Plan Ahead to Keep Down the Cost of Christmas
(firmenpresse) - LONDON, UNITED KINGDOM -- (Marketwire) -- 12/13/12 -- With the festive season upon us and predictions of a bumper spend on loved ones(i), first direct suggests that customers who plan to use their overdraft to cover any additional spending, review their overdraft limit so it will cover their extra seasonal purchases.
Over a third of Brits have used their overdraft in the past 12 months(i) as it is a very cost effective way to borrow in the short term and this is set to rise as the Christmas cheer gets under way. However shoppers need to understand the cost of their borrowing. Even though overdraft interest costs have stayed the same, on average the annual cost of being overdrawn by GBP 500 for 7 days every month has almost doubled in 5 years from GBP 18.94 in 2007 to GBP 40.08 in 2012. This for many would be an unnecessary extra cost to the festive bill.
Andy Forbes, Head of Products at first direct commented, 'An overdraft is a convenient way to borrow for short periods without having to arrange a specific loan. Arranging an adequate limit on your account means you know you have the flexibility to spend up to that amount.
'With our 1st Account there is no cost for setting up or changing your limit so it makes sense to request a limit appropriate to your needs. At first direct there is no interest charged if you keep your overdraft balance under GBP 250 and higher balances are charged at a competitive 15.9% EAR.'
Andrew Hagger from Moneycomms added, 'If you ask people how much it would cost them to use a GBP 500 authorised overdraft facility with their bank, many wouldn't have a clue. Unfortunately it's not until interest charges and fees are debited to their accounts that some people realise just how expensive it can be.
'Although daily fees may be seen as more transparent and easier to calculate, it can prove to be a very expensive way of borrowing, particularly for smaller sums. A bit of planning can make an overdraft a sensible way to manage the costs of the festive period.'
Research by Andrew Hagger - MoneyComms.co.uk -22 November 2012
(i)Research by Moneysupermarket
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Datum: 13.12.2012 - 13:24 Uhr
Sprache: Deutsch
News-ID 212485
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LONDON, UNITED KINGDOM
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Personal Finance
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"Plan Ahead to Keep Down the Cost of Christmas"
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