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Stay out of the red and in the black
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Savers Sainted but Borrowers get Binned
Writes Dan Drage dan.drage@consumerchoices.co.uk
As the credit crunch continues to bite, banks are prepared to reward those who go back to black.
Banks are gearing themselves towards customers who stay in the black and maintain healthy savings accounts according to the money search engine Moneyfacts.
High street banks are jostling to make their current accounts more attractive in order to snare those who manage their money well.
Lloyds TSB (www.lloydstsb.com) has introduced a new 2% twelve month bonus on the interest paid on its Plus current accounts, taking the rate to 6% variable. The new rate applies to balances up to £2500.
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"Perennial borrowers are being punished by rising interest rates, disappearing introductory offers and narrowing markets."
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Similarly, Halifax (www.halifax.co.uk) has launched a best buy busting savings account which promises a 10% gross interest rate.
Perennial borrowers, on the other hand, are being punished by rising interest rates, disappearing introductory offers and narrowing markets.
Credit card companies have hiked the rates they charge customers when 0% balance transfer deals expire, by 0.75 percent since the start of the year.
Moneyfacts Head of Personal Finance Samantha Owens had the following to say:
“It appears that those who have the funds can benefit from better interest and better overdrafts, but are those who would benefit the most from these deals being excluded from the market.”
There are currently 180 interest free introductory balance transfer credit card deals on the market, but around 23 of these charge a "go to" interest rate of 18.9% or higher.
Chris Eagle has the inside track on 0% balance transfer credit cards:
‘Avoid using 0% balance transfer credit cards for new purchases; it’s totally detrimental to the whole function of the card’
He continues:
‘Clearing your balance before the end of any introductory period is essential also, and represents good credit card practice.’
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