Virgin money has announced their first two savings accounts since Virgin Money officially acquired Northern Rock plc on 1 January 2012.

The two new accounts, Virgin Easy Access Saver and Virgin Easy Access Cash ISA offer a competitive annual interest rate of 2.85% that remains the same regardless of how the account is opened. This means that customers will enjoy the same benefits whether they open their account online, via phone, post or through one of Northern Rock’s 75 branches. Both accounts require no notice to access funds and customers are required a minimum deposit of £1 up to a maximum of £100.000.

Arguably the most notable feature in both savings accounts is that they are not reliant on introductory bonuses that might confuse buyers. Simply put, the interest rate announced is not inflated for the first year and customers will not be faced with lower rates after that year has passed.

With that move Virgin Money shows that they want to promote long-term financial relationships with their customers as customers will not be baited with inflated introductory rates in the first place and will not be forced to search for other savings accounts after any introductory rates have expired.

Chief executive officer at Virgin Money Jayne-Anne Gadhia said: “These new savings products are designed to be simple, fair and transparent. They have an attractive headline rate, without a bonus, offering good value for customers”.

She continued: “There are no differences in rate whether the customer chooses an ISA or a standard savings account. What’s more, customers can choose to operate their account online, through a branch or over the telephone and still benefit from the same great rate.”

Meanwhile, the two new savings accounts have received positive reviews from financial experts and pressrooms alike.

The financial comparison website Moneyfacts.co.uk praised the two new accounts, awarding them with four out of possible five stars and placing them “comfortably within the top ten of similar products.”

Both accounts Virgin Easy Access Saver and Virgin Easy Access Cash ISA will be available from this Thursday in Northern Rock branches across the country.

In an effort to attract new buyers and motivate current customers during holidays, Halifax announced the extension of the 0% introductory rate deal on its all-in-one credit card to 15 months (up from 13 months) for both purchases and balance transfers.

This is the longest combined balance transfer and purchase card deal currently in the market but what does that mean for potential customers?

Simply put, customers won’t have to pay interest on any new purchases until March 2013 and any balance transferred from another card will receive a 15-month interest-free period starting when the card is issued.

All balance transfers from any other card are charged with a rather typical 3% handling fee that needs to be factored in when moving existing debts over to the all-in-one.

Such a strong promotional offer may tempt customers to frequently use the all-in-one card for all their spending during the interest-free period. However, specialists strongly advise paying off your debts within the promotional period to avoid “being hit” by the much higher interest rates that follow.

After the 15-month interest-free period, the Halifax All-in-one comes with a representative APR (annual percentage rate) of 17.9%.

Also, cash advances such as withdrawing money from ATMs are charged with an annual rate of 27.95% which can and should be avoided as customers benefit a lot more if they use the card for direct spending instead.

Head of banking at MoneySupermarket.com, Kevin Mountford commented: “There is no doubt that a long term dual purpose credit card is a welcome addition to the credit card market as it allows consumers to spread the cost of shopping and debt consolidation. The appetite for lenders to attract new credit card customers continues despite the current economic climate.”

Mr. Mountford also warned that “It is worth bearing in mind that although many customers will receive the 0pc offer for 15 months, this card is ‘risk-based’, so if you have a less than good credit profile you are unlikely to get this specific deal and may be offered an alternative.”

Forbes analysts explain that the mortgage crisis of 2007 had forced Northern Rock to turn to the Bank of England for liquidity support to meet short term debt obligations and unable to an acceptable offer from the private sector, Northern Rock was eventually nationalized on February 17, 2008.

Now, the British Government is selling Northern Rock plc to Sir Richard Branson’s Virgin Money for £747m. Completion of the transaction is expected on 1 January 2012.

The official announcement states that “The sale is in the best interests of the taxpayer, secures the long-term future of the company and will increase competition in the banking sector. This is part of the Government’s wider strategy for the banking sector with safer ring-fenced banks and more competition for customers.”

As part of the sales agreement Virgin Money has committed to:
• No further compulsory redundancies, beyond those already announced, for at least three years from the completion of the transaction.
• Retaining and expanding the total number of branches currently operated by Northern Rock.
• Extending support for the Northern Rock charitable foundation for a further year.
• Making Newcastle the operational headquarters for the combined business.

According to the press release from Virgin Money the transaction will create a significant new competitor in UK retail banking and, in doing so, it will help increase diversity in the retail banking sector as Virgin Money seeks to innovate and expand into new market segments.

Virgin Money stated that the transaction has the potential to eventually raise more than £1bn for the taxpayer in the long term along with numerous other benefits including the return of public sector stakes in banks to the private sector.

Sir Richard Branson, Founder of the Virgin Group said: “Banking in the UK needs some fresh ideas and an injection of new competition. I’m delighted we will get the chance to work with the loyal staff of Northern Rock to create a new force in the market. Virgin has a history of entering new sectors to improve service and provide value for customers. We plan to do the same in banking”.

While many analysts have commented positively on these developments others are skeptical and some have warned that Virgin Money products must become more competitive in order to revitalize the stagnant banking market.

Adrian Coles, director general of the Building Societies Association, said that Northern Rock’s sale was a “bittersweet moment” with both positive and negative effects on the market.

Have you noticed that many banks are encouraging their credit card holders to pay low monthly repayments?

Unsuspecting credit card holders pay up to three times extra in interest on some cards and it can take sixteen years more to repay a debt just by using one of the more expensive cards.

All cards require you to pay a minimum monthly payment that is supposed to pay that month’s interest and a little more besides. However, some card operators have such high interest rates and such low minimum repayments, that clients can be left chasing their credit tales for decades.

For example, clients paying the minimum with Egg or Lloyds TSB would take twenty one years to fully repay their debt whereas with MBNA it takes four years and eight months. Some difference!

Some borrowers are finding it impossible to gain access to the best mortgage deals, loans and credit cards despite having paid all their bills on time. Why? Because the credit reference agencies have made errors on the credit file they hold on that person.

Nobody gets everything right one hundred per cent of the time and this applies to the credit agencies as well. They make mistakes – but you pay dear for their mistakes!

Confusing you with someone else, recording other peoples’ credit problems on your file and general inaccuracies can wreck your credit rating and cause you untold headaches.

Our advice is check your files held by the three main credit reference agencies – Equifax, Experian and Callcredit. You are entitled to receive a copy of your file for an administration fee of £2 - and go through it with a fine tooth comb. If anything is wrongly recorded, the agencies have procedures you can follow to have your file corrected. The problem is that it all takes time and is a pain in the neck!

But until your record is corrected credit will either cost you more or even be refused. So once you have your record spot on, it’s a good idea to make the same check every year.

Millions of Spanish holidaymakers could fall victim to a credit card scam. It’s all because hackers have broken into the computer systems of a Spanish based credit card service company and stolen details of credit cards used in Spain.

At the moment the advice is, if you’ve been to Spain and used your credit card within the last 12 months check your card statements VERY carefully and question any transaction you do not recognise with your credit card provider.

In the meantime, card providers all over Europe are trying to identify which cardholders are at risk and rushing new cards to them.

A spokesperson for Visa said, “Cardholders who are affected by this fraud will get back any money stolen through their cards, subject to the terms and conditions.”

Two of the big credit card operators have taken changes in the banking rules as a chance to increase card charges.

M&S Money and First Direct, who incidentally, are both owned by HSBC Bank, have timed their higher charges to coincide with the changes imposed by the new European rules on banking. As from 1st November, First Direct’s fees for cash withdrawals increase from 2.5% to 2.99% - in effect that’s an increase of 20%.

The changes M&S imposed took affect on the 1st of this month. Two changes are involved, the fee for buying in a foreign currency increases from 2.75% to 2.99% and the fee for transferring balances increases from 2% to 2.9%.

These increases may not be ground shaking events but they represent the thin end of the wedge for customers who will inevitable see a steady increase across the board in credit card charges.

Last month a judgement slipped through the Newcastle County Court which could have major repercussions for the insurance industry.

The case related to a person who had been sold Payment Protection Insurance (PPI) by MBNA. The case was won on a technicality that will send shivers around the boardrooms of the companies that sold PPI.

The judge said that MBNA had created an “unfair relationship” by encouraging the client to take out PPI but failing to disclose the large commission that MBNA would earn as a result from the insurance company. Apparently, such an “unfair relationship” breaks new laws which were introduced in 2007.

As the judgement was delivered in a County Court, the case does not form a binding precedent but companies specialising in miss-selling compensation claims are rubbing their hands with glee. One claims company said, “This has massive ramifications. The unfair relationship issue is widely applicable as it underpins almost every sale of PPI”.

We think it probably applies to all other forms of insurance. Unless the seller informs the client of the commission they will earn, the case would seem to have been miss-sold.

Our tip for today is pay this months’ credit card and utility bills either online, by phone, at the post office or at you bank. Why? Because the regional postal strikes are extensively delaying postal deliveries and it’s set to become much worse.

If you usually pay your bills by post, there’s a strong possibility that your payment will arrive late. That means that your credit cards will charge you a late payment fee and that late payment will find its way onto your credit rating. So you face a two way hit.

Local postal strikes have been happening since June but a national strike is now on the cards after the Communication Workers Union balloted its members on strike action over conditions and pay.

Yes we know that you can still find credit cards with a 0% interest tag for an introductory period. But hey, look at the fees they charge for transferring your balances from your previous credit card!

The Nationwide offers 13 months at 0% but has a 3% transfer fee and MBNA’s 13 month 0% deal has a 2.9% transfer fee. Even Barclaycard’s 0% 12 month offering has a 2.5% transfer fee.

The average transfer fee for such deals is now 2.92% up from 2.74% this time last year. Indeed, some cards charge up to 5% for transfers, equivalent to three and a half months interest at a typical card interest rate of 17.3%.

This all means that rate tarts who have historically switched around between cards taking advantage of zero and low rate deals, are having a tough time as charges rise and credit is hard to come by.

And credit cards are becoming very choosey about who they accept. If you have a spotless credit record it may be possible to play the rate tart game for a little longer but with balance transfer fees rising, these charges are making the deals far less attractive.

Have you had a letter from your credit card company recently changing their terms and conditions? Then watch out!

A number of credit cards have made changes to their small print to squeeze a few more pounds out of you. Take Amex for example. Their Platinum cash back card has announced three changes, the most significant of which is that the date on which they have to pay their card by direct debit has been brought forward by four days. They now have to pay about 14 days after their statement. Barclaycard did a similar thing last year and hundreds of cardholders were caught out by not having sufficient money in their bank account when the direct debit arrived early.

Another of the Amex’s changes is that if the card is not used for twelve months, the card will be charged £20. And previously, customers could claim their cash back when they had accrued £12 – now it’s gone up to £25.

Cash back deals have also been changed by Barclaycard. Other cards to make changes recently include Goldfish, Sky, Flybe and Nationwide. If you have any of these cards, we advise you to check out how the changes affect you.

The interest you are charged is as much a reflection of the lenders’ financial circumstances as it is of yours. These are the main factors that affect the interest rates you pay:

The Bank of England’s official Base Rate
These days this affects saving rates more than lending rates. Only Base rate tracker mortgages are directly affected by movements in the Base Rate.

Money market interest rates
There are two interest rates which are very influential to the you are charged. Firstly, there’s what’s called the LIBOR rate. This is the rate banks pay to borrow money from other banks for short periods. Then there’s the SWAP rate. This is the rate banks pay for borrowing money from other banks for longer periods. These interest rates particularly influence the cost of fixed rate mortgages and those tracker mortgages that are linked to LIBOR.

The bank’s money supply
The principle is simple: If the lenders are short of money to lend but the demand is there, they’ll charge more and vice versa. At the moment the mortgage companies are using higher interest rates and higher deposit requirements to effectively control demand. As their coffers are replenished you’ll see lending criteria being relaxed.

Pressures on lenders to increase their cash reserves
Post credit crunch, the Financial Services Authority has forced lenders to hold twice as much in cash reserves. This means they have less to lend. And as we all know, some of the banks owe the Government billions which they’ll have to repay. This all creates pressures on them to increase their profits. How to the respond? Guess what, they charge us more!

Your Deposit
The bigger your deposit the more equity you’ll own in your home – and bankers like you to have plenty of equity - as that means they’re more certain to get back the money they lent you, if things go wrong. This means that they entice borrowers with plenty of equity by offering them the lowest rates.

Your Credit Score
The large credit agencies such as Experian, constantly collect information about your finances. They know who you owe money to and who you have applied to for credit and whether you’ve missed any payments. They also record defaults and County Court Judgements etc. They then use all this money to score you for your credit worthiness.

The lenders of unsecured loans and credit cards also use this information to decide not only whether to lend you money, but what rate to offer you.

A woman received £18,000 for a badly broken leg when her 3 inch stiletto heels became stuck in a crack in a concrete patio.

The lady from Tewkesbury was outside her local pub when her heel became fast in the crack and she fell backwards through a disused toilet door. The result was a broken right fibula and tibia which required three operations and nine months off work. The lady insisted she wasn’t the worse for wear at the time and blamed the accident on inadequate lighting on the smokers’ patio where the accident happened. The public liability insurers for the pub settled the case out of court.

In another stiletto heel compensation case, the heel on a new pair of shoes collapsed on the first night the lady wore them. Her heel hit the floor so hard that the impact broke her ankle in the process. This time the insurers paid out £7,000 after the shoe chain Dolcis admitted that the shoes had been faulty.

We always said stiletto heels were dangerous!

Recurring transactions are a way of making regular payments on your credit card and are commonly used to pay subscriptions, utility bills and sometimes credit agreements. The problem is that neither the card holder nor the credit card company can stop the payments. Only the company that set up the transaction can do that – and some seem less than keen to do just that!

Sometimes the company that set up the recurring transaction is difficult to find, sometimes it is simply inefficient at stopping the transactions – but we believe that sometimes it’s an outright scam. They seem to be able to continue taking payments long after the final payment has been made.

These transactions are different to a direct debit. With a direct debit, the banks guarantee that if there is a problem, they will sort it out and absorb the excess payments and costs. Not so with recurring transactions. Here the agreement is directly between the card holder and the supplier of the goods or service. As it is then the supplier who originates the payment, it is only the supplier who can stop it. The banks say, quite rightly, that as the agreement is between the card holder and the supplier they can’t intervene. If they refused the payment they would be effectively cancelling the purchase agreement to which they are not party and they are not entitled to do that.

So what is your remedy if you need to stop a recurring transaction? Well the only thing you can do is write to the supplier asking them to cancel the payments and copy the letter to your credit card. If they continue to take payments, the card company can intervene by instructing the supplier to stop the payments. If it won’t then maybe at some stage the bank might get tough with the supplier, but unless they can see wholesale fraud, they’re unlikely to get tough.

Could you cancel you credit card? Yes but if you set up a new one with the same credit card company, when that happens arrangements on your old card are often automatically transferred to the new card – so the problem stats again all by itself. The only chance you’ve got is to cancel your existing card and get a new card with an entirely new card company.

And what about all the excess payments you’ve made. Well you should eventually get your money back if the over payments were an administrative error. Otherwise, try whistling!

Many Britons heading off for the sun rely on their credit cards to fund their day to day holiday expenses – but they are playing a dangerous game.

Rising credit fraud, especially relating to transactions abroad, has led credit card companies to impose tougher operating criteria on all overseas transactions. This means that you are quite likely to have your card swallowed when you present your card to a cash machine as operators query almost any overseas transaction.

Some commentators have recommended that the way to avoid this problem is to tell your card operator beforehand that you are going on holiday. With some companies like Barclays, HBOS and HSBC this may help but it won’t guarantee that your card doesn’t get eaten. With most of the other operators, telling them won’t help a jot as their computer systems simply can’t store that information, let alone alter the fraud protection criteria on your card.

We could be arriving at the situation where card companies simply do not want you to use your card abroad. Certainly their policy of querying or rejecting a large proportion of overseas transactions would indicate this.

Our advice is, if at all possible do not use your card abroad. Use traveller’s cheques. And if you have to use your card, use it at stores and restaurants etc not at hole in the wall cash points. If you do this, then if your card is declined, at least you won’t have it swallowed up.

As the banks tighten their credit criteria are and more people are being refused any form of credit. That goes for loans, mortgages and credit cards.

According to Datamonitor, by the end of 2009 some 9 million people will be unable to raise credit from Britain’s banks. That’s 1 in 7 people.

On top of this, the companies that only two years ago were lending to those with poorer credit histories are falling like flies. London & Scottish went bump before Xmas, Benefitial Finance closed last month and Cattles appears to be teetering on the brink. That leaves just a few companies such as Provident Financial operating.

But don’t rush to Provident. They operate through agents going door to door collecting weekly instalments and their interest rates are eye watering. What would you guess their typical interest rate is? 25%? 30%? Could it be 40%? No it’s a mere 100%!

For some the only other option is what’s called a “pay-day loan”. That’s a loan given to workers to tide them over until they receive their next pay cheque.
A typical charge fort this service is £25 for a £100 loan. And that works out at an annual interest rate of 2000%. So perhaps we should consider Provident as a bargain!

These interest rates look morally wrong to us. We think that the Government will have to set up an enquiry into what is happening to see whether these interest rates are giving rise to excess profits – and if they are, they’ll have to set a cap the maximum interest rate and charges.

At last the Government has decided to ban credit cards from posting out unsolicited cheques. The credit card companies will also be banned from increasing interest rates without warning and forced to raise the minimum monthly payment.

Last year over 14 million promotional cheques were sent out by credit cards. The technique of sending out these un-requested cheques has proved to be highly profitable for the credit card companies. The interest charged on the money was usually higher than the rates on the card. And then there were usually handling fees of up to 2.5%. Not cheap! As a result many consumers have been led into excessive debt and it was clear that this practice would have to stop at some time.

These reforms were published in a White Paper last week. But that wasn’t all. There is going to be a crackdown on illegal loan sharks and plans for an advocate who will fight on behalf of those consumers who have been cheated by financial businesses. Finally, a specialist enforcement team is to be formed to focus on online fraudsters.

To us this is all good news. Let’s hope that the proposals in the White paper are implemented without further delay.

If you have had money stolen from your bank accounts or credit cards as a result of fraud or identity theft, then unless the bank is sure you took care to protect your banking details, they won’t pay up and the police won’t bother to investigate the case either.

This leaves you in a legal black hole. Unless you yourself can prove who stole the money (some chance!), you have no way of getting either justice or compensation.

And in the mean time you’re out of pocket – and probably big time!

In the four years since chip & pin systems were introduced, fraud on bank cards has halved but it is still running at the rate of £54 million a year. But remember, this figure represents the money the banks lost. It doesn’t take into account the stolen monies that the banks would not reinstate.

Under the Banking Code, you are entitled to claim for any money fraudulently taken from your accounts unless the banks believe you have acted irresponsibly. In practice, this means that if your bank thinks you did not keep your banking details secure, they won’t repay the money that’s been stolen from your accounts.

We are constantly hearing about the results of people’s identity being stolen – the fraudulent debts being taken out in their name, the scams on paypal and so on.

So what can you do to avoid being a victim of identity theft? Well you can never protect yourself 100% but here are some suggestions –

• Take yourself off as many mailing lists as possible – register with the Mail Preference Service (www.mpsonline.org.uk)
• Go ex directory. Contact your landline provider
• Whilst you will want to remain on the Electoral Role you can elect for your name to be taken off the published version. Speak to your local authority.
• Never volunteer any information about your date of birth or job especially to any organisation or web site that may publish that information – such as Facebook.
• When you have finished with any official mail or any mail which contains your date of birth, shred it.
• Many of us constantly receive emails purporting to be from banks, credit cards and other financial organisations. Unless you are expecting a specific email from your bank, delete them. Never reply when they ask you to “confirm any of your confidential banking details” or any personal information.
• Always open all of your mail, especially mail from phone companies, financial organisations or businesses selling electrical goods. It may be a letter about an application that they think you have made. If it does sound like that, phone up the company and check out why you received the letter.
• Always check your bank and savings account statements. If money has gone the quicker you get in touch with your bank, the better.
• If you post suddenly stops arriving contact your Post Office. Someone may have put a divert on your post.
• When you move home always divert your mail to your new address, it costs £39.05 for a year or £26 for 6 months
• If anything suspicious happens, check out your credit file at a major credit agency such as Equifax (www.equifax.co.uk)
• And finally, if you have had your identity stolen, confirm all your telephone conversations with the banks, etc by letter. With something as important as this, you need to leave a paper trail behind you in case disputes arise.

Hire purchase, the original consumer credit option favoured by millions in the 50’s and 60’s before sportier credit cards and personal loans came into vogue, is back in town.

The lenders like HP because the product that has been “hired” remains the property of the finance company until the last payment has been made and this increases their security. Consumers like HP because it has traditionally been cheaper.

Figures just released by the Finance and Leasing Association show a 10% increase in HP sales in the year to March. And in March alone sales were up 25% over the previous March.

Historically, the popularity of HP rose during Harold Macmillans’ premiership (remember his phrase, “you’ve never had it so good”) on the back of household items worth up to £1,000 – items such as washing machines, fridges, TV’s and carpets. It also flourished as a way of purchasing the family car.

It now seems that the wheel is turning round again. The Association says that HP has rebuilt its market share within the car market back to 54% and it’s increasing. And within Britain’s shops HP is now being used to support promotions such as “nothing to pay for a year plus 2 years interest free credit”.

Will HP pull us out of our recession? I don’t think so, but perhaps we’ll be a little more comfortable!