William Kay: For relaxed fans, this is one card dealt from the bottom of the pack

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The Independent Online

The blonde in the baseball cap came straight to the point. "Didn't I see you here last Saturday night?" she asked with a smile. I was at Wembley Arena for a Peter Gabriel concert, and sadly, I hadn't been to that venue for years.

But the blonde, a resting actress as it turned out, had a more businesslike reason for chatting me up. She was pushing the Music Mastercard, an MBNA affinity credit card which offers free gig guides and an exclusive advance booking hotline. MBNA's sales pitch was legal, but I question the ethics of confronting people with a potentially expensive financial decision at such an event.

Most of the Gabriel fans were relaxed, having a drink or a hot dog before the gig and mulling over the souvenir T-shirts before taking their seats. It is easy to be caught off-guard by a sales girl who asks you to fill in an application form, no obligation, for a free holdall.

The Music card is unexceptional. No annual charge, 0 per cent balance transfer rate for six months, 15.9 per cent APR on purchases, up to 59 days interest-free, up to £50,000 credit limit. But the freebies aren't for nothing. MBNA reckons enough people will use the card, and borrow on it, to meet the promotional costs and much more.

But someone at Wembley that night, buoyed by a few drinks and Gabriel-inspired euphoria, could have signed and spent themselves into serious debt. On the day of the concert, the Citizens Advice Bureau was warning of an "escalating debt crisis". Slick selling techniques will only add to that crisis, and credit card issuers should lay off.

Mind you, the real rip-off that night was the souvenir programme at £15. Breathtaking.

It has crept up on us with deceptive lack of speed, but the world is heading for one of those periodic lurches in the currency markets. And I must remind you that we are all foreign exchange dealers if we book overseas holidays.

The pro-euro lobby will cite this as another reason for Britain to join the single currency zone, but British holidaymakers are beset with danger. The main source of instability is the US dollar's weakness. In three months, it has fallen from $1.08 to $1.17 against the euro, and from $1.58 to $1.64 against the pound. Sterling has been caught in the middle, gaining against the dollar but falling from 68p to 71p to the euro.

George Soros, the financier who made $1bn from selling the pound before it left the European Exchange Rate Mechanism a decade ago, has said he has gone short of the dollar. By signalling his position he is doing what is known in markets as talking his book, hoping the publicity will add to the downward pressure on the dollar. But he cannot be ignored.

When such moods grip the foreign exchanges they can easily catch fire as professional dealers jump on the bandwagon. When that happens, the small man can be knocked flying.

So if you are going to Ireland or the Continent, buy euros as soon as possible. If you are heading for the US, buy dollars at the last minute.

* The hurdles confronting would-be first-time home buyers, as catalogued on page one, constitute a damning criticism of Government housing policy. By allowing house prices to rise in the way they have, the Government has engineered a change in British society which I hope it did not intend. A generation of under-40s has been forced on to the rental market, draining them of thousands of pounds year by year.

Maybe this is part of Gordon Brown's cunning plan, that by forcing people into rental at one end and encouraging 25-year mortgages at the other, he will magically keep interest rates stable. But hang on: Bank of England base rate has changed just once in 18 months. In a hopefully dynamic economy, how much more stable does he want rates to be?


William Kay is personal finance editor of 'The Independent'

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