Saving Money Archives

This article focuses on the issue of repayments on store cards. It will explain how a recent legal decision impacts on the question of how store card debt can be recovered and the implications of this for people with store card debt. Read on if you have ever borrowed on a store card to find out if you actually need to repay the debt!

 

Store cards debtors: good for the money?

A recent legal decision created a precedent where store card lenders were not allowed to pursue debtors with store card debts in instances where the credit provided was not lent according to the rules and regulations that lenders are subject to including checking the financial status of the applicant and ensuring that relevant terms and conditions have been read and understood by the borrower. This decision particularly impacts people who are given unsolicited credit, such as a credit card or personal loan with an increased spending limit, which has not been requested. Please note that a reputable lender such as the payday loan company like the Wonga brand would never offer an unsolicited payday or personal loan as these are loans that must be applied for with a stringent acceptance process.

 

Unsolicited credit

This is based on the argument that the unsolicited credit was not explicitly agreed to and therefore the borrower cannot reasonably be bound by the terms and conditions of the store card. Some credit providers are also specifically impacted, for example those who hold a store card issued by M & S. This is because M&S operated a policy where store cards were automatically transformed into credit cards on a complimentary basis. The recipient of the new credit card would not have been required to agree to a fresh set of terms and conditions, and this is the key factor which influenced the case where a debtor was forgiven substantial debt by a county court judge. Credit providers like Santander and Barclays have also been stung by news of the legal precedent which allows a debtor to apply to a court to be released from an agreement to repay borrowing which has been spent. This is because they made a huge acquisition of financial companies in 2009 and it remains unclear whether people affected can claim they did not actually explicitly agree to any fresh terms and conditions attached to borrowing.

 

The future?

This area of the law is in flux however, and the ruling in relation to store credit was only made at the level of county court, which is subject to the higher jurisdiction of the High Court. If you want advice about your store card and whether you are actually required to repay the debts accrued using it, you should contact a professional for up to date advice on the subject. You could also contact the Citizens’ Advice Bureau for free and confidential debt advice.

The Advantages and Disadvantages of Ride Sharing

Car sharing services have taken off exponentially the world over in the past few years, with options ranging from ZipCar to RelayRides. These operate in slightly different ways. Some, like Uber or Lyft, work by allowing motorists to drive other passengers around the city for an informal taxi ride. Others, like RelayRides, allow car owners to rent out their car to other motorists. Finally, services like ZipCar allow motorists in cities to gain access to a private car when and where they need it, such as running errands. With the cost of car ownership so high, services like these can be quite appealing as alternatives to making a purchase. Yet there are advantages and disadvantages to consider first.

Advantages

One of the primary benefits of using ride sharing services is that you save the cost of car ownership. You don’t have to worry about your car being stolen or broken into, or pay the cost of car insurance and fuel each month. For those who don’t drive too often, it makes sense to only pay for a car when they need it. Ride sharing services are also popular among people who are interested in reducing their impact on the environment. Carpooling leads to fewer cars on the road, which equals fewer carbon emissions.

Families may be drawn to ride sharing services to avoid the cost of a second car. Saving that second car payment leaves families with more money to put towards retirement or a down payment for a house. At the same time, if someone wants to run errands and the primary family car is in use, they can simply hire a ride share vehicle for that big grocery trip or to attend a meeting on time.

Disadvantages

While there are many benefits associated with ride sharing services, there are also a few issues to consider. For those interested in renting out their vehicle using RelayRides or a similar service, liability can be an issue. If there’s an accident in your car, you may be held liable for it. You may need to take out additional insurance to cover this possibility. Another disadvantage is that there’s no guarantee you will be able to find a car when you need one. It can be hard to find available ride share vehicles on rainy days or during rush hour, for example. It’s harder to make spontaneous trips using ride share services like ZipCar. Instead, you need to plan ahead a little bit to make use of this type of service. If no cars are available, you may be stuck with a high taxi fee.

Overall, there are numerous advantages to ride sharing as well as a few drawbacks. If you’re dedicated to a greener lifestyle but still want to have instant access to a car for regular use, you could look at electric options like this Holden Volt at Carsales. On the other hand, if you’re only an occasional driver and live in an urban area, a ride sharing service may be the perfect solution.

Saving for your child’s future

For today’s young people, making their way financially in the adult world is harder than ever before. University fees look set to leave the next batch of graduates with debts in the region of £50,000, obtaining a home loan requires a substantial deposit and the jobs market is tough. Seeing this, many parents are providing financial support in a way that that their parents never had to, and the Bank of Mum and Dad is one of the most important lenders.

In order to prepare for these inevitable costs, parents are urged to begin financial planning as soon as they can, so it’s important to know what options are available. Here we have a look at how to go about building that important nest egg.

Junior ISAs

The Junior ISA is a great way to start setting aside money in your child’s name. You can invest as little or as much as you want each month, and be safe in the knowledge that the money pot will only grow in size. Some accounts require a minimum monthly deposit, but with specialists such as Family Investments this might only be £10 per month. When your child reaches the age of 18, he or she will be the only one who can access it.

ISAs

If you want more control over the money when your child reaches adulthood, then you can begin investing in an ISA in your own name. Of course, you need to make sure you’re not tempted to dip into those savings yourself! Adult ISAs can come in the form of a cash savings account, where the money is protected and will accrue moderate interest, or a stocks and shares ISA, where the rewards can be greater but there is the risk of the pot shrinking.

Tax efficiency

Whether you choose to save in a Junior ISA or one in your own name, you need to make sure that you are making the most of your tax allowances. Savings which accrue interest count as income, and can be liable for tax. For the 2013-14 tax year, you can invest up to £3,720 without paying tax on the interest. The standard ISA allowance is £11,520, but only £5,760 can be put into a cash ISA – to make use of the whole allowance you’d have to split savings evenly across a cash ISA and a stocks and shares ISA.

More information on tax related to savings can be found at the HM Revenue & Customs website.

Teaching Responsible Finances

Teaching our youth about responsible personal finances is an absolute must.  After all, these youngsters will be the ones running the world when we are old and retired.  Not to mention we want the best for our children, so teaching them right from wrong only makes sense.  Unfortunately, when many adults teach their children about proper morality, they often leave out the part about leading a financially responsible lifestyle.  This means that they should live within their means, pay their taxes, work at their job, spend less money than they earn, and be mindful of their finances.  For me, the most basic aspect of leading a financially sound life begins with opening your first bank account.  There are even bank accounts geared toward children now.  As a parent, you can easily compare bank accounts online and find the right one for your child to begin saving.

Parents often don’t understand the importance of the lesson they are teaching when they setup their child’s very first bank account.  This is what taught me the value of saving, and the dangers of spending.  It was fun to earn money and watch my balance grow.  Then when it came time to leave home and go to college, I at least had a little money saved to help get them through those four tumultuous years without having to work full time.  The pain and suffering of saving a little money here and there is much easier than the pain that comes with needing money and not having any available.  There are many options for basic bank accounts so finding one should come with no excuses.

Sit down with you kids today and have them read some reputable finance blogs (even this one if you choose), investing sites, and brokerage sites.  Financial literacy and education is at our very finger tips, and the average consumer can find just about any piece of information they want within minutes.  Who knows, you may be preparing your child to be the next Chairman of the Federal Reserve, or a Wall Street powerbroker, or even a public accountant that will end up doing your taxes a few years down the road. Years from now when your children are leaving college debt free, purchasing their first new car, or putting a down payment on their first home, they will be eager to thank you for instilling financial responsibility and the value of saving a dollar so early in life.

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