With Credit Cards Hitting Hardest, UK Consumers
Tax Themselves With Penalty Charges On Personal Finance Options
Author: Mr Hanna

A rise in costs for users of any financial service usually
results in public outcry, why is it then that so many of those
same consumers allow penalty fees and charges to accrue on
their credit cards, when the problem could so easily be
avoided?

The financial groups Defaqto and MoneyExpert have released a
report in which the startling figure that one in five consumers
have had to pay just such a charge, and while credit cards were
the worst offender, a number of different personal finance
services also incurred unnecessary charges. These services
included charges for simple personal finance errors such as
allowing an overdraft to go over the agreed bank limit, or
investing in an inflexible mortgage and then paying off the
debt early. In both cases either better preparation beforehand
with regards to choosing the right provider (such as using an
online personal finance database like Moneynet
(http://www.moneynet.co.uk/credit-card/index.shtml ) or Motley
Fool (http://www.fool.co.uk ) ) or taking advantage of
financial options now readily available would have presented
more flexible options which would not have imposed the
penalties.

To take an example, credit cards allow greater control over
your personal cash flow - you can pay now for a product or
service even if the funds you use will not be available to you
until the following month, at which point you pay off the
credit card. Credit cards also have valuable incentives for
their use with larger purchases, featuring, as the majority do,
insurance options and traceability. However when you are making
smaller purchases, say clothing or household products, then the
use of a credit card may not be the best use of your money:
searching for a suitable personal loan would most likely result
in better short-term rates and the avoidance of penalties such
as those imposed on the one in five people surveyed by Defaqto
and MoneyExpert.

With the survey also producing the result that one in twenty
consumers faced charges in excess of £100 it would seem that
this problem is more than a trifle for a large portion of the
UK population and that while there are a great number of
personal finance options available out there, there are very
often not used to the advantage of the consumer as they could
so easily be with a little research.

Disclaimer

All information contained in this article is for general
information purpose only and should not be construed as advice
under the financial Services act 1986. You are strongly advised
to take appropriate professional and legal advice before
entering into any binding contracts.


About The Author: Michael is a keen writer, and internet
marketer living in Scotland: Contact details: E-mail:
samqam@googlemail.com Phone: 0131 561 2251 Michael's Website:
http://www.gransha-taxi.co.uk