Your Money: Put simply, in plain English, some finance products don't make sense

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The Independent Online

The familiar is often reassuring, but in personal finance, some things never change - and here the familiar is more likely to breed contempt.

The familiar is often reassuring, but in personal finance, some things never change - and here the familiar is more likely to breed contempt.

Even though the financial services industry has become almost righteous about the move towards plain English in the small print of its products, Which? magazine is not convinced that everyone is complying. Last week, it complained to the Advertising Standards Authority that Barclaycard's latest marketing brochure is misleading.

The row concerns Barclaycard's 0 per cent rate on balance transfers and the fact that users only qualify if they spend a further £50 a month at least on the card. The rate on these purchases is 14.9 per cent, not 0 per cent, and customers can't clear this debt until they've paid back all of the original balance transfer. Which? says this isn't made clear in the brochure.

Barclaycard argues that half of all consumers who switch a balance to another card continue to spend, so this £50 is easily attainable. But even though the company may spell out several times in the marketing literature that the rate of interest is higher on purchases - and can argue, therefore, that its brochure isn't misleading - customers are still being encouraged to run up further debts.

National Savings & Investments (NS&I) also did its best to demonstrate last week that some things never change. While several new providers have launched competitive savings accounts in recent years, leaving traditional providers with poor rates trailing in their wake, NS&I has launched a new savings account with - guess what? - low rates of interest. Savings of between £100 and £999 will earn just 1 per cent interest, compared with the 4.3 per cent on offer from ING Direct.

No amount of revamping tired old products can mask the problem that an essentially unattractive offer remains, and NS&I is simply showing how far out of touch it is. Consumers increasingly shop around for competitive deals; there is no longer any need to opt for complicated and misleading products, or those that aren't good value. But we do have to look out for number one, checking whether we can get a better deal - on credit cards, savings accounts, insurance or mortgages.

And it's also wise to remember never to sign on the dotted line if you don't fully understand what you are putting your name to.

m.bien@independent.co.uk

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