View Full Version : Why is it....
22nd Apr 2008, 12:13
Why is it that at times like these, ie the so called credit crunch, I am being sent more credit card applications through the post than ever?
Just wondering if any of you chaps or chappetts have experienced anything similar?
Maybe they think if we all take out more credit cards it may solve the little situation that was partly caused by people over spending using these little bits of plastic in the first place?
22nd Apr 2008, 12:58
Having not received many letters offering me credit cards since turning 18 I have now started to receive them weekly (more than once a week as well)- only this lunch time I popped home to see the kind people of MBNA had offered me a platinum card.
Ironcially I have started to get more of these since Egg kindly wrote to me a number of months to call me ago a TW@<hidden> and that I was no longer allwed to have one of theirs despite continuously paying any bills on time for the previous 4 years!
Stick Em :mad:
22nd Apr 2008, 13:27
Write across the application form "NOT WANTED - UNSOLICITED MAIL" and send it back in their post paid envelope. Let them pay the postage.
22nd Apr 2008, 13:42
The answer is quite simple. You are a good credit risk and they hope to tempt you with interest free loans that they expect you will not have cleared when the rate changes.
Did you see one scam, 0% on credit transfer for 12 months and 0% on purchases for 3 months?
You pay a 3% fee for the balance transfer which might be £30 on a £1000 transfer. Then suppose you spent £100 on the 0% deal.
In month 2 you owe £1130 and are asked to pay 5% = £56.50. 0% interest.
In month 3 you owe £1074.50 and are asked to pay 5% = £53.73. 0% interest.
In month 4 you owe £1020.77 and are asked to pay 5% = £51.04 and 18.9% pa on the £100 purchases as the previous repayments were off the balance transfer ie £15.75 interest.
In month 5 you owe £839.73 on the balance transfer, the original £100, plus that £15.75 interest, a total of £955.48. You are asked to pay 5% or £47.77 and the bill will have £17.42 interest added.
So in month 6 your total bill is still £925.13 and so on. That interest will keep compounding at at the end you will still owe that £1000.
The trick is NEVER to use the 3 months 0% on purchases AND to repay that initial balance transfer at £110 per month.
There is one natioal building society that does not play this game. They also do not levee a surcharge on foreign exchange purchases.
22nd Apr 2008, 13:57
The first trick is to select them carefully and then apply for the 0% balance transfer and use them to pay off yor 6% mortgage. The second trick is to make sure you keep paying at least the required amount every month though with on line bill pay, you can stack 'em up and it's all done automatically.
The third trick is to not over extend yourself, because you want to be able to settle the loan when the 12 months 0% runs out and you'll need another loan to do that, but, as has been pointed out, that's not an overly difficult problem to resolve.
Thirty thousand plus and if I can be arsed I'll do another - and looving it. I should do the maths, but I reckon I've save four to six grand already on mortgage interest charges.
PLUS because you pay down your (amortized) mortgage, it means the P&I percentage split becomes more favourable and you in essence accelerate the loan.
If CDs (or savings accounts) still paid decent rates, it'd be worth doing 0% transfers directly into CDs/savings, leting the interest grow and then turn round and give them the money back. In fact if I wasn't so lazy, I'd make it an extra career path.
Tips: - because these offers are not as good as they used to be
(1) look for at least 12 months. Hard to find, but there are even some 15 month ones now.
(2) look for initial buy in costs. Some now say 0% for 6 months with a 3% balance transfer fee. That means you're really paying ABOVE 6% for the money. Some cap this at $75 $95 whatever and those are worth it.
(3) DO NOT do anything else with the card. DO NOT make purchases, because all payments are sent to the lower percentage balance, so you'll have to clear off the 0% before you even touch the 16%. This shouldn't be a problem though as you should have at least twenty credit cards by now.
(4) sign up for all the online sites for your cards as it makes it easier to track them - but make sure ou use a disposable address.
The banks call me a Deadbeat, but I call them a money machine.
22nd Apr 2008, 13:58
there is a simple solution....
ONLY SPEND THE MONEY YOU'VE GOT
thats what debit cards and this miraculous stuff called Cash is for :ok:
22nd Apr 2008, 13:58
That B/S is the Nationwide.
22nd Apr 2008, 14:01
I like it! :ok::D
22nd Apr 2008, 14:17
I agree there, im sick to death of getting stuff through the post for credit cards. If I wanted one I would apply for one.:ugh:
22nd Apr 2008, 14:23
Thanks Track ;)
ONLY SPEND THE MONEY YOU'VE GOTI disagree (though I do agree in principle) :confused:
I say spend only the money you can afford to spend. Debt is ok if it is backed by something, or is servicable. For instance buying a house would take a lot longer (or may be impossible) if you didn't have a mortgage. The house backs the debt and can be sold to relieve it and the job allows you to service the debt.
An overextended mortgage is a bad thing because you cannot service it and it (you) will eventually fail. Debt spending on pointless things like clothes (subjective comment) is pointless because you cannot recoup by selling and you end up not wearing them anyway. It's like wasted debt.
Then again I have some great clothes - though almost all of them came from garage sales :D
22nd Apr 2008, 14:49
Had a First Direct Visa ever since they started issuing them. Pay off full amount by direct debit every month.
A few weeks ago they cut my credit limit to 1/3rd of what it was! Then sent me a letter telling me what they'd done, after the event.
First time I've felt annoyed by them but no problem because they had often bumped the limit up without being asked.
22nd Apr 2008, 22:19
Thanks for the replies guys,
I think part of the problem is people are easily taken advantage by the banks, they are very good at making something quite simple into a hellishly complicated ordeal!
They seem to purposely take advantage of the young and the stupid, people who spend so way out of there means that there is no hope that they will ever be able to keep up the payments, the banks know this, hell this countries economy has been built on this and now its all come around to bite them in the ass.
So heres what I think I will do:
The next one that comes through the door (probably tomorrow) I shall open, I will read what the have to say, take careful note of the repay rates, then I shall through it away, leaving just the postage paid envelope, this I will take outside and fill with sand,I'm sure I can get a good 800 grams worth in there, perhaps even more if I work hard at it, then I shall skip across to my local post box and send it back at their expense.:E
I hate banks!