Experts have warned UK borrowers that only those with ultra-clean credit histories will be able to take advantage of some of the latest attractive offers from credit card companies.

Barclaycard now offers its Platinum Card with an interest-free balance transfer that lasts for an unprecedented two years. The fee for the transfer is 2.8%, and there’s a discount of £20 for a transfer of at least £3,000. Virgin Money is also in on the act, with an interest-free balance transfer lasting 19 months, and MBNA offers the same.

Whilst these deals will appeal to many looking for a good deal on borrowing during tighter financial times, many will struggle to get the offer they want, and may be forced to look at alternative lending at a much higher rate of interest.

Anyone who has made a late credit card payment, or reneged on an agreement with a bill company, will find that their credit history has taken a hit as a result. Your credit history is used by lenders to assess your ability to make payments and your reliability as a borrower. Should you have any question marks hanging over you, then the best credit card deals are likely to elude you.

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A forthcoming initiative designed to benefit UK borrowers will actually result in advertised interest rates that are less indicative of actual rates, but consumers are assured that this will result in a clearer picture and a positive move towards more responsible lending.

The current rules require lenders to advertise the APR, or annual percentage rate, that would apply to 66% of UK borrowers, meaning that a third would be getting a higher rate than they expected.

The new Consumer Credit Directive will require lenders to advertise a rate that applies to only 51% of successful applicants, so very nearly half will be disappointed with their actual APR for their credit card or loan.

The Telegraph has reported that roughly 70% of loan applicants are unsuccessful, and, with the Consumer Credit Directive in force, only half of the remaining 30% of applicants will get the advertised rate. This means that a mere 15% of total loan applicants can genuinely expect the interest rate that first caught their attention.

Whilst this initially appears like bad news for borrowers, there are noteworthy positives. When a consumer is turned down for credit, there is no obligation for the lender to supply an explanation; that individual must apply for a credit report, and they may even need a report from more than one of the UK’s three credit reference agencies. On top of this, the problem may have nothing to do with their credit score. The process can be arduous, but with this new initiative lenders will be required to explain any application refusal, whilst also supplying the details of the relevant credit reference agency and how to get in touch.

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The number of people declared insolvent in England and Wales reached a record high in the third quarter of 2009, according to figures from the Insolvency Service.

There were 35,242 personal insolvencies, a increase of 28% on the same period last year, and a 6% rise on the previous quarter.

However, businesses fared better over the period, with 4,716 company liquidations, a 4.7% quarter-on-quarter fall. However, the number of businesses going bust between July and September was still 14.6% higher than the same period a year ago.

The recession has been fuelling the rise in personal insolvencies since 2007. There are a number of reasons for this. Increased unemployment has left more people unable to pay off outstanding debts, and the onset of the credit crunch meant that many banks limited the amount of cheap credit on offer. Therefore many people were unable to borrow their way out of immediate debt problems. The slow property market has also meant that people could not sell their homes and pay off outstanding debt with the equity.

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The number of UK homes repossessed in the first quarter of this year rose to 12,800 according to figures from the Council of Mortgage lenders.

This represents a 23% rise in repossessions on the previous quarter, and a 50% rise on the 8,500 homes repossessed during the same period last year.

However, despite the massive jump, the CML has admitted that its earlier forecast of 75,000 repossessions in 2009 was ‘pessimistic’, and it expects to issue a lower prediction towards the summer. A total of 40,000 homes were repossessed during 2008.

There was also a sharp rise in the number of people who have fallen behind on mortgage repayments. The number of home loans with arrears of more than 2.5% of the mortgage balance rose by 12% from 182,600 in the fourth quarter of 2008 to 205,300 in the first three months of this year. This was an increase of 62% on the 127,000 in the first three months of last year.

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Visa is piloting a new credit card, which the company hopes will help tackle card fraud.

The Emue Card, which is being trialled among Deloitte employees, features a keypad and display. When customers type in their PIN a unique code is displayed which is required to complete the transaction. This means that anyone who finds the card but does not know its PIN will be unable to use it.

Internet and phone fraud account for a large proportion of overall card fraud, because the perpetrator does not need to enter a PIN - only details found on the card itself are required.

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A new study by the Office of Fair Trading has revealed that a third of internet users are still afraid to use their credit cards to purchase goods and services online, for fear that their details could be obtained by fraudsters.

One in three UK consumers refuse to shop online because they believe their credit card details could be delivered into the wrong hands, the survey found. The OFT report follows similar surveys showing that shoppers are still wary about using their credit cards online.

Moreover, of those consumers who did shop online, three quarters said they still had misgivings about entering their card details.

In spite of the gloomy findings, the OFT survey shows that consumer confidence in general is on the up, and that consumers are more aware of their rights. Almost three quarters knew that they were not liable if their credit card was used fraudulently, compared with just two-thirds a year ago.

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Energy Regulator Ofgem has cleared energy companies of getting bills wrong or benefitting from “free loans” through overcharging direct debit companies. However, the regulator said that firms needed to make monthly direct debit demands clearer to customers.

Earlier this week consumer association Which? published the results of its own survey which suggested that many direct debits for gas and electricity bills were too high, effectively providing firms with free loans until the overcharge was reimbursed.

However, the watchdog Consumer Focus said it was reassured that no malpractice had taken place.
“It will be reassuring to customers that there’s no evidence of energy companies systematically over-collecting direct debit payments,” said Audrey Gallacher of Consumer Focus.

“It’s still the cheapest way to pay for energy, and spreading the cost over a year can be a convenient way to cope with large bills.”

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The number of Northern Rock borrowers more than three months in arrears on their mortgage repayments has risen fivefold, the bank has revealed.

Confirming a loss of £1.4 billion for 2008, the state-rescued bank said that 17,264 homeowners were more than three months behind on repayments, up from just 3,492 a year ago. Of its 585,000 borrowers, 170,000 were now in negative equity, with homes worth less than their mortgage.

One third of Northern Rock’s £66 billion loans were backed by insufficient security because of falling house prices. An additional £6.8 billion of mortgages would go into negative equity if house prices continued to fall by 5%, and £12.6 billion of mortgages if prices slumped by 10%. The figures released yesterday point to another explosion in home repossessions, analysts say.

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Some borrowers are paying as much as 10,000% interest on “pay-day” loans according to a Conservative report.

This comes despite the Bank of England cutting its main interest rate to just 1.5%, its lowest level in its 314 year history.

The shadow housing minister, Grant Shapps said that such rates of interest were “obscene”, especially since they often hit some of the country’s most vulnerable households.

He said that a lack of competition in the home credit market meant that loan sharks could charge such extortionate rates. The market is estimated to be worth £3 billion a year, although it is dominated by just six companies. Mr Shapps added that the problem could be tackled by creating a national finance advice service which would help consumers choose cheaper borrowing options, such as joining a credit union.

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Leading credit card companies have agreed to give more help to customers who are heavily in debt, after talks with government ministers on Wednesday.

Lord Mandelson, the Business Secretary, met with credit card companies and anti-poverty charities to push for fairer payment terms for credit card customers struggling to pay back their debt. In particular, he urged credit card companies to make clear to customers when rates change, as some credit card companies have been increasing their rates with little warning to customers, even as base rates have fallen sharply.

“The government is deeply concerned that borrowers aren’t getting a fair deal,” said Consumer Affairs Minister Gareth Thomas, who also attended the meeting. “That’s why we’ve taken swift action to bring the industry in to look at how costs are being applied to people’s existing debts.”

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