Do I really need an overdraft?
Many people in the UK will have access to "interest-free" overdrafts for which they may be charged a small administration fee on a monthly basis. However, do we really need an overdraft or is it simply a long-term extension of our own credit facilities?
The ideal of an overdraft should simply be access to emergency credit at very short notice. However, it can be very easy to fall into the trap of accumulating your overdraft facility with your income on a monthly basis to arrive at "accessible credit limits". This can often lead to situations where we fall into our overdraft facility earlier and earlier each month which can often lead to extended overdraft facilities which are often more expensive and attract higher interest rates.
Even an interest-free overdraft facility, although often very useful at the time, can be the first step towards more debt and more charges in the future. We all need to be vigilant and keep within our budgets and not automatically assume that our overdraft facilities are part of our "everyday budget". It is easy to suggest that a £100 overdraft is simple to pay back but this could become £200, £300, etc and the situation can easily get out of control.
Northern Rock and Bradford & Bingley merger
Northern Rock and the Bradford & Bingley will be merged together by the UK government in an attempt to increase the pace at which UK taxpayers can expect to receive repayment of the loans offered by the government during the credit crunch. In effect the two "bad banks" from Northern Rock and Bradford & Bingley, which contain potentially toxic mortgage arrangements, will be brought together under a...Read More
Irish authorities looking to wind down Anglo-Irish bank
Irish finance Minister Brian Lenihan is this week expected to put forward a plan to the European Union for a ten-year wind down of troubled financial operation Anglo-Irish bank. This is the bank which was effectively bailed out by Irish taxpayers and has so far cost the Irish population around â‚¬25 billion. However, the government believes that now is the time to effectively disband the bank...Read More
Are we one step closer to a government financed toxic bank?
Gordon Brown has today announced another banking bailout with up to £500 billion of taxpayer's money set to be used to insure banks against toxic assets which are literally ripping the industry apart. This is in effect a "bad" bank in all but name as the Royal Bank of Scotland gets ready to transfer £250 billion of toxic assets into the scheme.
In theory the creation of the "bad"...
What is happening at the Dunfermline Building Society?
While the very basis on which the UK building society sector is run should in many ways reduce the possibility of a banking style crisis, it would appear from reports in the weekend press that the Dunfermline building society is in serious financial trouble. If the reports are correct it appears as though the society is on the brink of collapse after a number of investments "went bad" leaving what...Read More
Do you understand the Financial Services Compensation Scheme?
The Financial Services Compensation Scheme was recently updated by the government in the wake of the Northern Rock collapse and many at the time suggested that it was inadequate. The last few days has seen more and more savers concerned that they may not have the protection they first thought through the scheme. So how does it work?
In simple terms the Financial Services Compensat...