Money round-up video: Controlling credit as Christmas bills hit home

The Independent’s Personal Finance Editor Simon Read talks over the latest Money news.

Shoppers walk along Oxford Street to find bargains in central London, on December 26, 2014. ( ANDREW COWIE | AFP | Getty Images)

This week getting control of credit as Christmas bills hit home; missing logbook scam alert; pension scammers warning.

As Christmas bills hit home, it’s time to get control of credit

Struggling with debt? Rip up your credit card – you can live without it. As long as you have a debit card, you have the convenience of plastic. But there’s one important difference. When you spend with a debit card you know the cash is coming out of your bank account.

With a credit card you’re storing up potential future money worries. The more you live off credit, the more your money will disappear simply to meet interest payments.

Living without a credit card will take away the temptation to overspend. Anyone who pays off the card every month and earns cashback or rewards for using the plastic should continue. If you’re that well-organised, good on you.

Buying a second-hand car? Missing logbook scam alert

Don’t hand over cash for a used motor without a logbook. That’s the warning from the vehicle history expert, HPI. The company says it continues to see a rising number of customers fall prey to dodgy sellers passing on vehicles without a logbook or V5C, leaving them vulnerable to a number of scams.

Buyers must ensure the logbook is with the car before parting with any cash, otherwise the vehicle could be hiding a multitude of sins and they will be left seriously out of pocket.

“Logbooks are an integral part of verifying a car’s identity and ownership,” said Shane Teskey of HPI. If a seller claims to be waiting for one in the post, the buyer should wait until the seller has it before continuing. If it turns out to be stolen, buyers stand to lose the car and the money, so it pays to be patient.”

Pension scammers warning: fraudsters targeting new pensions freedoms

There are likely to be more pension scammers than ever looking to trick people this year, warned Elliott Silk, head of employee benefits at Sanlam. “Pension liberation means that after April, more over 55s will be accessing their pension cash and there is the potential for us to see a wave of new fraudulent scams,” he said.

Last week there were many warnings about the dangers of pension liberation companies set up to dupe people into accessing their pension with devastating financial effects.

“We expect to see a new wave of corrupt boiler room scammers using high pressure telephone sale techniques to target the 55s and over,” said Mr Silk.

“They will promise high returns in exchange for cash from small pension pots, promising to invest in non-existent structures such as Eastern European property ventures.

At the moment, the consumer does have limited protection because pension companies can freeze a client’s money and prompt an investigation if they are concerned about a potentially dodgy pension transfer request. But this protection will be lost in April as clients will be drawing out their money, rather than transferring it between legitimate pension providers.”