despite credit card providers writing off up to 10 per cent of outstanding balances as bad debts, there is still a huge choice of credit card deals out there, offering a confusing array of introductory deals with numerous interest rate and fee combinations.
That's why it was a refreshing change to see the launch of the new Clarity credit card from Halifax last week. It's simply a good value, no nonsense product which stands out from the majority of the market.
There are no confusing interest-free introductory offers for purchases or balance transfers; instead, Halifax is aiming for a longer-term relationship with customers by offering straightforward value. What is particularly good is that there are no cash withdrawal or foreign loading fees for those who like to use their credit card overseas. Typically, a £100 cash withdrawal abroad can cost you almost an extra £6, by the time you take into account a 3 per cent withdrawal fee plus a foreign loading fee of typically between 2.75 per cent and 2.99 per cent.
At 12.9 per cent, the Clarity card's APR for purchases is well below the market average of 18.4 per cent, and the cash rate of 12.9 per cent is less than half that charged by many high-street rivals. While 12.9 per cent is the typical rate, bear in mind that some people with a less-than-perfect credit record may be offered the card at a slightly higher rate of 17.9 per cent or 21.9 per cent APR.
If you are someone who doesn't clear their balance every month, then one of the many cards offering a 0 per cent introductory deal on purchases or balance transfers may be a more cost-effective option. Halifax's Clarity card is a back-to-basics product and likely to prove a big hit with holidaymakers in the coming months, providing the opportunity to withdraw cash overseas without having to shell out a small fortune in costs.
It's also good to see Halifax customers being given the opportunity to earn a further £5 bonus per month, simply by spending a minimum of £300 per month on their card.
If you take out the current account and the credit card, you can potentially earn £120 per year in return for your loyalty, a strategy that could well pay dividends for bank and customer alike.
Examine your credit record online for £2
Following a deal between the Department for Business Innovation and Skills and the three main credit reference agencies, consumers can now view their credit records online for a nominal fee of £2. Until now this information was available only as a hard copy which was posted to you and could take seven days to arrive.
I would urge everybody to check their own credit record at least once a year, because any incorrect or outdated information recorded against your name could lead to you paying higher interest rates on your borrowing or, in some cases, see your application for credit declined.
These on-demand credit reports are available from the websites of Experian, Equifax and Callcredit.
Yorkshire tries to cheer up savers with fixed-rate bond
With the savings market still in the doldrums, it is encouraging to see some new best-buy fixed-rate bonds from the mutuals. Yorkshire Building Society has launched branch-based bonds from just £100. They pay 3.56 per cent AER fixed for two years, 4.11 per cent for three years and 4.6 per cent for a five-year term. All of these come with an option to receive monthly interest if you're looking to boost your income.
The Nottingham BS also has a four-year, fixed-rate postal bond paying an attractive 4.2 per cent from £1,000. Although it doesn't offer monthly interest, it does allow you to make further deposits while the account is still available.
*The US private equity firm JC Flowers is said to be considering investing £50m for a 49 per cent stake in Kent Reliance Building Society. The financial services market thrives on competition and maybe this could be a blueprint for similar deals to be struck with other societies, rather than the sector shrinking amid further mergers and being dominated by the profit-hungry banking giants.
Andrew Hagger is a money analyst at Moneynet.co.uk