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.

According to FSA (the Financial Services Authority), 52% of people find it too complicated to compare financial products and another 46% are unsure whether they are getting a good deal on a financial product or not.

In an effort to help consumers choose between financial products Her Majesty’s Treasury has created a new steering group focused on promotion and development of “simple” financial products such as simple savings and protection insurance products to be brought to the market.

The steering group will bring together government representatives and specialists from trade, industry and consumer organizations. Together they will consider how “simple” products should be developed and forwarded to the market, starting with simple savings and protection products as well as simple investment products.

Former chief risk officer at Lloyds Banking Group, Carol Sergeant, has been appointed to chair the group which will submit its final report to Mark Hoban, Financial Secretary to the Treasury, in July 2012.

Ms Sergeant commented on the formation of the steering group: “Simple, easy to understand products need to be a viable commercial proposition for the industry, while offering consumers a straightforward benchmark that gives them the confidence to make good decisions in an often bewilderingly complicated market place.”

She pointed out that the success of this project “will require the involvement of consumer groups, financial regulators and the Money Advice Service, as well as the savings, investment and protection industries.”

Financial Secretary to HM Treasury Mark Hoban said: “Simple financial products have the potential to help many consumers make decisions that will help them save for the first time and plan for a secure financial future for them and their families. I am delighted that Carol Sergeant has agreed to chair a steering group to develop the thinking on simple products further and to work with industry and consumer groups to bring them to fruition.”

Thousands of holidaymakers are running the risk of spending thousands of pounds on medical bills as they travel abroad without insurance.

According to the 2011 ABTA travel trends report, 21% of British holidaymakers travel abroad uninsured, mistakenly believing the government will cover their medical bills in case of an accident. This figure rises above 25% for young adults under 25 years of age.

Moreover, 17% of Brits travelling abroad rely solely on EHIC, the European Health Insurance Card to cover their medical bills and believe that an EHIC will cover their journey back to England should they become ill. However ABTA warns that the EHIC only provides access to basic medical care and does not cover repatriation costs.

Lynda St Cooke of the Foreign & Commonwealth Office commented on the findings: “If British travellers get into difficulties overseas, there are things the nearest British Embassy or Consulate can do, including contacting friends and family for them and giving them information on how to safely transfer money from the UK. But consular staff cannot pay hospital bills for British travellers, nor fly them home if they run out of holiday money.”

John de Vial, ABTA Head of Financial Protection said: “It is very worrying that so many people are putting their health and finances at risk by travelling abroad without insurance. Many wrongly assume that it is the Foreign Office’s responsibility to pay for their hospital bills, particularly younger travellers. In the current economic climate customers should be careful to purchase insurance at the time of booking their holiday to obtain cancellation cover for redundancy as well as any potential illness prior to travelling. ”

These high numbers of uninsured travellers can be partially attributed to FSA (Financial Services Authority) regulations on insurance sold by travel agencies. Since 2007, these regulations boggle travel agents down with extra costs and red tape dissuading them from selling travel insurance. Therefore travel insurance sold through travel agencies now account for less than 17% of the total sales since agencies chose not to sell travel insurance because of the regulations.

Greg Lawson, spokesperson for the travel insurance company Columbus Direct said: “No one wants an unexpected bill and certainly not on holiday. We would join with Association of British Travel Agents and the Foreign Office to recommend that, as well as an EHIC for travel in Europe, travellers take out insurance whenever they travel overseas or in the UK.”

Average house prices across the UK have been steadily declining throughout the year and according to a survey by Halifax consumers expect house prices to drop even more in the foreseeable future.

According to the survey, thirty percent of the people surveyed predicted a further decline in prices over the next twelve months while a quarter said that prices will not change in the coming year. All the while a house price expectations index by Halifax fell to -2 from this year’s highest value of +9 in April.

Halifax economist Martin Ellis commented: “It is unsurprising that confidence in the housing market has been shaken a little over the last few months given the increasing uncertainty about the current economic environment, together with pressure on householders’ finances,” and he added: “We expect little change in both prices and activity over the next few months.”

Forecasts on house prices by analysts have also been pessimistic, predicting house prices to drop by as much as 5% in 2012. The generally weakened economy combined with substantial fears that the economy could start shrinking again point to further decline in house prices over the next twelve months.

However, as residential property prices across the UK continue to fall, prime central London prices continue their steady climb. According to the Land Registry house prices in London have increased by 2.7% since September 2010 and are now at an all-time high.

Many observers question the stability of those inflated figures, especially at the top end of the market, while others argue that these figures reflect a growing tendency for buyers, both local and overseas, to purchase central London property as a long-term investment.