Questions of cash: One credit card refusal can lead to another

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Q. You answered a question recently from a reader who was cold-called by Abbey National.

Q. You answered a question recently from a reader who was cold-called by Abbey National. She was asked if she wanted a credit card and was then turned down when she said yes. So was I. My credit is clean and I regularly swap cards in order to use 0 per cent offers on balance transfers. It is really annoying, because a refusal sends up a red flag to other companies.
LM, York

A. MBNA Europe, which provides Abbey's credit card, denies having contacted you by phone to offer a credit card. "The credit card application from LM was received in response to a promotional mail and was subject to the normal underwriting process," says MBNA. "We have no record of LM receiving a telephone call from us." MBNA suggests you obtain a copy of your file from a credit reference agency, which it would then be happy to discuss with you. It says its decision was an appropriate one as a body committed to responsible lending.

Q. Next month I shall be 60. I have a pension entitlement split between three providers - one fund of £160,000, two of £8,000. My husband has only a small pension, so we need maximum guaranteed income. One adviser has suggested taking a tax-free lump sum, with an annuity on the rest; another says use drawdown and investments, plus an annuity. The amounts they quote as a total annual pension match the sum of the individual pensions, so should I ignore them?
SB, Uxbridge.

A. John Shackleton, a pensions specialist at Worldwide IFA, suggests that one reason the advice may seem confusing is that the advisers would be expected by the Financial Services Authority to cover the various approaches possible. Your decision on whether to take a tax-free lump sum may depend on whether your pension funds are personal pensions, occupational schemes or retirement annuities. "The basic principle on tax-free cash is that you would wish to generate the maximum possible as, even if income is required, cash can be converted to income in a more tax-efficient manner than a pension annuity," explains Mr Shackleton.

But this is subject to the need to check whether you are entitled to guaranteed annuity rates from any of your providers, and if so, what those rates are and what conditions they are subject to.

Any decision is further complicated by the question of whether any of your pension funds have protected rights, in which case you might delay taking elements of your pension until after April 2006 - when new pensions legislation comes into force - to improve the tax-free cash available.

Whether you should take pension drawdown depends on your personal circumstances, but you should do this only if you fully understand how it works. Mr Shackleton recommends that to choose your best solution you should instruct one of the advisers to produce a written report for you, detailing the benefits and drawbacks of each option.

Q. I applied for Abbey's postal cash ISA on 31 August, to take advantage of its 5.35 per cent rate. Abbey still can't tell me when it will be dealt with.
AR, St Ives.

A. Abbey apologises and says it has now opened your ISA account. The date of effective opening will be backdated so that you suffer no loss of interest, and Abbey is also sending you £50 compensation.

Q. I have been offered an insurance policy that sounds too good to be true. Plan2Give promises 50 per cent of the commission, £666, will go to the charity of my choice.
IA, by e-mail.

A. Plan2Give is an independent financial adviser, donating half the commission on most sales. Contact 0191 212 0202 or

Q. Why does it take two days for a cheque deposited at NatWest's branch counter to be credited to that bank's credit card? Paying in a day before the due date leads to a penalty.
AB, by e-mail,

A. NatWest has credited your account with the £25.65 interest charged for late payment. A spokeswoman said: "The process is the one banks use to move cheques from one bank to another. This will also include accounts at different departments in the same bank.

"On day one, payment is made at the collecting bank. On day two, the giro credit slip and the cheque are received at the clearing house. On day three, the payment is received by the department/bank."

* If you have questions, write to: Questions of Cash, The Independent, 191 Marsh Wall, London E14 9RS, or e-mail: We can reply only to letters published. Please send copies, not originals

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