mortgages up to six months in advance.

While it's impossible to predict what will happen to house prices over the next few months, it is worth remembering that the further they decline, the less equity you will have in your home.

Should your equity stake shrink too far, you will find it more difficult to get a competitive new mortgage deal when you need one.

Keep calm and carry on

Whatever your situation, it's important to try and relax. As Fitch's figures show, millions of people have been affected by the property downturn. If you're in negative equity, you're far from alone.

Being in negative equity isn't an ideal situation, but it doesn't necessarily mean your dream of home ownership has become a nightmare.

In the long term, I think property prices will recover – it's just a matter of waiting for the upturn to arrive.

If you can keep calm and carry on as normal until then, you should find negative equity is far less scary than it seems.

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

8 useful tips for buying life insurance

Fri, 26 Jun 2009 17:30:04 GMT

By Laura Starkey

If you're in need of life insurance but have no idea how to go about buying a policy, these tips should help you find the right deal.

If you've reached the stage in your life where life insurance is a must-have financial product, the next step is finding a policy that will suit you.

However, searching for life insurance isn't always a simple task. The array of different options available to you may feel daunting, and there are many things you must consider to make sure you choose a policy that properly reflects your needs.

In this article, I'm going to offer eight tips that should help anyone on the hunt for a new life insurance policy.

1. Don't delay

If you know you need life insurance, don't delay buying a policy. If you are young and healthy, it will be cheaper for you to buy life cover now than it might be in a few years' time.

This is because all insurers base the price of customers' premiums on risk assessment – and in the case of life insurance, the key risk considered is how likely it is you will die.

2. Shop around

It's a good idea to shop around when buying any form of insurance, and life cover is no exception.

Shopping around is important because not all insurers assess risk in the same way. For example, insurance companies tend to increase prices for customers who don't have a healthy body mass index, but not all will add the same 'load' to an overweight customer's premium. (You can read more about this here.

Many mortgage lenders offer life insurance to their customers, but buying from them may mean you don't get the best deal. This is because lenders tend to be tied to just one insurance provider and are unable to scour the market.

If you're looking to compare life insurance deals, BeatThatQuote.com's life insurance service could put you in touch with an independent, whole-of-market broker who will help you find the cover that's right for you.

3. Pick the right kind of policy

Whether you buy level term assurance, decreasing term assurance or whole of life insurance will depend upon your individual needs and budget.

Level term assurance (LTA) is generally the most popular form of life insurance. A policy is taken out for an agreed period of time (the 'term'), which might be the length of time an individual expects their family to be financially dependent on them.

The payout a policy-holder's family would be entitled to if they died at any point during the term remains level; they'd get the same if you died after a year as they would if you passed away after 20.

On the other hand, decreasing term assurance (DTA) tends to be cheaper because it is designed to pay out a lump sum that decreases over time. You might opt for DTA because your life insurance policy is intended solely to cover your share of a repayment mortgage, and your family will therefore need a smaller payout from your insurer if you die later.

4. Make sure you buy enough cover

When deciding how much life cover you need, make sure you carefully consider the financial impact your death would have on your family.

It's likely that the bulk of any payment your family received upon your death would be used to pay off your mortgage.

However, it's important to make sure any other outstanding debts, such as credit card and loan balances, are covered too; if they aren't, your loved-ones will be left to pay them off out of your estate.

It's also important to consider how much your family would need to live on if your income was suddenly lost. Make sure your life insurance payout would cover any household expenses that couldn't be met in your absence.

5. Set up your policy in trust

A trust is a free and simple way to ensure that an asset you've put aside will benefit the people it is intended for.

If you don't put your life insurance policy in trust, the sum it pays out will automatically become part of your estate when you die and will be subject to inheritance tax (IHT).

Currently, this means that for every £100,000 paid out by your insurer your family could face a £40,000 IHT bill!

Luckily, putting your policy in trust is simple; all it requires is that you fill in the correct forms.

6. Consider single life insurance policies instead of joint cover

In previous years, it was often significantly cheaper for a couple to buy a joint life insurance policy than for each partner to insure their life separately.

However, it may now only cost slightly more to buy two life insurance policies instead of joint cover.

Doing so could provide your family with double the amount of protection, so it's worth investigating both options before committing to either joint or individual cover.

7. Be honest and accurate when you fill in your application forms

When you apply for any kind of insurance, it is crucial to ensure you honestly and accurately supply your provider with all the information they require.

If you fail to disclose essential facts – for example, by forgetting (or omitting) to mention a pre-existing medical condition to your life insurer – the company could refuse to pay out in the event of your death.

8. Don't forget to review your level of cover regularly

Finally, it's important to remember that life insurance isn't a financial product you can buy and then neglect. In order to ensure your policy offers you and your family the protection you really need, it's vital to regularly review your level of cover.

Life changing events such as having another baby or moving house can seriously affect how much life insurance you need – so make sure you re-think your requirements when something significant happens to you.

You can find out more about how people's life insurance needs change over time by reading this article.

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

Two cool current accounts that pay 6%

Wed, 24 Jun 2009 12:41:01 GMT

By Victoria Bischoff

If you're getting a bum deal from your bank, switching to a market-leading current account from Abbey or Alliance & Leicester could help you make the most of your money.

If you've had the same bank account since you were at school, chances are you'll be earning a pretty pathetic rate of interest on your hard earned cash.

According to research by the Office of Fair Trading (OFT) in 2008, the majority of UK consumers earn a meagre 0.5% or less on their credit balances.

Now the Bank of England base rate is at an all time low, the rates paid on most current accounts have plummeted even further since the OFT's study was published.

The NatWest Current Plus Account, for example, pays a lowly interest rate of 0.1% AER. Meanwhile, if you hold a Nationwide Flex Account, you will not receive a single penny in interest!

However, if you switch to one of these super deals from Abbey or Alliance & Leicester, you could earn an attractive 6% AER.

Pick a kinder, clever current account

Most people pay too little attention to their current accounts - especially when you consider they're among the most important financial products any of us own.

If you simply stuff your salary into your account and never check how much interest you're earning on your money, it's unlikely you're being paid a competitive rate.

To bag a better deal, it's important to shop around and compare current accounts. Consider your individual needs and go with a deal that you feel will work for you.

Right now, my top picks are the Alliance & Leicester Premier Direct Current Account and the Abbey Account (Preferred In-Credit Rate).

Both offer a market-leading rate of 6% AER on balances up to £2,500.

Under the terms of both accounts, this rate is fixed for 12 months. This means your money would protected from any further rate cuts for the duration of the deal.

However, be aware that on balances above and beyond £2,500, the interest rate on offer from both of these current accounts drops away to almost nothing.

The Abbey account also requires you to credit your account with at least £1,000 every month. If you fail to make the minimum deposit required, you'll earn interest at the bank's standard rate - currently just 0.10% AER.

With Alliance & Leicester on the other hand, you must be able to pay in £500 each month - otherwise a monthly account fee of £5 may apply.

It's also worth being aware that after your year-long fixed rate period is up, the interest paid in both the Abbey and Alliance & Leicester accounts will drop to 1% AER. Therefore, as with any financial product, you may have to shop around in 12 months' time to ensure you're still earning a competitive rate.

Both Abbey and Alliance & Leicester are owned by the Santander group, which means that if you already have a current account with either bank, you won't be eligible to switch it and grab one of these 6% deals.

If this is the case, your best option might be the Reward Current Account from Halifax and the Bank of Scotland. Instead of earning interest on your funds, for every month you pay in £1,000, you'll receive a £5 bonus - even if you're overdrawn!

If you're in the red…

If you're often overdrawn, a current account that offers a high in-credit interest rate is unlikely to be especially useful. What you need is a 0% overdraft facility.

Right now, the Abbey Account (Preferred Overdraft Rate) and Alliance & Leicester account both offer an interest free overdraft for 12 months.

Abbey will match your previous overdraft facility up to a ceiling of £5,000. However, in order to qualify for this offer you must pay a minimum of a £1,000 into your account each month. If you fail to do so, you'll have to pay the bank's standard overdraft rate of 12.9% EAR.

With the Alliance & Leicester Premier Direct Current Account, the maximum overdraft limit you can apply for is £2,000. If you need an overdraft bigger than this, you'll be charged 50p a day, up to a limit of £5 a month. You must also credit your account with a minimum of £500 each month.

It's also important to remember that these overdraft offers are ‘typical'. Lenders are not obliged to give every customer the deal as advertised, and the size and interest rate charged on any overdraft you are given will depend upon your personal circumstances and your credit score.

Switching's simple

Many people worry that switching their current account could result in important standing orders going astray or wages being paid into the wrong account.

However, these days switching doesn't have to be such a hassle.

Many current account providers provide a special switching service which will do all the necessary work on your behalf - including the change over of direct debits and regular bill payments.

These days, I'd like to think most people are too financially savvy to stick with the same products year after year. Many of us wouldn't dream of blithely accepting our car insurance renewal quote - so why not take the same attitude when it comes to your current account?

In my view, switching is an easy and worthwhile thing to do.

And after all, the only way we can stop these banks paying us derisory rates on our hard earned cash is to vote with our feet!

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

Q&A: How to save safely

Mon, 22 Jun 2009 18:51:16 GMT

By Laura Starkey

Last year, the collapse of several major financial institutions caused thousands of people to ask: how safe are my savings? Now, another building society's brush with disaster and Santander's decision to rebrand its British banks raise new questions about who we can trust with our rainy day funds.

Just a few short years ago, it might have seemed inconceivable that a bank or building society could collapse.

Sadly, we all know better these days. Since the start of the credit crunch, the demise of big name institutions including Northern Rock, Lehman Brothers, Kaupthing Edge, Icesave and Bradford & Bingley has seriously shaken people's confidence.

This month, West Bromwich Building Society managed to reach a deal with creditors and preserve its independence after intense speculation that it would need to be broken up or bailed out by the taxpayer. However, the society's brush with disaster acts as a timely reminder that it's too early to assume our financial institutions are 100% stable.

What's more, Spanish bank Santander's decision to re-brand Abbey, Alliance & Leicester and Bradford and Bingley – all British banks it has purchased during the downturn – has implications for how much cash new customers will be able to stash in their savings accounts.

So, what's the latest on how to keep your savings safe?

1. What protection is in place for savers?

First of all, it's important to be aware that not all kinds of savings are protected by the government. In this article, I'm going to explain the rules surrounding cash savings in bank accounts, building society accounts and ISAs – but if you hold investments, a pension or have a life insurance policy, you can find out about what protection you're entitled to by visiting the Financial Services Compensation Scheme (FSCS) website, www.fscs.org.uk.

As far as ordinary savers are concerned, the FSCS offers £50,000 worth of protection per individual, per financial institution.

In theory, this means that if you held £100,000 in savings with a single financial institution, only half of your money would be protected if the organisation collapsed.

The financial institutions covered by the FSCS must be registered with the Financial Services Authority (FSA) – so deposits with banks, building societies and credit unions are protected.

However, if you're saving through any other kind of scheme (for example, a loyalty stamps plan) the money you put into it will not be covered by the FSCS.

2. Sounds pretty simple. Is it?

Unfortunately, no. The crucial question all savers must consider is exactly what counts as a financial institution.

Nowadays, many of the high street's biggest banking brands are linked to one another and share their FSA registration – but you'd never know it from looking at them.

However, this is important because, with only one FSA registration between them, some groups of banks count as a single financial institution under FSCS rules.

In this situation, a saver who had deposits with three apparently ‘different' banks would be eligible for only one £50,000 dose of FSCS protection.

Therefore, in order to achieve the maximum level of protection possible for your cash, it's crucial that you ensure you know which banks are in bed with one another.

3. How do I know which banks share their FSA registration?

Most banks and building societies make their FSA registration numbers clear on their websites.

If two banking brands share the same registration number, under FSCS rules they will count as one institution.

Only the first £50,000 of an individual's savings within the institution – however many accounts their cash is held in – would be guaranteed.

Below is a guide to which of Britain's biggest banking brands are linked together as single institutions. However, please note that referring to this table is no substitute for researching the safety of your own savings.

Group	Banks / building societies connected
A	Cheltenham & Gloucester, Lloyds TSB
B	Clydesdale Bank, Yorkshire Bank
C	The Co-Operative Bank, Smile
D	Bank of Ireland, Post Office
E	First Direct, HSBC
F	Barclays, Woolwich
G	Scarborough Building Society, Skipton Building Society*
H	BMW Savings, Newcastle Building Society
I	Barnsley Building Society, Yorkshire Building Society*
J	Direct Line, Royal Bank of Scotland, Virgin Money
K	Heritable Bank, ING Direct, Kaupthing Edge
L	Cheshire Building Society, Derbyshire Building Society, Dunfermline Building Society, Nationwide*
M	AA Financial Services, Bank of Scotland, Birmingham Midshires, Halifax, Intelligent Finance, Saga.
N	Abbey, Asda, Bradford & Bingley, Cahoot

* If you had savings with any of these institutions before they became connected in the groups shown here, you will have £50,000 worth of FSCS protection for each different account until the end of 2009. In 2010, a permanent solution to the issue of how these groups will be FSA registered should be found. New savers with banks or building societies that are now grouped together are already entitled to just £50,000 worth of protection in total, no matter how many accounts are held with its different brands.

4. What's happening with Santander?

Spanish giant Santander currently owns all the banking brands in group N, above. It also owns Alliance & Leicester.

As you can see, Alliance & Leicester isn't listed in the table. This is because it currently operates under its own FSA registration.

This means savers could safely hold £50,000 in accounts with both A&L and, for example, Abbey or Bradford & Bingley.

However, Santander recently announced it intends to re-brand all its British banks with the Santander name. Once this has happened, it's likely all new savings with any of Santander's banks will be protected under a single FSA registration – so if you stashed £50,000 in an A&L account after the re-branding, you couldn't then save an additional £50,000 with Abbey in 100% safety.

5. What about joint accounts?

If you hold a joint account with any financial institution, remember: both individuals are entitled to £50,000 worth of protection under the FSCS.

This means a couple with £100,000 of savings with a financial institution would have the full amount guaranteed under the scheme. Any savings above this amount, however, would not be protected.

6. What if my bank isn't British-owned?

If your savings provider isn't a British-based company, your money may be protected in a different way.

Some countries offer savers less protection than the FSCS, in which case some of your money would be guaranteed overseas. The remainder of your cash (up to the £50,000 limit) would be covered by the FSCS.

In the case of countries that offer more protection than the FSCS (such as Ireland and the Netherlands), 100% of your savings would be guaranteed by their own compensation schemes.

This second point affects savers with the Post Office, as it is operated by the Bank of Ireland. It also affects ING Direct customers and those whose Kaupthing Edge accounts were taken over by ING Direct in 2008.

7. Won't the government just guarantee our savings anyway?

After the Icelandic bank Icesave collapsed last year, the Chancellor, Alistair Darling, stepped in to help savers who'd stashed more than £50,000 with it.

He guaranteed 100% of customers' cash even though FSCS rules didn't promise this – and it's led many people to question whether the FSCS's £50,000 limit would ever actually be imposed.

The truth is, there is no way to know. However, it's certainly dangerous to assume that the government would step in to help you if you didn't take responsibility for saving safely.

Hopefully, very few of us will ever experience the stress of hearing our bank has gone bust. However, if you make sure you keep a maximum of £50,000 with any financial institution and always ensure you know how your money is protected, your cash should be safe if the worst does happen.

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

Read this before you borrow money!

Mon, 22 Jun 2009 18:35:07 GMT

By Laura Starkey

If you’re looking to get a great deal on a credit card or loan, make sure you consider these four crucial questions before applying...

Not too long ago, in an era that now feels far away, it seemed simple to borrow money.

Banks gave out mortgages that were larger than the value of the people’s properties, and it was easy to obtain a deck of credit cards with sky-high limits.

The credit crunch has changed all that. Getting credit is now more difficult than it was before the downturn, and there’s been a shift in attitudes towards debt.

If you need to borrow – but are looking to do so cheaply and responsibly – here are the four basic questions you should ask yourself.

1. How good is my credit history?

Your credit history is information about your past borrowing behaviour.

Every time you apply to borrow, your credit history will be assessed by the lender you have chosen so they can decide whether to offer you a loan, credit card, overdraft or mortgage.

Since the credit crunch, banks have been stricter than ever when it comes to scrutinising people’s pasts. Therefore, it’s important to get a copy of your credit file and look carefully at what it contains before you make any application to borrow. (Find out How to improve your credit rating.)

If you’ve made mistakes with credit in the past, be aware that this might affect your ability to get a market-leading credit card or loan today. The best 0% purchases credit cards, for instance, may be difficult for you to get if there are blemishes on your credit history.

Remember, applying for a financial product you do not get could further damage the chances you’ll be able to borrow. Every application for credit will leave a ‘footprint’ on your file which is visible to other lenders – so think about whether you’re likely to be approved for a loan or credit card before you apply.

2. How much do I need to borrow?

Before you apply for any form of credit, you need to decide how much you’re looking to borrow.

In the past, some companies used TV advertising to suggest that customers could borrow ‘extra’ cash when applying for loans – perhaps to fund holidays or home improvements.

In my view, it’s a terrible idea to borrow more than you actually need to – no matter how easy it might seem to add an extra £1,000 to your loan amount or credit card balance.

That’s because you’ll have to pay interest on every penny you borrow from a bank or credit card provider – and the more you borrow, the more you will have to pay for the privilege.

3. How long will I need to repay my debt?

Once you know how much you need to borrow, the next step is to consider what monthly repayments you can afford and how long you’ll need to pay off your debt in full.

It’s important to be realistic when budgeting for your monthly repayments. If you set them too high, you may over-stretch your finances and find you’re driven into more debt later down the line.

On the other hand, it’s vital to ensure you don’t take longer than is necessary to repay your debt.

Remember, the longer it takes you to completely clear a loan or credit card balance, the more time you’ll spend paying interest – and the more your debt will cost you overall.

It’s also important to consider whether you’ll be better off committing to a structured repayment plan for your debt, or with the option to pay it down in a way that is flexible.

If you’d prefer a regimented approach to repayment, a personal loan might work for you. On the other hand, you may feel you’re disciplined enough to take charge of your own repayments – so borrowing on the right kind of credit card could be a smart move.

4. What’s the best way for me to borrow?

Once you’ve answered the three key questions above, it’s time to work out which kind of borrowing is right for you.

I believe most borrowers should think about the three options below before considering a secured loan or an extension on their mortgage.

Bear in mind that the table below isn’t intended to provide a definitive judgement on which kind of credit could suit you. Rather, it’s designed to get you thinking about the different options available and which of them might be appropriate.

Option	Advantages	Disadvantages	Product picks
0% purchases credit card	Allows interest free borrowing for a finite period after the card is first taken out. Allows flexible repayments above a minimum required level (typically 2-3% of the total card balance).	Will charge a high rate of interest after the introductory 0% purchases period ends. Borrowers must clear their balances in full within the time limit set in order to avoid charges – so may not be suitable for those who need to borrow larger sums. Applicants are likely to need a very good credit history.	The Tesco Credit Card currently offers 0% on new purchases for 12 months. Alternatively, the BT Retail Card offers a 10 month interest free period on new purchases.
Long term, low rate credit card	Allows borrowing at a low rate of interest for either a set period of time or until the purchases made on the card are paid off in full. Allows flexible repayments above a minimum required level (typically 2-3% of the total card balance).	Depending on which card you choose, the interest rate charged may be variable and could therefore increase. Borrowers can’t apply for a specific credit limit, so you may find you are not offered the right amount for your needs.	The Barclaycard Simplicity Visa currently offers a low rate of 6.8% APR on both new purchases and balance transfers.
Personal loan	Usually allows borrowing at a fixed rate of interest for an agreed period of time. Borrowers are required to commit to a repayment schedule and know exactly when their whole debt will be paid off. Borrowers can apply to borrow a specific sum at a rate and over a period of time to suit them.	Repayments are not flexible. The same sum must be paid off each month or you may face charges and negatively affect your credit rating. Interest rates on personal loans tend to be higher than on 0% purchases and long term, low rate credit cards. Interest rates on larger loan amounts (generally £7,000 and above) tend to be the most competitive.	Right now Alliance & Leicester is offering a market-leading personal loan rate of 7.9% APR on loans of £7,500 to £15,000.

Remember, no two borrowers are likely to have identical requirements – so think carefully and research a range of deals before signing on the dotted line.

You can read more about both 0% purchases credit cards and personal loans here on BeatThatQuote.com.

Six crucial things house movers must do

Mon, 22 Jun 2009 18:08:45 GMT

By Laura Starkey

Moving house can be an absolute nightmare! But before you start stressing over where to store the china, make sure you’ve sorted the serious stuff first.

Moving home is said to be right up there with debt, divorce and death as one of life’s most stressful events.

Personally, I think that’s a tad melodramatic – but I do whole heartedly agree that moving house can be a chaotic experience.

It’s easy to get so wrapped up in the pandemonium of packing that you forget to address important issues like insurance.

In this article, I’ll explain six crucial steps house movers should follow to ensure they’re prepared for life in their new home.

1. Protect your property

The only way you’ll be able to really relax in your new home is if you know your property and personal belongings are protected.

Therefore, when you move house, it’s vital you insure your property from the day the contracts are exchanged.

There are two types of home insurance available: buildings insurance and contents insurance.

Buildings insurance covers the cost of damage to the structure of your property. On the other hand, contents insurance covers everything inside the house.

It’s crucial to calculate accurately how much your belongings are worth before buying contents insurance. If you’re underinsured you may not be fully covered if you need to make a claim, whereas, if you overinsure yourself you could end up paying unnecessarily high premiums.

Whichever type of insurance you’re looking for, it’s always worth taking the time to shop around online for the best deal.

It’s also a good idea to check that any removals firm you use is adequately insured so that your property is fully protected while in transit!

2. Ensure your home is secure

All home insurance policy prices are based on risk assessment. Therefore, improving your home’s security could help cut the cost of your premium.

Here are my six top security tips:

Join a neighbourhood watch scheme.
Install a burglar alarm or security system recognised by your insurer.
Fit security lighting.
Replace old locks on your doors with five-lever mortise locks.
Fit key-operated window locks.
Check there are no holes in your fences.

Be aware that following some of these tips could cost you money in the short term. It may take a few years of reduced home insurance premiums for you to recoup your initial spend.

However, in the meantime you’ll have the peace of mind knowing your property is secure.

3. Switch to save

Before you move home, inform your energy supplier you’re leaving. This should ensure you’re not billed for energy used by the new occupants after you have left.

Then, once you’re in your new property, notify the existing energy provider and inform them of the current meter reading. Again, this will prevent you having to pay for energy you have not used.

When you call to request that future bills to the property are sent in your name, it’s likely you’ll be put on your energy provider’s standard tariff. These plans are often expensive, as energy companies usually reserve their best deals for new customers.

Therefore, it’s is a good idea to run an energy price comparison as soon as possible to find out how much you could save by switching suppliers.

Remember, the longer it takes you to get your skates on and organise a switch, the longer you’ll be stuck with an expensive standard tariff. It could take between four and six weeks for your new plan to come into effect, so it’s important you don’t delay.

4. Cover your car

The price of your car insurance will be affected by where you live. For this reason, moving home could make a difference to how much your premiums cost.

When you move, you must contact your car insurer and inform them of your new address. If you don’t, your policy could become invalid and your insurer may refuse to pay out in the event you have an accident – leaving you to foot the bill.

The price of your premium may go up or down, depending on where your new property is. However, it’s always best to be honest with your insurer as soon as your circumstances change to avoid trouble later down the line.

5. How to pay for your paint

According to recent research by Halifax, people spend an average of £8,100 on home improvements (not including adding space) during the first two years of living in their house.

If you know your house needs a lot of work, it’s important you consider how you’re going to finance it.

A 0% purchases card will allow you to spread the cost of an expensive purchase over a set period of time without charging you interest for the privilege.

However, 0% purchases deals are only introductory. This means that if you don’t repay your balance in full before the offer expires, you’ll be hit by hefty interest charges.

If this might affect you – perhaps because you’ll be spending a significant sum – you may want to consider opting for a market leading personal loan instead.

6. Protect your life

If you own a home with a friend or partner and you move house, you need to make sure your life insurance policy covers your share of the new joint mortgage.

If you’ve moved into a bigger or more expensive home, it's likely you will need to up your level of cover. Remember, it's important to have adequate life insurance in place; otherwise, if you pass away, your housemate or partner could be pursued for your whole joint mortgage debt.

Alternatively, if you’ve downsized your property, you might not need quite as much life cover and therefore could save money on your premium by comparing deals.

Moving home may have coincided with an upturn in your lifestyle, which is another reason to reconsider your life insurance needs. You need to make sure any dependents you have will be able to maintain this new standard of living in the event you're no longer around.

5 top tips for festival fun

Wed, 17 Jun 2009 13:33:44 GMT

By Victoria Bischoff

If you're planning to rock out at a festival this summer, it's crucial to check your belongings are properly protected. Here's how music maniacs can enjoy the inevitable mudbath – without getting into any sticky situations…

Festivals are the perfect place to indulge your inner hippie, whack on a pair of wellies and frolic to your favourite tunes in a field of mud.

However, they are also a haven for opportunist thieves waiting to take advantage of unmanned tents and relaxed attitudes.

What's more, the very nature of a festival increases the likelihood you may accidentally lose or damage your belongings.

Therefore, if you're one of the 180,000 music revellers heading to Glastonbury next week, it's vital you ensure your personal property is protected.

Ensure you're insured

When you're packing your bags for a fun outdoor music festival, insurance is probably the last thing on your mind.

However, before you head for the fields it's crucial to first check what cover you have in place.

Last year, research by Zurich revealed that nearly 10% of festival-goers have had their possessions stolen while listening to their favourite bands.

Many home insurance policies offer protection for your personal possessions outside the confines of your home – but it's vital to check whether this is included and exactly what is, and is not, covered.

If this protection isn't already included in your home insurance policy, for a slightly higher premium you should be able to add additional cover that will insure your belongings when you take them out of the house.

However, it's important to remember that insurers usually impose some restrictions on this kind of protection. For example, if you leave your valuables in a tent without a lockable door any items that are stolen or damaged are unlikely to be covered.

You must, therefore, take every reasonable precaution you can to prevent the loss or theft of your property.

Also, there is also usually a limit to how much your insurer will pay out for belongings that have been taken outside your home.

Always check the terms and conditions of your policy carefully to ensure you have adequate protection and aren't left out of pocket.

Should I store my loot in my boot?

Many people who travel to festivals by car choose to store valuables in their vehicle as a safer alternative to tents.

However, many car insurance policies will not provide protection for everything you leave in your car.

If you've stashed a sat nav, mobile phone and designer sunglasses in your boot and your car is broken into, you could end up forking out hundreds of pounds to replace them.

And remember, making a claim on your car insurance policy means the price of your premium is likely to increase the following year – forcing you to pay for any silly mistakes you make several times over.

Therefore, before you hit the road, it's crucial you contact your car insurance provider to check your level of cover.

Never leave any belongings visible in your vehicle that could tempt opportunistic thieves looking for an easy steal.

Finally, if you're planning to share the drive to your chosen festival with a friend, make sure you have adequate car insurance in place before you let them behind the wheel of your vehicle.

If you don't and disaster strikes, your whole car insurance policy could be deemed invalid.

Five top tips for festival security

• Leave your valuables at home. As a general rule of thumb, only take with you what you can afford to lose. If you're going to be camping in a muddy field, don't take expensive clothing and jewellery because you won't need it! Instead, try to use older and well worn equipment so that if gets ruined in the rain – or goes missing – it won't matter as much.

• Guard your gear. Keep valuables such as your phone and wallet on you at all times. If you're carrying a bag, make sure it is kept properly closed and wear it across your chest to reduce the risk it can be dropped, lost or stolen. It's also a good idea to mark your belongings, perhaps with a UV pen. This way, if they are handed in they will be easy to identify.

• Padlock your tent. Padlocking your tent and baggage can act as a deterrent to opportunist thieves. However, bear in mind that it could also make it look like you have something worth stealing. If you're really worried about securing expensive items such as your digital camera, it's well worth shelling out a few pounds to put them in a locker.

• Manage your money. Before you leave home for your festival, clear your wallet of anything you won't need. Only take enough money to last for the duration of the festival and try not to carry around large amounts of cash. There are usually ATMs on festival sites – and although they usually charge you for withdrawals, it's probably worth paying a small fee to lower the risk of losing wads of cash in the crowd. Finally, make sure you write down and store the number of your debit and credit card providers somewhere safe. This way, if the worst happens, you'll easily be able to call and cancel them.

Five frugal Father's Day finds

Wed, 17 Jun 2009 13:20:52 GMT

By Victoria Bischoff

With Father's Day fast approaching, many of us will be frantically searching for the perfect gift for our pa. Luckily there's a whole host of bargains to be had on everything from groovy gadgets and electronics to fatherly fashion and fragrance…

This Sunday, many of us will want to treat good old dad to something special. But if you're like me and find dad difficult to buy for, you might be struggling to find the perfect gift at an affordable price.

Fortunately, with retailers offering fabulous Father's Day discounts on a range of great gifts, you can show dad you care without breaking the bank.

1. Gadgets and gizmos

If your dad's a boy who likes his toys, why not humour him with a geeky gadget or game?

Right now, you can get 10% off any purchase from Gadget Pages up until 30 June. All you have to do is enter the offer code Father, at the checkout.

Burton is also offering a great selection of reasonably priced gadgety gifts. My favourite is the 'Host your own 70's quiz night' game.

And if you haven't got time to hit the shops this week, Graham and Green is offering free standard delivery on all Father's Day gifts until 21 June. Just quote the code M9DAD at the checkout.

2. Bargain books

If dad always has his nose in a good book, take advantage of these bargainous prices and treat him to a new bestseller.

Waterstones is currently offering half price books for Father's Day. If your dad likes his thrillers, you could grab him a copy of the latest title from James Patterson or Wilbur Smith.

You can also find 50% off books on subjects ranging from sports to history at Amazon And for media mad dads, Amazon is also offering a wide selection of discounts on DVDs and CDs.

3. Fatherly fashion

If your dad's a bit stylish and knows his Boss from his Gucci (or simply knows not to wear socks with sandals), he might love something new for his wardrobe.

Right now at Debenhams, you can get 50% off selected men's clothing and accessories.

House of Fraser is currently in sale season, too, offering a whole host of discounts on suits, shoes, swimwear and more! You could also check out the 'Dads Rule' section on their website for other fab gift ideas. If you spend over £50, you'll get free delivery!

Meanwhile, if you shop at TM Lewin you can save up to 75% on shirts and up to 65% on suits. If you spend over £100 you'll get £15 off when you enter the voucher code 15BAK at the online checkout. Alternatively, for orders over £50, you'll receive free delivery if you enter the voucher code FDL50. Both of these offers are valid until 20 June.

Finally, Tie Warehouse is currently offering 10% off all orders until Father's Day if you type in the code FATH09 at the checkout.

4. Dad's day out

Just this once, why not tell dad to leave his wallet at home and take him out for the day?

There are loads of places you could take your pa for free on Father's Day. Attractions such as London Zoo, Drayton Manor and Brighton Pavilion all plan to let fathers have fun at no extra cost on Sunday - providing his full-paying family accompanies him.

Check out Lastminute.com for details. There are also heaps of other discounts available on everything from theatre tickets to vineyard tours and golf experiences!

Finally, if dad is a bit on the wild side why not investigate Red Letter Days? There should be something suitable for everyone and every budget - and, you can save 10% on all orders when you use the voucher code MYVOUCHER at the online checkout. This offer is valid until 7 July.

5. Get him some grub

They say the way to a man's heart is through his stomach, so go on - treat dad to a dinner out or buy him a delicious box of chocs.

This Saturday and Sunday, Caffe Uno are treating the whole family to a free delicious desert. To redeem this offer, just click here.

Or if dad fancies something slightly more exotic, you can get 50% off tapas at La Tasca every Sunday to Thursday until 30 June. To get this voucher, just register on La Tasca's website or if you're already a member, sign in and print it from 'My Special Offers'.

If dad has a sweet tooth, Thorntons have 'I love dad' chocolate cups for just £2.99 or edible gold medallions for only £3.49.

And if daddy enjoys the odd boozy night, you can currently get £25 off at Naked wines if you use this voucher code.

It's the thought that counts

However, don't forget you don't need to spend a fortune this Father's Day to show you care.

In these troubled times, we're all trying to pinch a penny or two - and I'm sure no dad would want to see his children go into debt to buy gifts for him.

If you're strapped for cash, you could make your dad a fantastic card and cook him dinner at home. Sharing some quality time together will probably be more than enough to make dad happy.

After all, at the end of the day, it's the thought that counts.

Let's hear it for the dads!

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

Fixed price energy customers: what to do next

Wed, 17 Jun 2009 12:50:03 GMT

By Victoria Bischoff

If you managed to fix your energy tariff last year, you'll have avoided the price hikes that hit other households. But with many fixed price energy plans set to end this summer, you may be wondering what to do next…

The heat was on last June as millions of people flocked to fix their energy costs.

In a bid to escape soaring prices, many customers locked in to attractive fixed rate tariffs before the price hikes predicted by experts could take hold.

Unfortunately, many of these affordable energy deals - which protected many people from energy rate rises - are now coming to an end.

If this applies to you, it's vital that you review your energy costs. Otherwise, you could face a serious payment shock this summer…

The story so far

After a round of energy price cuts this winter, it's possible some people have forgotten their fury over last year's incredible price rises.

However, cast your mind back and you may remember that the cost of the average household's energy shot up by roughly 40% in 2008!

As a result, five and a half million homes in England were pushed into fuel poverty* according to Consumer Focus - a five fold rise over just five years.

Sadly, the energy price cuts announced earlier this year have done very little to cancel out the impact of last year's steep rises.

Big bills

If you didn't lock into a fixed rate energy deal last summer, you'll probably have been feeling the pinch of inflated energy bills for a year now. This will ring especially true for those who have never switched suppliers or haven't done so recently.

In fact, if you've never changed your energy provider, you could save up to a whopping £391 by switching now.

Unfortunately, even those who did manage to secure an affordable deal last year now look likely to be hit with bigger bills. That's because when time is up for fixed price tariffs, most energy providers will shift their customers onto far more costly 'standard' plans.

Scary stats

In July 2008, the average fixed price plan cost £1,046 per year according to statistics from Energylinx.

Today, though, the average standard plan works out at a significantly pricier £1,243 a year for households who don't pay their bills by direct debit. That's a difference of £197.

This means households used to paying for fixed rate energy could face an increase to their annual energy bills of almost £200!

However, Energylinx data shows that, right now the cheapest online energy plan, British Gas's Websaver 3, costs £1,018 a year. Not only is this £225 cheaper than the average pay-per-bill standard plan - it's actually £28 cheaper than last summer's average fixed price deal!

Here's a quick guide to the cheapest deals on the market right now:

Supplier	Tariff	Average Annual Bill
British Gas	Websaver 3	£1,018
E.ON	Energy Online Extra Saver 14	£1,040
Npower	Sign Online 15	£1,063
Scottish Power	Energy Online Saver	£1,064
SSE	Domestic Standard Online	£1,075
EDF	Online S@ver 1	£1,090

*All calculated using average annual consumption 20,500 kWh for Gas, 3,300 for Electricity and payment by Monthly Direct Debit.

Steps for saving

To ensure you aren't caught out by higher energy costs, it's important to shop around for a new deal as soon as your existing fix expires.

Following these four simple steps could help save you a significant sum.

Step 1. Run an online comparison

Using an online comparison tool is one of the easiest and quickest ways to compare energy prices from a range of suppliers.

You'll need to supply the system with your postcode and details of what you're currently paying for your energy. This will allow it to calculate how much you could save by switching and inform you which tariff is the cheapest one for you.

Remember to check when your fixed deal ends before committing to a switch, however; if you try to exit your energy plan too soon, you could be hit with a penalty charge.

Step 2. Go for dual fuel

If it's possible for you, opt for a 'dual fuel' plan (where you buy your gas and electricity from the same provider).

Dual fuel plans often make energy cheaper than it would be if you purchased your gas and electricity separately. What's more, it's likely to be more convenient; you'll only have to contact one provider if you have any queries about your energy billing or usage.

Step 3. Pay by direct debit

It's often cheaper to pay your energy bills by direct debit. Many suppliers will offer you a discount in return for the security of knowing how and when you'll pay them.

According to Energylinx, paying by direct debit could shave £97 off the annual cost of a standard dual fuel plan.

Step 4. Go online

It's often the case that the cheapest energy tariff available is for online customers only. If you opt for an online plan, it's possible you'll have to supply your energy provider with online meter readings and manage your account via the worldwide web.

If you are happy to do this, it's a bonus for suppliers; it means there is less administration and less cost involved in billing customers.

As a result, some of the money they save can be passed on to you and me!

Should I fix now?

Right now, some industry insiders believe energy prices could come down further in 2009. On this basis, it's easy to argue that choosing a fixed price energy plan makes little sense right now.

However, in an uncertain economic climate, there is no way to guarantee what will happen.

What's more, oil prices have recently started to rise again. This suggests that, in the long term, energy prices will once again go up.

If you prefer the security of knowing how much your energy will cost you each month, locking into a fixed rate energy deal might be right answer for you.

While opting for a fixed price deal means you probably won't pay the lowest possible price for your gas and electricity right now, some people are prepared to pay a slight premium for peace of mind.

If you are tempted to fix, be aware that most capped plans now carry an exit fee.

If your plan comes with this kind of charge, you'll have to pay for the privilege of leaving your supplier before your fixed deal finishes.

Therefore, it's crucial you check the small print carefully before you sign on the dotted line. Also, if you're planning to move house in the near future, make sure any fixed energy tariff you pick is portable.

Above all, no matter what kind of energy deal you choose, make sure you always do your homework first. Remember: regularly reviewing your tariff is the only way to ensure you remain on a competitive deal and pay the cheapest possible price for your energy.

If you're worried or unsure about how switching works, you can read our simple guide and frequently asked questions to find out more about getting a better deal on energy.

* According to Consumer Focus, a household is in fuel poverty if more than 10% of its annual earnings are spent on energy.

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

This credit card could clear your overdraft

Mon, 15 Jun 2009 15:19:11 GMT

By Laura Starkey

If your bank account is often overdrawn, it’s likely you’re paying a horribly high interest rate for the privilege. Luckily, this credit card could help you clear your overdraft for good - and at 0% interest…

If you sometimes find yourself drifting into the red towards the end of the month, you’re not alone.

However, since the onset of the credit crunch, it’s been especially expensive to live too long in your overdraft.

According to Moneyfacts, the financial product information site, the interest rates on many authorised overdrafts soared during the year to November 2008 - and some increased by more than 7%!

Many now charge 15-20% EAR on negative bank balances. That means a long-standing overdraft of £1,500 could cost you around as £275 a year!

Fortunately, one of my favourite credit cards - the Virgin credit card - could help you deal with this expensive form of debt.

A better way to pay
While you might know how useful 0% deals can be for slashing the cost of credit card debts, did you know a select few can also be used to wipe out overdraft interest charges?

Some, including the Virgin credit card, allow money transfers as well as balance transfers as part of their 0% promotions.

This means you can use the card to pay off outstanding overdrafts and loans as well as existing credit card borrowing. Whatever kind of debt you transfer to the card, you’ll enjoy a 16 month break from interest payments.

How it works
It’s really pretty simple. Once you have the Virgin credit card, all you have to do is arrange for the sum you owe your bank to be transferred from your credit card to your current account.

You must do this within 60 days of opening your credit card account, and it’s worth being aware you will only be able to use a proportion of the total credit limit you’re allocated for balance transfers and money transfers.

In addition, don’t forget that, as with an ordinary balance transfer, you’ll be required to pay a fee for shifting money from one place to another. The Virgin credit card charges 2.98% on balance transfers and a slightly steeper 4% on money transfers.

This means it would cost you £60 to pay off a £1,500 overdraft using this card - though I think that’s a small price to pay for a 16 month interest break.

Also, don’t forget that despite paying this money transfer fee, a person who cleared £1,500 sum from an overdraft charging 20% EAR would still save £306 during the 16 month interest-free period on offer from Virgin.

It’s not all about the interest
The 16 month rest from interest charges on offer from Virgin should help prevent your overdraft from growing - but, by itself, it won’t shrink the amount you owe.

If you want to clear your overdraft completely, you’ll need to set yourself a repayment plan that will ensure your money transfer is paid off. Ideally, you should aim to ditch your debt within your credit card’s 0% promotional period.

If you don’t, you’ll probably be charged a high rate of interest on any debt that remains after your 0% deal expires. At the moment, Virgin charges 20.6% APR on standard money transfer balances - that’s 4% more than the typical rate it charges on purchases.

What’s more, it’s a similar rate to that which a number of banks charge customers for overdrafts. This means that, in a worst case scenario, someone who didn’t use their 0% period to pay down their debt could end up back at square one.

Things to remember
Firstly, it’s important to remember that not everyone will be accepted for a 0% credit card.

Since the onset of the credit crunch, these market leading deals have been more difficult to get - particularly for those without a spotless credit rating. Therefore, it’s a good idea to check yours out before you apply.

If you discover there are blemishes on your borrowing past, you may want to think twice about trying to get a 0% deal. Don’t forget that every application for credit will leave a ‘footprint’ on your file, and too many of these will harm the chances of your being able to borrow elsewhere.

In addition, not all 0% credit cards allow customers to make interest free money transfers. It’s crucial to check the terms and conditions of the card you’re interested in before applying for it if you’re planning to use it for this purpose.

Also, those who already have credit cards from providers within the MBNA group should be aware they’re unlikely to be accepted for the Virgin credit card.

The good news is there are other ways to overcome your overdraft. For example, by switching your current account you could get an interest free overdraft for up to 12 months. Both the Abbey Account and Alliance & Leicester’s Premier Direct Account offer 0% typical overdrafts for a year.

Finally, don’t forget that if you want to get out of your overdraft forever, you need to consider the reasons why you went into the red in the first place. This means making sure you know how much money you have coming in and going out every month, and sticking to a budget that will prevent you drifting back into debt.

Ultimately, keeping control of your finances is the most important step of all if you want to rid yourself of your overdraft for good.

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

Redundancy: Your questions answered

Fri, 12 Jun 2009 10:05:09 GMT

By Victoria Bischoff

In these uncertain times, many of us are worried about rising unemployment and our job security. Victoria Bischoff answers seven key questions about what to do if you're made redundant.

Nearly all of us have been affected in some way by the recession, and many of us will know someone who has lost their job as a result.

According to the Office for National Statistics (ONS), the redundancies level for the first three months of 2009 was at its highest since records began in 1995.

Figures from the Citizens Advice Bureaux show that there has been a 114% increase in the number of people contacting the charity with redundancy concerns and a 61% rise in people seeking information about Jobseeker's Allowance.

For many people, being made redundant is not only a devastating experience but also a huge financial blow. If you suddenly lose your source of income, you may not be able to meet mortgage repayments, pay your bills or continue to support your lifestyle.

1. So, what exactly is redundancy?

If you're made redundant, it's important to remember that you haven't been sacked. Redundancy occurs when your employer needs to reduce staff levels - not because you're under performing at work.

In the current economic climate, redundancies will most likely stem from a company's need to cut costs.

However, you may also be ‘let go' if your job is no longer necessary as a result of new technology, the job you were hired for no longer exists or the business you work for is closing down.

2. What are my rights?

Employees are protected from being fired or being made redundant unfairly under the Employment Act 1996.

It's up to your employer which reasons they use to select individuals for redundancy, but they must be able to prove they are fair.

If you're made redundant, you must be given a statutory notice period. This is one week if you've been employed between one month and two years.

Thereafter, you should receive one week's notice for every year you've worked with the company, up to a maximum of 12 weeks.

Employers must also consult with individuals to explain why they have been selected and discuss possible alternatives to redundancy.

If your employer is making more than 20 people redundant within a 90 day period, it should consult with any recognised trade union who will negotiate a redundancy package on your behalf.

3. Will I get a payout?

If you've worked for your employer for at least two years, you're entitled to a redundancy payout. The amount you'll get will be based on your weekly pay, age and continuous employment with your employer.

The statutory legal minimum is:

• Half a week's pay for every continuous year of service under the age of 22.
• One week's pay for every year between the ages of 22 and 41.
• One and a half weeks' pay for each year after the age of 41.

However, regardless of how much you earned when employed, a maximum of £350 for each week you worked will be taken into account when your redundancy payout is calculated. You won't be taxed on the first £30,000 of your redundancy pay.

If you're employer has been declared insolvent, you can apply for a payment from the National Insurance Fund.

Don't forget to ensure you are also paid for any unused holiday, outstanding expenses and employee benefits.

4. What benefits am I entitled to?

If you're made redundant, you're entitled to state support.

You should be able to claim contributions-based jobseeker's allowance if you're actively seeking work and have paid Class 1 National Insurance (NI) contributions.

However, the weekly rate is a meagre £64.30 if you're over 25 and just £50.95 if you're between 16 and 25.

If you've not paid enough NI, you've only made self employment contributions or are on a low income, you might be able to claim income-based jobseeker's allowance.

You may also be able to claim housing benefit, council tax reduction and child tax credits.

State benefits are complicated and not everyone is entitled to the same payments, so it's a good idea to check what you can claim. The Jobcentre Plus website should prove useful.

5. What happens if I can't meet my debt repayments?

Since January 2009, there has been more assistance available for homeowners receiving benefits to help them pay their mortgages.

If you're receiving an income-related support allowance, you should now be entitled to support on your mortgage interest payments after just 13 weeks – down from the previous limit of 39 weeks!

Also, check if you're eligible for Homeowners Mortgage Support (HMS). Under this scheme, you may be able to delay some of your mortgage interest repayments for up to two years.

Finally, remember to check whether you're entitled to a pay out under any existing insurance policies you may have, such as income protection insurance (IPI) or payment protection insurance (PPI).

6. What should I do next?

Your first step should be to decide your next career move. If you were unhappy in your previous line of work, maybe now is the time to embark on a career change.

Make sure you update your CV and polish up your skills. You might find it beneficial to sign up for a training course or two.

When you begin job hunting, remember that Job Centre Plus and some private recruitment agencies can be incredibly helpful. They can line up interviews and bridge the gap between you and the employer.

7. Who can I go to for advice?

If you feel you've been unfairly treated, your first step should be to get in touch with your trade union and speak to your employer.

If this doesn't work, you may have to take your case to an Employment Tribunal.

For free, confidential and impartial advice, you can contact the Advisory, Conciliation and Arbitration Service (Acas) or Citizens Advice. For more information on redundancy and your rights, check out the DirectGov website.

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

Five financial tips for newlyweds

Thu, 11 Jun 2009 13:00:44 GMT

By Victoria Bischoff

In the aftermath of your big day, finance may be the furthest thing from your thoughts. However, becoming Mr & Mrs has implications beyond the honeymoon period, as Victoria Bischoff explains…

Ah to be a newlywed! Well, at least until the bells have stopped ringing, the honeymoon is over and the wedding bills are in the post.

If you're still clinging on to the last remnants of romance despite the arrival of your Visa statement, discussing home insurance, household bills and wills should be enough to really kill it dead.

Yet while money might not be the most sparkling of conversation topics for just-married couples, financial planning is crucial if you're to live happily ever after.

Here are five top tips that could help happy couples avoid budget breakdown in the future.

1. Protect your presents

Wedding gifts can easily add thousands of pounds to the total value of your home contents.

According to recent research by Direct Line, the average wedding guest spends roughly £79 on a wedding gift. This means that if 100 people attend your wedding, your gifts could be worth a whopping £7,900!

The study also states couples typically spend £4,000 on items such as wedding outfits, flowers and rings in preparation for the big day.

Therefore, it's crucial you check that all your expensive new belongings are covered by your home insurance policy in the event of loss, damage or theft.

If you don't and something goes wrong, you could end up with a serious financial headache on top of the distress of losing your wonderful wedding memories.

2. A couple of cars

If you and your partner are planning to drive each another's cars now you're married, you must make sure you have adequate car insurance in place.

If you have a fire, theft and third party insurance policy, your partner will probably need to be added to your insurance as an additional driver.

If you have fully comprehensive cover, second drivers may already be included as part of your policy. However, you must always check before handing over your keys; if you don't have adequate cover and your car is damaged while another person's at the wheel, your insurer will probably refuse to pay out.

On a happier note, adding your other half to your insurance policy could help to reduce the price of your premium. This is more likely if your partner is the same age or older than you and has a clean driving licence.

Some insurers may view married drivers as lower risk customers, considering them less likely to be involved in accidents than single motorists. Therefore, make sure you inform your insurance company when you get married; depending on your individual circumstances, it may bring down the price of your policy.

3. Married money management

Money can often be a touchy topic.

However, it's important for you and your spouse to understand each other's spending habits at the beginning of your life together if you're to avoid nasty surprises later down the line.

It's important to talk to your partner about how you want to handle your finances, and discuss what financial goals you have for the future.

If you discover one of you is a frugal spender while the other is a financial free spirit, it's important to work together to create a household budget.

Create a spreadsheet and calculate how much money you have coming in and going out of your accounts each month.

Once you've established exactly where your money goes, you'll be able to decide together how you want to spend any spare cash.

4. What's mine is yours

Once you've talked about your spending habits, you'll be in a better position to tackle the thornier issue of joint accounts.

If you do decide to share financial products, you must trust each other one hundred per cent.

Being financially associated with your partner means that if your other half runs into money trouble or already has a blemished credit history, your credit rating could be tainted as a result. Financial associations are made when two people have their name on the same financial product (for example, a loan, mortgage or current account).

Therefore, before you set up a joint account of any kind, it's a good idea for you both to check your credit histories.

If you take out a joint loan of any kind, you also need to check where you stand in terms of liability. Under the terms of most agreements, you and your partner will be jointly and severally liable.

This means that if one of you is unable to meet their share of the repayments, the other could be pursued for the entire debt.

However, credit cards are a different kettle of fish. Credit agreements for credit cards are always taken out in a single individual's name – so even if you add an additional cardholder to your account, it will always be you who's ultimately responsible for footing the bill.

5. Prepare for the worst

Life insurance is certainly not the most romantic of topics.

However, entering into a lifelong partnership and entwining your finances can seriously affect the level of life insurance you need.

If you have a joint mortgage or additional, non-mortgage debts, it's crucial you have enough protection in place to cover your share of the repayments in the event of your death.

If you pool your income, you must also ensure your life insurance will pay out a large enough sum to cover your half of the household bills.

If you don't, your partner (and any children you have) could end up in serious difficulty should you pass away.

Finally, when you're married, it is wise to draw up or update your will. If you die without one, the law will dictate how your assets will be distributed – and this can be a lengthy process.

If you're married, the first person entitled to a share of your estate is usually your spouse. However, inheritance law is incredibly complicated and it's not guaranteed they would receive everything you left behind. Establishing a will is therefore the only way for you to be sure that, when you die, your wealth will go to the person (or people) you choose.

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

Five tips for motoring abroad

Thu, 11 Jun 2009 12:43:45 GMT

By Victoria Bischoff

If you're planning a road trip overseas this summer, here are five top tips that will help you steer clear of trouble.

Taking your car on holiday can be wonderfully liberating. You simply chuck your bags in the boot, jump behind the wheel and away you go.

According to the Association of British Insurers, over two million British motorists head overseas in their cars each year.

But whether you're making a day trip across the channel or motoring across the continent, it's crucial you prepare carefully for your trip.

Figures from the breakdown cover provider Green Flag show that, between June and August, the company receives approximately 20,000 calls from UK motorists stranded in Europe!

Therefore, before you head out onto the open road, make sure you follow these five travel tips.

1. Prepare your vehicle

Breaking down abroad could put a serious dampener on your holiday. Therefore, before you hit the road, make sure your car is in the best possible condition.

You should inspect the pressure and tread of all the tyres – including the spare.

Then, check your car's fluid levels to make sure you have adequate lubrication for your brakes, power steering and windscreen washer. It's also important to ensure all the lights are working and you've packed spare bulbs for your trip.

If you're not confident making these checks yourself, ask a friend or family member for help.

If you're still unsure, you can always book your car into a garage to be inspected by a mechanic. Remember, it's better to be safe than sorry.

2. Pack for every eventuality

No matter how prepared you are, it's always possible that something unexpected – and difficult to deal with – will happen while you're away.

Therefore, it's important to plan your trip in advance and think about what you might need should something go wrong.

Here are eight small steps that could help make life easier in the event of problems abroad:

• Make sure your mobile phone is fully charged.
• Ensure your first aid box is stocked and keep a supply of bottled water and snacks in your vehicle.
• Keep a blanket and flashlight in your car.
• Have spare change to hand ready for motorway tolls.
• Pack a spare set of car keys in your luggage.
• Bring a spare pair of specs if you need glasses to drive.
• Keep a map to hand.
• Bring a book of useful phrases if you don't speak the native language of the country you'll be visiting.

While it's crucial you pack the essentials, you must also ensure you don't overload your car. Remember, the more your vehicle weighs the more fuel it will eat up.

Also, if you're using a roof rack to carry luggage, make sure you safely secure all the items on it.

3. Learn the law

We all know that in many continental countries you drive on the wrong (well, in fact on the right!) side of the road. But did you know it's illegal to honk your horn within the city limits of Gibraltar?

Road traffic regulations can vary widely from country to country, so it's crucial you get clued up on the local laws of every place you plan to drive through.

Know your limits: Many European countries have stricter laws on drink driving than we do in the UK, and the legal alcohol limit for driving is often be much lower. Be careful not to break local rules, or you could end up in serious trouble.

In addition, ensure you don't get carried away when driving at higher speed limits on continental motorways.

In case of a break down: In some countries it's compulsory for motorists to carry reflective jackets and warning triangles in case their cars break down. Know before you go!

Carry the correct documents: While driving abroad you may need your full driving license, an international driving permit, your vehicle's registration document and insurance details. Furthermore, in most countries it's compulsory to display a Great Britain (GB) sticker or a Euro-plate with the GB euro-symbol.

To find out more about local laws, check out the AA's useful country-by-country guide, (http://www.theaa.com/motoring_advice/overseas/countrybycountry.html) which details specific national requirements.

4. Cover your car abroad

Many people assume they will enjoy the same level of car insurance overseas as they do in the UK

However, while EU law states all car insurance providers must grant policyholders a minimum of third-party cover when driving abroad, many insurers don't grant customers the level of comprehensive cover their policy might offer in the UK.

This means that while you'll be protected if you cause damage to another vehicle or driver in an accident, your insurer may not pay out if your own car is damaged or stolen overseas.

Before you head off on your holiday, it's vital that you contact your car insurance provider and check you have sufficient cover when travelling abroad. Always check the amount of days you are covered for as this is likely to vary from policy to policy.

In addition, remember that if you have a vehicle breakdown policy, this is unlikely to cover you outside of the UK unless it specifically includes continental cover. Therefore, if you want it, you may need to buy European breakdown cover separately.

5. Ensure you're insured

Finally, it's crucial that you have adequate travel insurance in place to protect you if something goes wrong on your holiday.

If you don't have travel insurance and you have an accident while driving abroad, even the most minor injury could end up costing you a small fortune in medical bills.

A good travel insurance policy should also provide you with cover in case you lose your luggage or are the victim of crime while on holiday.

Remember, shopping around online for the most competitive travel insurance deal will help you bag the right policy at the right price.

Also, don't forget that many travel insurers now require you to carry a European Health Insurance Card (EHIC).

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

How to make the most of your holiday money

Thu, 11 Jun 2009 12:28:11 GMT

By Laura Starkey

Getting a bad deal on currency or using the wrong plastic abroad could mean you get far less for your hard-earned holiday cash. Here's how to maximise your money overseas, however you plan to spend!

Cash

Wherever you're going, it makes sense to have at least some local currency in cash.

However, when it comes to exchanging currency, it's important to be aware that the commission you're charged and the exchange rate on offer affect how much foreign cash you'll get for your pounds.

Companies that change money ‘commission free' don't always offer the best exchange rates - so although this claim sounds good, it doesn't guarantee you'll get a good deal overall.

Top tips for cash users:
• If you want to make sure you get the maximum number of dollars, euros or yen to each pound you swap, it's crucial to compare currency providers. The key question to ask is exactly how many units of foreign currency you'll get for changing a lump sum in sterling.
• Exchange your currency in advance of jetting off. Leaving it until the last minute or, even worse, changing money at the airport, will probably mean you get a poor deal.
• Consider ordering your currency online. Often, companies offer better exchange terms to online customers than in high street bureaux de change, and you can choose to have your foreign cash delivered straight to your door.
• Ensure you have travel insurance in place so you'll be protected in the event your wallet or handbag is stolen. If you don't and you're the victim of crime abroad, you'll simply have to kiss goodbye to any money and valuables you lose.

Travellers' cheques

While many holiday makers now choose to spend using cash or plastic cards overseas, some still use travellers' cheques.

Travellers' cheques are often cheap or commission-free to buy, but are only available in a limited number of major currencies (including US dollars, pounds sterling and yen). Once you reach your destination, travellers' cheques can be spent with retailers or cashed at banks and bureaux de change.

Fans of travellers' cheques point out that they offer holidaymakers more security than cash. If your travellers' cheques are lost or stolen, they can usually be replaced within 24 hours.

However, the exchange rate you'll receive when buying travellers cheques is likely to be worse than the best rate you'd receive for buying cash. This means you'll probably get less foreign currency per pound you spend.

What's more, some foreign retailers seem less and less keen on travellers' cheques, preferring to accept payment by cash or card. This can make spending or cashing travellers' cheques inconvenient and time-consuming.

Top tips for cheque users:
• Only buy as many travellers' cheques as you think you'll need. Changing them back after your holiday may mean you lose money as ‘re-exchange' rates on them tend to be poor.
• If you do have travellers' cheques left over after your trip, you could consider saving them. They don't carry expiry dates.
• Consider where you'll cash your travellers' cheques in advance. Some exchange outlets abroad may charge you commission or handling fees, so watch out for these.
• Keep a note of the individual serial numbers on each of your travellers' cheques. This will make it easier for you to get them replaced, should you need to do so.

Credit cards

In a famous TV advert, credit cards were once referred to as our ‘flexible friends'.

If you use the wrong credit card for spending abroad, however, it's likely you'll be hit by several very unfriendly charges.

When you pay by credit card overseas, the exchange rate you get will depend on your card provider's daily ‘wholesale rate'. However, you'll probably have to pay an additional ‘load' of up to 2.75% which will mean you'll get less foreign currency per pound you spend.

Alternatively, if you withdraw cash from a hole in the wall using your credit card, you'll probably have to pay a fee of around 2.5%.

Even worse, if you use the wrong credit card to take money out of a cash point on holiday, it's likely you'll be charged interest on your withdrawal even if you repay it in full before the end of the month.

As cash withdrawals usually attract higher rates of interest than other credit card spending, this could see you paying upwards of 20% APR on any money you take out.

Tips for credit card users:
• If you know you'll want to use a credit card on holiday, apply in advance for one that doesn't come with all these nasty fees. The Post Office Platinum card won't charge you anything extra for overseas transactions, though you will still be charged 2.5% for cash withdrawals. The Abbey Zero card is also worth considering, and Saga's credit card is now the only one that doesn't charge for cash withdrawals abroad.
• Write down the telephone number of your credit card provider(s) and leave it in your hotel safe. This way, if your card is stolen or lost, you'll be able to call your provider and cancel it.

Debit cards
Many debit card providers will hit overseas users with very similar charges to those levied on credit card spending. It's likely you'll face a ‘load' and cash withdrawal charges if you use your debit card abroad.

In addition, some debit card providers charge a one off ‘transaction fee' of up to £1.50 each time you spend on your card.

If your bank is one of them, you'll have to pay this extra charge whenever you spend on your card or withdraw cash from an ATM.

Top tips for debit card users:
• Check whether your debt card will punish you for using it abroad. If so and you want to use a debit card overseas, it may be worth opening a FlexAccount current account with Nationwide. Its debit card charges no ‘load' on spending in Europe (though will impose a 1% fee for spending in other countries from 1 July 2009). It also allows fee-free cash withdrawals.
• Be aware that you won't get Section 75 protection when you pay for purchases by debit card. On the other hand, if you buy anything for £100 and £30,000 on your credit card, you'll be entitled to claim a refund from either the retailer or your credit card company if your goods are not received or ‘as described'.

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

Your money or your life: how to protect your pay packet

Tue, 09 Jun 2009 14:45:11 GMT
By Victoria Bischoff

If disaster strikes and you suddenly lose your income, protection insurance could provide you and your family with vital help. But how do you know which policy to pick? Victoria Bischoff explains…

Right now, job security is uncertain, unemployment figures are rising and the mere mention of redundancy is enough to send shivers down people's spines.

However, recession or no recession, illness, injury and even death are all risks we face every day.

For me, the importance of protection insurance only hit home last year when my next door neighbour fell down the stairs, broke her leg and ended up out of work for four months.

This got me thinking: if something happened to me tomorrow and I couldn't work, how would I support myself?

Scary stats

Most of us - myself included - probably walk around thinking ‘It will never happen to me.'

However, the sad reality is that thousands of people each year suffer misfortune which seriously affects their health, wealth and happiness.

According to the Office for National Statistics (ONS), redundancies shot up by a whopping 175,000 between March 2008 and March 2009. This means the redundancies level for the three months to March 2009 stood at a terrifying 286,000 - its highest level since records began in 1995.

Recent research from Friends Provident is equally thought provoking. It states that over 800,000 men die of cancer each year, 52,000 die from coronary heart disease and over 21,000 die as the result of a stroke.

Sadly, statistics from Cancer Research UK show that women are just as vulnerable to serious health risks. The NHS breast screening programme diagnoses around 10,000 cases of breast cancer each year in England alone.

Protection possibilities

Having the right insurance in place will help protect your family's finances should accident, sickness, death or unemployment befall you.

However, protection insurance comes in many different forms.

As a result, deciding what's right for you can quickly get confusing.

Here, I explain four options you might want to consider.

Payment protection insurance

What is it? Payment protection insurance (PPI) is designed cover your monthly loan or credit card repayments if you are unable to meet them because of an accident, illness or unemployment. This is why it's sometimes known as ASU insurance. Some PPI policies will also cover your mortgage repayments in the event you cannot make them. These policies may be referred to as MPPI (mortgage payment protection insurance).

Is it worth it? PPI policies often come with a long list of exclusions. If you're self-employed, retired or have an existing medical condition then you're unlikely to be covered.

PPI policies usually pay out for a set period of time - usually between 12 and 24 months. Therefore, if you take out PPI, you must consider what you'll do after your policy expires.

PPI only protects the portion of your income that you owe someone else. It will not pay out money for you to live on while you're unable to work.

The mis-selling of PPI has been all over the news in the past few months. Therefore, if you do decide you need PPI, it's important to shop around for an affordable deal.

Critical illness cover

What is it? Critical illness cover (CIC) is designed to pay out a tax-free lump sum in the event you're diagnosed with an illness or medical condition specifically covered by your policy.

Is it worth it? CIC will generally cover ‘core' conditions such as heart attacks, strokes, kidney failure and cancer.

However, all policies vary and certain exclusions are likely to apply.

For example, you may not be able to claim if your injury or illness is the result of a criminal act, is self-inflicted or if your condition does not severely affect your lifestyle.

One advantage of CIC is that there are no restrictions on how you can use any payout you receive.

However, a critical illness insurance policy will only pay out once, and will not replace a regular income.

Income protection insurance

What is it? Income protection insurance (IPI) will pay you a regular sum designed to replace your usual income if you're unable to work as a result of illness or injury. It's sometimes known as permanent health insurance (PHI).

Is it worth it? If you have to make a claim, IPI will pay you a proportion of your usual income for however long you're out of work.

This means that if you're never able to return to work, your policy should pay out until you reach retirement age. However, there is usually a maximum benefit that claimants can receive each month.

The level of cover on offer from any IPI policy will depend on how much you're willing and able to spend on your premiums.

For example, IPI policies come with ‘waiting periods' which require claimants to wait for a set period before their insurance will begin paying out. If you opt for a longer waiting period, you're likely to pay less for your premiums.

It's important to check whether your IPI policy will cover you if you're unable to do your own job or if you are unable to do any job. Some policies will only pay out if you are unable to work in any capacity - which may not provide enough cover for you.

Life insurance

Finally, even if you don't have protection insurance that will cover your income while you're alive, if you have a family and financial dependents you really should have a life insurance policy.

This will protect your pay packet - and your family's lifestyle - in the event of your death.

If you have a joint mortgage, additional non-mortgage debts or child care expenses, life insurance will ensure your family is not left in financial hardship should you pass away.

Even if you're a stay at home mum or dad, you should still consider insuring your life. The cost of paying someone else to cook, clean and care for your children could soon add up if you weren't there to do it for free.

Finally, remember: regardless of what type of protection you think you need, it is always a good idea to seek advice.

In addition, always read the terms and conditions of any insurance policy carefully before signing on the dotted line.

Beat the base rate: the savings accounts that pay 4% plus

Thu, 04 Jun 2009 12:21:32 GMT
By Victoria Bischoff

The Bank of England base rate has stabilised at its lowest ever level, but there's been a renewed burst of competition among fixed-rate savings providers. Victoria Bischoff reveals which accounts will help you make the most of your money over one, two or five years.

After a prolonged series of interest rate cuts, the base rate has dug its heels in hard, holding firm at 0.5% for the third consecutive month.

This comes as little surprise after the Bank of England governor, Mervyn King, hinted heavily last month that interest rates will continue to stay low for the rest of this year.

This renewed sense of stability has sparked increased confidence among savers. Many feel they have a better idea of where they'll stand on rates over the next year, and may now be more prepared to lock their money away.

As a result, there has been a surge of competition among fixed rate savings providers. But which bonds offer the best deals?

One year bonds
With the base rate at its lowest ebb in the Bank of England's history, the only way for it to go in the long term is up.

If you want to benefit from a competitive deal now but would also like the freedom to move your money should interest rates improve in the future, a one year fixed rate bond could be for you.

Here are my top three deals for singe-year savers.

Savings Account Interest rate (AER) Notes

ICICI HiSAVE One Year Fixed Rate Account 4% Minimum deposit of £1,000

Skipton BS Online Fixed Rate Bond Issue 2 3.87% Minimum deposit of £500

Bank of Cyprus UK Bond 3.7% Minimum deposit of £1

If you can afford to lock away £1,000 for the next twelve months, ICICI's bond - currently paying an impressive 4% - offers the most competitive rate on the market.

Not far behind in the rate race is Skipton BS, paying 3.87% on balances of at least £500.

If you have less than £500 to invest but still want to bag a decent one year deal, the Bank of Cyprus is offering 3.7% on deposits of as little as £1.

It is important to be aware that if you save with the Bank of Cyprus not all of your money will be protected under the UK's Financial Services Compensation Scheme (FSCS). The Central Bank of Cyprus Deposit Protection Scheme will cover 90% of deposits up to €20,000, while any sum above this up to £50,000 is guaranteed by the FSCS.

Conversely, although ICICI is the UK arm of an Indian bank, 100% of deposits up to £50,000 are covered by the FSCS.

Two year bonds
If you're willing to commit your money for a little longer, you may find a two year fixed rate bond offers a higher rate of return on your savings.

Here are my two favourite deals.

Savings Account Interest rate (AER) Notes

ICICI HiSAVE Two Year Fixed Rate Account 4.35% Minimum deposit of £1,000

Birmingham Midshires Internet Two Year Fixed Rate Bond 4.25% Minimum deposit of £1

Once again, ICICI comes up trumps. If you have £1,000 to squirrel away for two years, you could receive a return of 4.35%. That's nearly nine times the current base rate!

If you don't have a spare £1,000, Birmingham Midshires' two year fixed rate bond may be worth considering. It comes with a rate of 4.25% on savings starting from £1.

Five year bonds
If you're confident you won't need to get your hands on your cash in the next five years, you could invest for the long haul and go for a five year fixed rate bond.

Here are two of the market's top deals.

Savings Account Interest rate (AER) Notes

AA Telephone Fixed Rate Bond 4.5% Minimum deposit of £500

ICICI HiSAVE Five Year Fixed Rate Account 4.4% Minimum deposit of £1,000

Right now, both the AA and ICICI are offering appealing rates of 4.5% and 4.4% respectively.

However, it's worth noting that the top five year fixed rate is only marginally higher than that on offer from the best two year deal.

I think it's worth asking yourself whether earning an extra 0.15% by going for the AA bond (rather than ICICI's two year deal) is worth risking the possibility that rates will increase before your five years are up.

Fixed rate facts

1. Access to your cash will be limited.
Retrieving your pennies from a fixed rate piggy bank is no easy feat. Fixed rate deals lock in your funds for at least twelve months, so before you stash your cash think carefully about how much money you can realistically afford to invest.

If you take your money out before the lifetime of your bond expires, you are likely to face a penalty charge or lose a large chunk of the interest you've earned.

Therefore, if you suspect you may need to access your cash in the near future, you may be better off opting for an easy access savings account.

2. There are strict rules on how much cash you can deposit.
Many of the top paying fixed rate bonds require a large initial investment.

If you don't have a sizeable stash of spare cash, you could be limited in your choice of fixed rate deals.

Furthermore, many fixed savings accounts require you to deposit one lump sum and will not allow you to make any additional investments during the term of your deal.

3. Fixing your rate is always a gamble.
A fixed rate deal guarantees a specific rate of interest for a set period of time. While this protects your rate from suddenly plummeting, it also means the return you get on your savings can't increase.

Therefore, if the Bank of England does unexpectedly raise the base rate this year, your fixed-rate rainy day fund will not benefit from this.

** Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

Money mistakes I wish I hadn't made

Wed, 03 Jun 2009 16:57:58 GMT
By Laura Starkey

Everyone makes mistakes: the important thing is to learn from them. Unfortunately, the money mishaps of today could haunt your financial future for years – so why not learn from my budgeting blunders before you make your own?

When I first told my friends and family that I was going to become a personal finance journalist, most of them thought it was an elaborate joke.

It certainly seemed unlikely that I – a self-confessed shopaholic with no history of saving – should even be interested in money, let alone qualified to write about it.

In my youth I'd prioritised building up a sizeable shoe collection over balancing my budget, and my spending habits had got me into a few scary situations.

Now I'd like to share my most serious money slip-ups with you, in the hope you can learn from my mistakes.

1. I believed a 0% overdraft was ‘free money'
When I was a university student of 18, three ideas dominated my belief system. They were:

a) Student loans are not real debt;

b) A 0% overdraft is free money; and

c) Beer is best drunk mixed with cider and blackcurrant*.

About the first, I was almost right. Because student loans are charged at an interest rate equivalent to inflation, they don't cost students anything in ‘real' terms.

Sadly, my second core belief was total rubbish.

Like many students, I spent my way through around £2,000 of my bank's money – and it never occurred to me that, at some stage, they might quite like it back.

What's more, the thought that I would eventually be charged interest on my overdraft (which had largely been spent on booze, rather than books) didn't enter my head.

I was mortified when, after graduating, I had to start paying interest on my outstanding overdraft balance – and even more miffed that they expected me to repay the debt within 12 months!

Avoid this money mistake: Only enter your overdraft for spending on things you absolutely need, and ensure that you properly plan to repay whatever you have borrowed – even if your overdraft rate is currently set at 0%.

If you've already made it: See if you can grab a 0% overdraft deal, which will help you pay down your debt faster and save you money. The Alliance & Leicester Premier Direct Account typically comes with a 0% overdraft, fixed for 12 months.

2. I didn't budget properly
To keep control of your finances, it's crucial that you know how much money you have coming in and going out each month – and exactly what you're spending it on.

At one stage, I couldn't be sure about any of these things. As a result, I was constantly stressed and found my bank account ran dry far more frequently than I could replenish it.

This led me back into the arms of my dreaded overdraft – and onto unwise experimentation with credit cards.

Avoid this money mistake: Keep a spending diary for a few weeks to track where your cash is going. Then make cut-backs where necessary, make a plan for your monthly spending and stick to it!

If you've already made it: Make a budget that incorporates any debt repayments you need to make.

Next, plan to pay off your borrowing as quickly and cheaply as possible. A 0% balance transfer card could be a useful tool in the fight to ditch your debts for less.

3. I borrowed on expensive credit cards
When I first began to use a credit card, I'm ashamed to say I did so without thinking about how much I'd be charged for borrowing or how long it might take me to repay my debt.

The result? I paid hundreds of pounds in interest for the privilege of buying things that, quite frankly, I should have just saved up for.

Plastic can be fantastic if used wisely, but making mistakes with credit cards could cost your serious money and eventually cause real heartache.

Lucky for me, I managed to rein in my spending and learn these five important lessons about credit cards before it was too late.

Avoid this money mistake: If you must borrow, do so as cheaply as possible.

A 0% purchases card will allow you to spread the cost of spending at no charge, as long as you repay everything you owe within the 0% period on offer.

If you've already made it: Consider using a 0% balance transfer credit card such as the Virgin Credit Card to demolish the rate of interest you're paying on your debts.

If you have sizeable balances, a long term, low rate deal might be more suitable for you.

4. I started to save while still in debt
Saving is a great idea if you can afford to put some money aside each month.

The only time it makes less sense is when you're still tackling expensive debts. Sadly, this is another financial faux-pas I made in the years before I became a money journalist.

While I was paying upwards of 16% on credit card debts, I was faithfully squirreling away more than £100 a month into an ISA paying 4%.

I believed I was doing the right thing at the time – but it doesn't take a genius to work out that because I was paying out more in interest charges than I could ever hope to earn back on my savings, I wasn't making the most of my money.

In fact, by not throwing every spare penny I had at my credit card balance, I was prolonging the length of time I'd spend in debt – and how much that debt would cost me.

Avoid this money mistake: If you have debts, consider paying them off as quickly and cheaply as you can before starting to save.

If you've already made it: Sit down and work out how much better off you'd be each year if you used your savings to clear the debts you have.

I know from experience that it can be an emotional wrench to splurge your cash cushion on debt repayments, but it does make mathematical sense.

* This belief had significant repercussions, not all of them financial.

**Articles featured on BeatThatQuote.com are for information purposes only and reflect the views of individual writers. Articles are not, and should not be considered as, financial advice. BeatThatQuote.com strongly encourages our readers not to rely solely on information contained within our website, but to conduct their own research and seek independent advice about the financial products they purchase.**

Savings Account	Interest rate (AER)	Notes
ICICI HiSAVE One Year Fixed Rate Account	4%	Minimum deposit of £1,000
Skipton BS Online Fixed Rate Bond Issue 2	3.87%	Minimum deposit of £500
Bank of Cyprus UK Bond	3.7%	Minimum deposit of £1