Credit card debt crackdown plan
Tagged: Credit CardsThe government is planning a crackdown on the credit card industry to curb the temptation to get into debt.
Legislation will be introduced to stop card firms from raising the credit limit of a customer when this has not been requested.
Ministers also want to ban firms from sending out unsolicited credit card cheques to consumers.
UK payments association Apacs said its members did not raise the credit limits of borrowers with financial problems.
The outstanding balance owed on credit cards in Britain stands at £53bn.
Synovate: Global survey shows six in ten women consider themselves financially independent
Tagged: Credit Cards, DebtLeading global market intelligence firm Synovate today released results from a new study on women and financial independence, which found that nearly six in ten (58%) women across 12 diverse countries believe themselves to be financially independent.
Most emphatically independent were French women with 80% considering themselves financially autonomous, followed by British women (76%) and South African women (69%).
The survey looked at the roles women around the world play in their household finances; whether they feel in control of their own cash; how many women believe they are financially independent; as well as attitudes on whether women are better with money than men. Synovate spoke with around 4,500 women and also posed some questions to the same number of men.
Why women?
Synovate’s Senior Vice President of Financial Services in the US, Claire Braverman, explained why Synovate took a particular interest in women and finances in this survey.
“A woman meets a man, falls in love, moves in, gets married, has kids (not necessarily in that order) and it all falls apart. It’s not until this moment that she realises just how dependent she is on her partner’s money.
“Some women have checks in place to guard against this happening to them; some don’t. Some are financially savvy, and some are simply not interested.
“And even if a relationship break up is not a catalyst, women live longer than men and typically have less money upon retirement.
“All this adds up to an urgent need for financial services companies to understand women and cater to their specific needs and the situations in which they are likely to find themselves, planned or unplanned,” she said.
Sisters doing it for themselves
Braverman continued: “It’s not many decades since women started entering the workforce en masse and, to varying degrees, some aspects of gender equality remain unaddressed in every country of the world. Yet the survey found that nearly six in ten women across 12 diverse countries believe themselves to be financially independent. That’s certainly encouraging,” she said.
Least likely to consider themselves financially independent were women in Bulgaria (where 37% said they were independent) and Indonesia (47%). Overall, the developed economies surveyed were significantly more likely to have women who consider themselves financially independent than the emerging economies (68% versus 51%).
Braverman says that American women were particularly intriguing in terms of their perceived financial independence.
“While 64% of American women feel financially independent, that leaves more than a third of us who do not. For a nation that prides itself on an independent spirit, this is surprising.
“It may be that American women have higher expectations of what financial independence actually means. In part, there are a lot of women in marriages and partnerships who willingly cede monetary control, and there are an alarming number of women (often single mothers) in risky financial situations.”
Also, fascinating is the South African situation. The relatively new democracy is one of the six still-developing economies surveyed but is apparently filled with self-sufficient women. Seven in ten women said they were financially independent, even more than in the majority of the developed markets that were surveyed.
Synovate South Africa’s Client Services Director for Financial Services, Debbie Amm, said: “This is partly because the women we spoke with were largely urban, but there are greater cultural and historical explanations at hand too.
“Since South Africa became a democracy there has been a very strong and very public focus on gender equality, providing opportunities for women to advance careers or simply to start one.
“Equally, in both black and white histories, there has always been a need for women to be able to look after themselves and their families. South Africa can be a tough place, so this need for self-sufficiency has given rise to a highly entrepreneurial mindset among the women of the nation,” she said.
Breadwinning broads or ladies who lunch?
The survey also asked women to choose what the term ‘financial independence’ meant to them. The top three answers across all 12 markets surveyed were ‘Financial independence is about not being dependent on my husband or partner for money’ (41%), ‘Financial independence is about living debt free (30%) and ‘Financial independence is about being able to afford the things I want without worrying about the cost’ (18%).
The feisty French were most likely to equate financial independence with not having to rely on a partner for money (68%), followed by Dutch and British women (both 51%).
Doing without debt is key for 42% of Malaysian and 40% of Mexican women who chose this as their top definition of financial independence.
A standout 42% of Bulgarian women think financial independence means being able to afford what they want without worrying about the cost. This is more than double the number who chose that definition in most other markets (other than Malaysia, which had the second-highest response at 22%).
Stoyan Mihaylov, Synovate Bulgaria’s Managing Director, explains why: “It may surprise some from other parts of the world, but the prevailing family model in Bulgaria is for both partners to be equal bread winners. At the same time, women are responsible for running the household.
“There are two main reasons for this. First, during the socialist period both genders were practically equalised by income. After that time the differentiation of incomes in favour of men took place, although a decline in living standards pushed women into working and therefore preserved the model. Throughout all this, women remained the housekeepers.
“Thus women’s spending is restricted by the dual responsibilities they have. The dream of independence is not one of freedom from a husband-as-provider but one of having the freedom to personally provide for the wellbeing of the family, able to afford needs and wants regardless of the cost,” he said.
Man the head of the house?
The survey also explored men’s and women’s attitudes about male roles in household finance, finding that an overall 43% of women agreed that ‘a man should be responsible for the mortgage / house payments’. When the same question was posed to male respondents, 53% agreed, showing men are more likely to consider themselves more responsible for this part of the household budget. Naturally, there is a great deal of discrepancy in the findings across markets. Standouts are:
* Indonesia where 83% of men and 82% of women agree that ‘a man should be responsible for the mortgage / house payments’
* The Netherlands where only 15% of men and 7% of women agree with this statement
* The UK where 48% of men versus 15% of women agree
* Similarly, France where 47% of men believe they are responsible but only 18% of women agree
* Australia with 34% of men and only 12% of women agreeing
The survey also asked whether providing for the family is a man’s responsibility. Overall, 58% percent of men and 38% of women agreed. The two Asian countries surveyed were most likely to agree, with an overall 87% in Indonesia and 73% in Malaysia putting the onus on men.
Managing Director of Synovate in Malaysia, Steve Murphy, said: “This shows the traditional nature of Malaysia where the man is still very much seen as the main breadwinner for the family. The role of the male is established very early, firmly and consistently.
“Of course this does not mean that women have nothing to do with the money. In many cases, Malaysian women control the purse strings,” he said.
Similarly, when asked whether ‘a man should be responsible for looking after the financial needs of his wife or partner’, the more traditional cultures were most in favour. Overall, 51% agreed, made up of 57% men and 45% women.
A near-universal 95% of both genders agreed in Indonesia and Robby Susatyo, Synovate’s Managing Director for Indonesia, explains why.
“This is 100 percent cultural. For centuries, women did not engage in paid work or earn a living. Until quite recently, when urban Indonesians began widespread use of banking systems, husbands would surrender all their income to their wives for them to manage.
“Today, women’s participation in the labour force in big cities is about 37% but the mindset remains. She does it to supplement the household income and her husband does the monetary ‘heavy lifting’. In Islamic law, the husband is obliged to disclose all his personal wealth to his wife, but not the other way around,” he said.
Miss Responsible meet Lady Luck
Just over half of all respondents (both men and women) agreed that ‘women are more responsible with money than men’. Perhaps not surprisingly there is a significant difference across gender - 61% of women think the fairer sex is more responsible with money but only 40% of men agree.
The highest level of agreement was found in Mexico with an overall 72%, comprised of 82% women and 62% men.
Evelyn Jabiles, Managing Director of Synovate in Mexico, was not overly surprised. “Mexican women commonly play the role of home administrators, handing out money for utilities, rent, credit cards, school and medical fees and so on. They know what’s coming in, and what’s going out.
“Women here tend to think of men as ‘big spenders’ and somewhat irresponsible,” Jabiles said.
It appears many women like to be in control of the household money, but some take their chances as well. Thirteen percent of women across the markets surveyed buy lottery tickets or enter raffles and competitions in an effort to become financially independent or maintain that status.
Women who wager were most likely to be found in Australia where 35% ‘have a go’, or the UK where 31% join them.
Synovate Australia’s Managing Director, Julie Beeck, says: “The Australian market for lottery products is mature, with a high incidence of participation. The dream of winning big and changing your life overnight is very much alive?and even more so in such uncertain economic times.”
Credit where it’s due
How people feel about credit tends to evolve as credit card use matures in a country. Overall, 42% of our female respondents use part of their monthly income towards credit card payments.
The highest credit card use was in Canada at 77%, France at 72% and the US and Australia, both at 71%. The lowest use was 2% in Indonesia, 12% in Bulgaria and 19% in Malaysia.
Claire Braverman says that credit cards have had a negative image from the beginning, but convenience and rewards can make them a very attractive proposition.
“Some decades ago, when credit cards were first introduced, there was a dislike for debt and cash was king. Relying on credit meant you could not afford what you were buying.
“As people started using cards, that image switched to one of convenience. So in countries where the cards have become entrenched, they have been embraced for their ease of use and loyalty programmes.
“In countries where the use of credit cards is relatively new, there can still be a negative stigma associated with them. Among people who have low incomes, cards also pose control issues and people often shy away from them to ensure they do not go into debt.”
The Synovate survey also asked people whether they agreed with the statement ‘Having more than one credit card can lead to financial debt’. Overall 70% of women agreed, led by 90% of Mexican women.
Braverman continues: “It’s obviously not the card itself that causes anyone to use it. So the statement is really about control and temptation. The ability to spend more, money that you don’t have in the first place, can certainly lead to debt. It means people have to control themselves and their spouses. Not always easy!”
Evelyn Jabiles explains the danger in Mexico: “In Mexico, credit cards are perceived as ‘extra money’ rather than a line of credit, which is why they are considered dangerous by many. Interest rates on the cards are extremely high which only adds to the risk of debt.”
Curiosities
* Forty-seven percent of women believe that women spend more money than men – and 56% of men agree with them. Chances are high that much of this ‘big spending’ is done on behalf of the family.
* Brazilian and South African women are the most proactive when it comes to taking actions to become financially independent or stay that way. An example? 83% of Brazilian women and 71% of South African women make their own financial plans and / or budgets.
* Eighty percent of people believe it?s important to know about financial products and services offered by banks and insurance companies, led by South Africa (95%), the US (91%) and Canada (91%).
Contact(s) for this press release
Varian Ignatius
Marketing & Communications Manager, Southeast Asia
Synovate Sdn Bhd
Tel: +603 2282 2244
DID: +603 2297 5671
Send an email
About the Synovate Women’s Financial Independence global survey
This Synovate survey on women’s financial independence was conducted in December 2008 across 12 markets and with nearly 4,500 female respondents. Some of the questions were also posed to around 4,500 men. Synovate asked respondents about their financial independence; what the term means to them; looked at which financial instruments they might use; explored ways women choose to further their financial independence; as well as attitudes to the roles of men and women when it comes to managing money.
The markets covered by the survey are Australia, Brazil, Bulgaria, Canada, France, Indonesia, Malaysia, Mexico, the Netherlands, South Africa, the United Kingdom (UK) and the United States of America (US).
About Synovate
Synovate, the market research arm of Aegis Group plc, generates consumer insights that drive competitive marketing solutions. The network provides clients with cohesive global support and a comprehensive suite of research solutions. Synovate employs over 6,000 staff across 62 countries.
For more information on Synovate visit www.synovate.com
Building society helps customers with credit card debt
Tagged: Credit CardsA major building society has been judged the most responsible credit card lender for the second year running at The Card Awards.
Nationwide Building Society `was once again recognised for the transparency and clarity of its credit card information and for its `Trust Us, Trust You` campaign`, a Nationwide press release states.
Furthermore, Nationwide`s credit cards `continue to offer benefits not available from most other providers including a `positive order of payments`, which saves customers money by repaying any debt with a higher interest rate before repaying debt with a lower interest rate`.
“The interest charged is an important aspect of any debt,” said a debt expert for Think Money. “Focusing on higher-interest debts can make a big difference to a borrower`s finances, so it`s good to see a lender helping people with credit card debts by making sure their repayments go where they`ll have the largest impact.”
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Think Money offer a range of debt solutions, including debt management, IVAs (Individual Voluntary Arrangements) and debt consolidation loans. If you are worried about your debt, contact one of our expert debt advisers today.
5 million credit applications rejected in 6 months
Tagged: Credit Cards, Credit Crunch, Finance, LoansAlmost 5 million applications for credit cards and personal loans have been rejected by lenders in the past six months, a new survey suggests.
The research, commissioned by MoneyExpert, claims that around 56% of people in Great Britain have applied for a ‘financial product’ in the past six months. Of that number, 13% have had credit card applications rejected, while 6% have had unsecured personal loan applications turned down.
What You Need To Know When a Debt Collector Comes Calling
Tagged: Credit Cards, Debt, FinanceIf you have credit cards, chances are you may run into some debt at some point. And if you run up considerable debt, an official debt collector may contact you. Do not be afraid. Debt collectors are not evil, and there are rules that they have to follow. Being aware of those rules can take away some of the uncertainty and tension when it comes to debt collection. In 1977, the Fair Debt Collection Practices Act was passed to ensure that you are treated fairly. But you will want to be prepared in case a debt collector comes knocking at your door.
Just what is a debt collector?
A debt collector is a professional, sometimes an attorney; hired to collect outstanding debts by those owed money. Debts could include personal debts, credit card debts, medical debts, or car or house payments.
What will a debt collector tell me about my debts?
A debt collector will first contact you to inform you that you are being asked to pay off your balance. Then, within the next five days, you will be informed via written notice of the amount you owe, who you owe, and what to do to either pay off the debt or challenge the claim.
What ways might a debt collector contact me?
You may be contacted via phone, fax, email, regular mail, or even in person. However, a debt collector MAY NOT contact you at unreasonably early or late hours (before 8 am or after 9 pm), or while you are at work. Unfortunately, they’ll probably call just as you are sitting down to dinner.
Okay, I get it, my creditor wants their money back. How can I stop a debt collector from repeatedly contacting me, to the point of exasperation?
A debt collector is NOT permitted to harass you. If you feel they are harassing you, submit a written letter to the collection agency asking them to cease. After that, they cannot contact you again except to say they won’t contact you again. However, they may contact you or your attorney if legal action is going to be taken regarding your unpaid debt.
Can a debt collector inform just anyone about my debts?
If you have an attorney, your debt collector may contact them. If you do not, a debt collector is permitted to try to locate you through a third party, but they may not contact that third party more than once. In general, a debt collector is not allowed to go all over town asking about you.
So the debt collector has contacted me, now what?
You have the right to read your credit report in full. Make sure that it is accurate and complete. See our article about understanding your credit report to learn more, If you feel there is a mistake, submit your challenge to the creditor. If they insist there is no mistake, you can request that a statement from you be attached to your file that includes your testimony, so that anyone viewing your credit report will see both sides of the story.
Next, you have to work with the debt collector to start paying off your debt. That is their whole purpose. Your credit report will look much better once you have cleared that negative balance.
What is a debt collector NOT permitted to do?
A debt collector is NOT allowed to threaten you or abuse you in any way. This includes:
threats of arrest
using abusive language (such as profanity)
making your debts publicly known
annoying you via phone
A debt collector is also NOT allowed to falsify any information in attempts to collect your debt, such as:
faking legal documents
conversely, failing to inform you that an actual document is a legal document
misrepresenting themselves or who they work for
implying that you have broken the law and may be arrested (that’s a threat)
A debt collector CANNOT claim any action that is not legally intended by the people to whom you actually owe the money. Remember, the debt collector represents someone else, it’s not the debt collector you owe. So they cannot make any threats claiming they are going to seize your assets or garnish your wages. Only the creditors can do those things, and even then only if it is legal in your situation.
There are many practices a debt collector cannot do. If anything seems suspicious, check it out. Other examples of sketchy behavior includes:
making you pay for collect calls
making you pay more than you owe
What do I do if a debt collector is harassing me or violating my rights?
If you feel a debt collector is violating your rights, you may report the violation to your State Attorney General’s Office or the Federal Trade Commission. The Attorney General’s office will investigate your claim to determine if any laws have been violated. If this is the case, you may sue the debt collector for damages, possibly including legal costs.
I had to be contacted by a debt collector due to some bad outstanding debts, and my credit report looks bad. Will this incident haunt me forever?
You are in luck. Every seven years, negative information is cleared from your credit files, so long as the issue has been taken care of. If you have to file for bankruptcy, that information will be erased after ten years.
Do not fear the debt collectors. They are there to remind you that you owe someone some money, and to encourage you to get that balance squared away and get out of debt. Now that you know what to expect if you are contacted, you will be better able to maintain your rights and handle the situation with your rights maintained.
Mike Peterson is the author of “Reality Millionaire” and a co-founder and Spokesman of American Credit Foundation, an IRS 501 (c)(3) non-profit consumer credit counseling organization that has assisted thousands of individuals and families with their financial situations through seminars, education, counseling services, and, debt management plans. For more information, and free consumer resources visit: www.debtguru.com
comScore Study Finds Online Credit Card Applications from ‘Subprime’ Candidates Rise 30 Percent Over Year Ago
Tagged: Advertising, Credit Cards, Credit Crunch, Inflation, Press-Releases, USSource: PR Newswire Advertising
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Consumers seek ways to tighten credit
Tagged: Business, Credit CardsMore people are taking interest in their personal credit rating score and how they can improve it as lenders clamp down on access to mortgages, loans and credit cards
Credit crunch: Struggling singles join army of the ‘invisible’ poor
Tagged: Credit Cards, Credit Crunch, Debt, Inflation, InvestmentThe credit crunch’s forgotten victims, new research shows, are childless workers getting low pay, who are hard hit as basic bills rise
- Anushka Asthana and Jill Insley
- The Observer
- Sunday July 6, 2008
Five million of the poorest people in the UK have fallen below the radar of policymakers and become the country’s ‘invisible poor’, a new study will claim tomorrow.
A report by the National Consumer Council has exposed an army of childless people working long hours for meagre wages, struggling to pay for basics such as food, rent and clothing. Ministers have spent so much time focusing on the plights of families, pensioners and the unemployed, the study found, that the group has become the country’s ‘forgotten working poor’.
Many scour cheap supermarkets for cut-price deals, buy damaged goods and hang around market stalls as they close to pick up vegetables discarded by traders, according to the research that paints a remarkable picture of their lives.
In one case a woman ate noodles priced at 8p for lunch every day because she had only £10 a week to spend on food. Others cut back on non-essentials such as sweets for their grandchildren or birthday parties.
Most of the ‘invisible poor’ work long, irregular shifts, six days a week - causing their relationships to suffer. Many take on second jobs to fund Christmas. ‘There are a lot of assumptions on the part of society and the government that this group is all right because it has no ties,’ said Nicola O’Reilly, author of the report. ‘Like a duck on water, they look fine on the surface, but there is a lot going on underneath just to stay still. If you are continually being ground down like that, your aspirations are going to evaporate.’ O’Reilly said that many of the workers felt that ministers rarely mentioned them .
‘Political leaders talk of hard-working families or pensioners or child poverty,’ she said. ‘All those groups need help. But these people, who might be cleaning our offices, serving our children school dinners, or doing odd jobs, need recognition too.’
Adele Phillips, a 25-year-old project manager from Whitstable, is left with £12,000 once she has paid her student debt and basic travel. ‘It is a nightmare,’ she said. Phillips said she loved to read, but could not afford ‘luxury’ items such as magazines and books. ‘I suppose people like us are no trouble to anybody. I pay my bills, I pay my tax, I contribute, I work hard.’
The soaring cost of energy, housing and food is also having a disproportionately severe effect on single people. A study published last week found that a single person needs to earn a minimum of £13,400 a year before tax to achieve an acceptable standard of living - half the amount needed by a family of four.
Donald Hirsch, poverty adviser to the foundation, said: ‘The study showed that the economies of scale achieved by a family are sometimes greater than people realise. Singles have quite a hard time of it, particularly when it comes to housing and heating.’
The typical two-year fixed-rate mortgage has increased from 4.25 per cent two years ago to 6 per cent, pushing the monthly payment of a £100,000 interest-only loan up from £542 to £644. Richard Morea, technical manager for brokers London & Country, said: ‘The people who are suffering most are those who bought a couple of years ago and are coming up to remortgaging. They could be in negative equity now and the lenders are not interested in giving them loans.’
Young single people on low incomes will be hard hit by the government’s scrapping of the 10p tax band, which means that 500,000 single adults under 25 without children and another 115,000 childless single people, aged 25 to 55, will lose an average of £83 a year, according to the Institute of Fiscal Studies. But it is the rise in fuel prices that is having most impact on singletons. The average household energy bill has nearly doubled over the past four years, from £590 a year in January 2004 to £922 this year, according to theEnergyShop.com, and the website’s founder, Joe Malinowski, predicts this will rise to £1,425 next year.
For Sarah Burns, a geography teacher in Salford, the increase in her electricity bill has proved too much: she has taken in a lodger to help cover the cost. Burns had been living alone for 15 months after buying a two-bedroom apartment for £130,000 last year. Her mortgage broker advised her to take out a fixed-rate mortgage , so she has not been exposed to the increase in mortgage interest rates over the past nine months. But the amount she pays for gas and electricity has risen more than she anticipated. ‘I had to borrow five times my income to buy, and after I had paid all the bills I was left with £200 a month for any extras. Every month I was panicking about whether I would be able to afford the bills,’ she said.
Martha Lawton, who runs workshops on budgeting and money management for the charity Toynbee House Services Against Financial Exclusion, said: ‘We have seen a big increase in single people expressing concern at the hike in bills which remain the same whether you are single or part of a couple - in particular, mortgages, electricity and gas.’
She cites the example of one woman who attended a workshop last week:
‘She said she had been looking forward to the spring because her gas and electricity bill would go down. But when her bill arrived, it was exactly the same amount as the winter bills.’
A Department for Work and Pensions spokesman said: ‘While it’s true that the government has focused its efforts on those who need help the most - children, pensioners, and those facing barriers to work - working people without children have not been forgotten.
‘Work is the best route out of poverty and everyone has benefited from record levels of employment, more investment in public services and measures such as the national minimum wage. On average, everyone has seen their incomes increase more than inflation over the last decade.’