Should You Use the Contactless Card?

News has reached the KiranTrivedi blog that use of the contactless card has reached record levels and this prompts me to wonder, should we really be using the contactless card, or is it a risk to your personal finances?

The contactless card is exactly what you think it is – a revolutionary trick of technology which allows you to pay for goods or services on your card without having to put it into a machine. Instead you hold the card next to a device. It’s like a scanner at a checkout.

Exceeds £100 million a Month

It’s certainly proving popular with consumers, as The UK Cards Association has announced this week that spending with the contactless card has exceeded £100 million in one month alone, for the very first time.

This rising technology was first introduced by High Street mainstay Barclays, but has since rapidly spread among UK financial institutions. The Bank seems optimistic about the card, as it has said that it expects spending via this latest financial technology to total over £600 million this year.

This view is certainly one that is shared by Graham Peacop at The UK Cards Association. Peacop commented  to  the BBC that: "Whether it's to buy a cup of coffee or pay for a trip on the bus, today's figures show that consumers are voting with their wallets and find contactless cards a very convenient way to pay."

Kiran Trivedi on the Pros and Cons of Going Contactless

Despite the popularity there are a number of concerns about this game changing invention. The first is that it’s so new that it won’t benefit customers in the long run to invest in one. However, as businesses up and down the country embrace the new technology, this problem should clear itself up.

The larger concern is safety. Banking is precarious enough, and it’s a simple task for any determined criminal to hack into your bank account. Is this new technology, which is dependent on the sharing of information through the airwaves, really safe at the moment for consumers to embrace?

So there are a number of problems with the contactless card, Kiran Trivedi readers. However, as I pointed out earlier, your personal finances are always at risk with banking. That’s why you take steps to protect yourself. 

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Beware of the Small Print

The devil really is in the details when it comes to financial products, as we’ve yet again seen in the car insurance small print findings released by a consumer group this week. What do you need to know to avoid falling into the small print trap?

Small print are the terms and conditions of the agreement that you are signing up for. It’s all the technical stuff, and the reason they put it in small print is because it usually details the less attractive elements of the deal that you are about to sign up to.

That is why it’s small print – they literally make is as small as they are legally allowed to minimise any chance that these terms and conditions will turn off potential customers. So why is it a particular consumer issue at the moment?

Car Insurance: The Devils in the Details.

Consumer group website Fairer Finance has found this week that several car insurance deals boast word counts that number more than the entire word count for George Orwell’s grim allegorical novel Animal Farm.

The most alarmingly high word count was boasted by car insurer Endsleigh. According to the consumer group it totalled 37,674 words. Other providers of motor insurance that had word counts totalling over the 30,000 mark include Sheila’s Wheels, M&S Bank and Esure.

Founder of Fairer Finance, James Daley, summed up why this was so harmful to consumers. Daley said that "even those who do (read them) are struggling to understand them, (so) what exactly is the point of these documents?"

Avoid the Small Print Trap

Essentially, if small print is too long, people don’t read it. That’s why they’re making it so long in the first place. So how can you tackle this problem?

• Take time away to read it in full

• Ask for clarification on any points you don’t understand.

• Don’t let them pressure you into skim reading the small print.

• Research the company: If people are complaining about them, chances are you shouldn’t even bother considering dealing with them. 

Kiran Trivedi readers, taking in the small print is vital knowledge for you because if you don’t know it, it can damage your personal finances in a thousand small ways. Think about it, you don’t read then you get hit with a charge you didn’t expect, but that was outlined in the small print. Your monthly budget suddenly gets a whole lot tighter.

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Is Your Overdraft Good Value for Money?

Whether we like it or not, Kiran Trivedi readers, we all occasionally need to dip into our overdrafts to balance the books. But is your overdraft good value for money? Well according to the Financial Conduct Authority (FCA), it isn’t.

The thing about overdrafts is that no one wants to dip into them; it leaves you owing money and unless you have a student or post graduate overdraft, you’re most likely going to have to pay a charge for that service. However sometimes you have to, just to make it through the month. But is your overdraft leaving you worse off?

Overdrafts “Complex and Opaque”

The FCA has come out this month and put the whole lender overdraft culture into the spotlight, by suggesting that it is “complex and opaque.” What they mean by this, is that they are hard to understand, which means that because customers don’t necessarily understand the rules, they are vulnerable to losing money.

They’ve estimated that customers have lost in excess of £8 billion to banks and building societies through complex overdraft rules, and now the financial body has decided to launch a deeper investigation into the issue over the summer. Watch this space to see how it plays out.

The FCA has been reported to have said on the issue by news sources that: “Even the most astute consumer could struggle to understand what they are paying for" when it comes to an unarranged overdraft. So what should you do to tackle this problem?

Kiran Trivedi’s Guide to Handling Overdraft Issues

As long as you stay informed and you keep on top of things, there’s actually quite a few things to control the situation with your overdraft. These are:

• Research: Before you agree to anything, do your research. It’s a very competitive market out there at the moment, especially with the economic recovery,  and if you look around, you’re sure to find the right overdraft option for your personal finances
  
• Read the Fine Print: Lenders don’t exactly like to advertise the more unpleasant parts of their overdraft facilities, so they’ll usually stick it all in the fine print. Make sure you read carefully before you sign.
  
• Budget: An overdraft really should be a last resort; you shouldn’t be dipping into it to fund things like shopping sprees. Carefully budget so that you only need to use it in cases of emergency.
  
• Get Help: If you think you’ve been hit with unfair overdraft charges, and the bank are ignoring you, contact the FCA. Now is literally the perfect time, as they’re actually investigating the matter. 

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Why Should You Desert the ‘Big Six?’

If you get your energy from one of the ‘big six’ energy companies, and most people in Britain do, then you’ll know that they charge heaven and earth for their services. Saying that, Kiran Trivedi readers, why should you desert the ‘big six?’

Did you know that the annual household energy bill now runs up £1,264, and that only covers gas and electric? Why do you think that is? Is it because it simply costs that much to bring energy to your house? Whilst energy costs are rising all over Europe, they’ve risen much more steeply over here.

The thing is that they shouldn’t. In Britain we’re a lot more energy independent than Europe, as we don’t depend on Russia for our gas and oil and we have a growing renewable energy sector, which means that costs really shouldn’t be that bad. Furthermore, the fact that American shale oil and gas is flooding the market at the moment should make things even cheaper.

The thing is that the ‘big six’ don’t seem to be taking any of this into account. We see this best through the energy prices row last year. Labour leader Ed Miliband suggested that if he got into power then he would impose a 20 month energy price freeze.

The big six went mad. They immediately denounced any such strategy, saying that it costs too much to supply the country with energy as it is and that it why they are raising prices. They also rose prices again to circumvent such measures.

The actions of the big six from there show that they haven’t really got consumers best interests at heart, and that is why you need to desert them. In the end, the energy prices row stopped and not only did most of the big six not lower their prices, they also convinced the government to cutback the ECO Funding scheme; which provided energy efficiency measures designed to cut household energy bills.

This is why you should switch to a smaller energy company if you want to more effectively manage your personal finances. It’s logical really. Because they’re a small company they can’t afford to alienate their customers, which means that they have policies that mean that you get cheaper energy.

We have seen this recently with small energy company Ovo. Based on the usage of dual fuel by a medium user, the energy company has pledged to get energy bills to under £1,000 a year. This has prompted large energy firm SSE to say that they are freezing prices until 2016, showing that they really don’t need to raise prices to keep themselves afloat.

That’s why you need to desert the big six energy companies, Kiran Trivedi readers. They clearly don’t have your best interests at heart because they’re so big that they don’t need to. Switch to a smaller energy company if you want to more effectively handle your personal finances.

LINK TO INFO: http://www.bbc.co.uk/news/business-26947756

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Mobile Banking Has Officially Arrived

New figures suggest that mobile banking has arrived, and it has done so in style. How popular is this new method of handling your finances and how can you protect yourself so that you can mobile bank with the peace of mind that you won’t be targeted by fraudsters?

It’s hardly a surprise that mobile banking has become so popular. Smartphones are everywhere, and in today’s world, you can’t turn a corner without seeing someone with a device in hand. It’s simply a matter of convenience. However what surprised me, Kiran Trivedi readers, is just how pervasive mobile banking has become throughout society.

According to the British Bankers Association (BBA), the major organisation for the UK banking industry heavyweights, mobile banking has doubled within the space of a year. Considering the number of people already using this option, it’s a substantial jump.

The BBA has found that 5.7 million transactions a day are now made to banks via smartphones. Anthony Browne, Chief Executive of the BBS, commented that the figures are indicative of “an amazing revolution in the way people are banking," to the BBC.

Browne further went on to explain this boom in mobile banking. He said to the BBC that "the reason why it [mobile banking] has grown so much is just that it's a lot more flexible," and that "it's driven by customers - they can do it any time of day or night. You can pay a bill while at the pub - that sort of thing."

Browne is right, it really is a matter of flexibility, however this flexibility comes with a cost, and that cost is security. Think of how easy it would be for someone to steal your phone at the pub and gain access to your banking information. They could do untold damage. So how do you protect yourself from this sort of fraud?

It’s the same as in normal banking really… protect your information. Make sure that your phone is password locked at all times, don’t save your banking information on your phone etc. This is the only way that you can make sure that should the worst happen, and your phone is stolen; they can’t actually use it to steal your money.

This reminds us all Kiran Trivedi readers how important it is to protect your financial information, whatever system of banking we use. Remember that you’re only ever a step away from a fraudster; don’t leave yourself unprotected.

LINK TO INFO: http://www.bbc.co.uk/news/business-26816148

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