Gill Fielding's Top Tips for Money and Finance
- Many students are about to leave University in the next few weeks and they will then not be classed as students anymore by their banks. Normally students get an interest free overdraft facility, but that can stop as soon as you graduate. Some banks allow you a free grace period and some gradually introduce charges but check with your bank so that you can address the issue before it becomes a big debt!
- And on a similar topic: students and non students alike should be very wary of ‘consumer’ debt – so borrowing money to buy stuff that will be out of fashion or out of date pretty quickly. Take a TV. If you buy a TV for £1k on a credit card and only pay the minimum balance off per month – it will take a staggering 37 years to pay off that debt (assuming average interest rates etc). The TV will be in out of date, broken and in land fill way before then. So before you purchase think about that. If you bought that TV at the age of 25 – you would be 62 – ie almost at retirement age - before it was fully paid off.
- Compare that to using cash back credit cards where they pay you back a proportion of what you spend. You need to use the credit card as normal but pay it off in full each month and they will then pay you up to 5% cash back! That’s a much better way to use a credit card. Some don’t give money but give vouchers for everyday spending like petrol etc so it’s worth having. And I like a voucher!
- Mortgages and interest rates: it seems that the major banks still don’t think that an interest rate rise is likely as they are all cutting their rates again. This month HSBC actually released a fixed rate mortgage deal at 1.69% for FIVE years! That crazy money. So it may now be the time to get that mortgage or even look at re-mortgages for you. Talk to an independent person or look on line for the best deals. If you talk to your bank they will only tell you about THEIR best deals not the best deals from others.
- And if you’ve always struggled to get a mortgage because you’re not a standard person with a standard job and a predictable income – there are more providers moving into the market place for you. They tend not to be the high street type lenders or at rock bottom rates but you can still get deals at about 2% with some: provides in this market are Kent reliance, Clydesdale Bank. Metro bank and Precise Mortgages.