Are Credit Card Rewards All They Seem?
Recently the credit cards offering rewards programmes have increased. This increase is making many pay attention to how the programmes actually work. According to many credit card experts, the rewards credit cards are not all they seem. Despite the number of schemes offered the deals are poor, usually offering too little for the time and income needed to secure the awards. In fact many with rewards cards never reach the rewards as they find it too bothersome to try.
A new study was released regarding the use of rewards credit cards. It showed that a number of loyalty cards have increased from 122 from 2005 to 190 in 2008. This is a 50 percent increase; however, one in four cardholders will actually claim the rewards. The study showed that 1 in 4 in the last 12 months actually received an award.
This can be bad news depending on the card. Some loyalty programmes offer a time limit on the collection of the rewards, while others will let them accrue until the person has enough. The study looked at Sainsbury’s credit cards to find that 35 percent who had credit cards with rewards were offered less than 25 pounds when they did receive their rewards. 23 percent of the consumers questioned stated that they didn’t know how to get their rewards. 24 percent said that redeeming the rewards was too much of a hassle. The rewards can be redeemed by mail, internet or telephone when there is enough saved up. You still have to choose something that is within the reward limits and this is where it can get confusing. It is just easier to have the reward pay the monthly balance rather than try to redeem the cashback option, according to the research.
The schemes are definitely poor in value. You have to spend over 200 pounds to get the 1 percent cash back accrued to a high enough level to receive it. Sometimes the rewards that were researched were seen as false value. The rewards are often worth pounds and pence, but again it takes a great deal of time to get the points earned.
Sainsbury’s credit card with Nectar points is equivalent to 2 percent cashback on Sainsbury’s purchases. This would mean having to spend 100 pounds every week with the credit card to get 104 pounds worth of Nectar points each year.
The study is to offer a word of caution regarding the schemes. As it is seen a consumer must spend 100 pounds a week for the rewards with the Nectar card, which is pretty typical of other rewards schemes. If you can’t pay off the balance each month you are not any further ahead due to the high rates of interest. Before using the rewards cards consumers need to look carefully at how the points work. This may require a call to the credit card company for full disclosure that is not often seen on the internet or the paperwork you receive through the mail.
Millions Of People Due To Gain a Tax Rebate This September
New tax measures come into force this month that will see about 22 million people receive a tax rebate of around £60.
It all stems from the U-turn by the chancellor on plans to scrap the lowest 10 pence tax band, following pressure from backbench MPs to ease its impact.
The new measures will mean basic rate taxpayers see a tax saving of £120.
They will have £60 less taken from their September pay packets and will then see their net pay rise by £10 per month for the rest of this tax year.
The effective cash-back comes because personal allowances for basic rate taxpayers go up by £600 to £6,035 from 7 September.
Self-employed taxpayers will not feel the benefit until they start paying tax from January 2009.
But so far the tax changes only apply for this financial year.
Critics of Chancellor Alistair Darling’s U-turn say that these tax rebates will also benefit middle-income taxpayers as much as those on smaller incomes.
It will also punch an estimated £2.7bn hole in the national finances as Britain faces a deep economic downturn.
“When the chancellor put this budget together he wasn’t expecting to lose £2.7bn, but I’m sure when he re-jigged his numbers, he will take account of this extra money,” said Chris Jones of tax advisers Lexis Nexis.
“However, what we need to bear in mind, it could be good news for the economy.
“Taxpayers with another £60 in their pocket may well go out and spend it. That could increase High Street profits.
“So it could in some way balance it [the cost of the rebate] out, but probably not to the full amount.”
The 22 million people who are supposed to benefit from this change are the basic rate taxpayers who pay tax at a rate of 20% and whose incomes are below the threshold for paying the higher rate tax of 40%.
This is far more than the 5.3 million people originally estimated to have been paying more tax now that the 10p tax rate has been abolished.
The 10p tax band was scrapped by Gordon Brown in his final budget as chancellor before becoming prime minister last year, at the same time as he cut the standard rate of income tax from 22% to 20% from April this year.
As it became clear that this would still leave millions of the lowest paid worse off than before, the government was forced in May to change its policy.
To offset the negative effect of abolishing the 10p tax rate, Chancellor Darling announced that the personal tax allowance would be increased by £600 to £6,035.
To stop higher rate tax payers also benefiting, the starting point for the 40% tax rate has been cut by £600.
At the start of this tax year, the higher rate began at an income of £41,435.
This would have been pushed up to £42,035 as a result of the £600 personal allowance increase, but will now start at £40,835 instead.
These changes to the personal allowance, and the adjustment for higher rate tax payers, initially apply only to the rest of the current tax year.
Employees who look closely at their pay slips will see the changes made by alterations to their personal allowances and their tax codes.
Mr Darling has yet to decide if, in his Pre-Budget Report this autumn, he will make any further changes to personal tax allowances next year or simply leave things as they are.
Protect Your Business by Securing Your Assets
Running your own business is no easy task. Apart from the entrepreneurial mindset it takes a good deal of knowledge, nerve and discipline to get over the obstacles that get in the way. If you are a business owner you are facing risks all the time. One of the most important risks you should be aware of is loosing your assets through lawsuits. In recent times we’ve been observing what is now called “litigation explosion” - it has been estimated that around 50 000 lawsuits are filed in the US every day. Anyone can sue you for literally anything. If you own a business there’s a great chance that sooner or later someone sues you and all what you have worked hard for will be placed in jeopardy.
To play on the safe side you should take steps to protect yourself and secure your assets as there are plenty of events that can lead to losing them:
- A negligence or injury claim that exceeds any insurance coverage you may have.
- Lawsuits from disgruntled business partners or employees.
- Claims from creditors should your business fail.
- Breach of contract through no fault of your own.
- Catastrophic medical bills.
One of the surefire ways to protect your assets is using corporation services in Nevada. You simply buy a Nevada Investment Holding LLC and transfer your assets to it. Spending some $ $ to do this can save you a fortune if something happens to your business in future.
Attractive Private and Business Options
Hedging pennies in stocks is quite a common trend nowadays. Generally, hedging is a strategy designed to minimize exposure to an unwanted business risk, while still allowing the business to profit from an investment activity. Typically, a hedger might invest in a security that he believes is under-priced relative to its fair value and combine this with a short sale of a related security or securities. Thus, the hedger is indifferent to the movements of the market as a whole, and is interested only in the performance of the under-priced security relative to the hedge. This obviously creates a number of advantages for the hedger. One can also find advantageous financial options on a smaller scale. One of the conspicuous examples would be Unsecured Cash, which enables you to borrow money without placing anything as security. Applying for an unsecured cash loan is both secure and confidential, no matter whether you apply from your home or office. An unsecured cash loan is optimal for small amounts. Depending on your repayment ability, the loan amount can be increased. For example, car loans depend on the costs of the car that you are going to buy and your income that you get. But if you want to take a loan to buy a new house or an expensive flat you must first of all get information about quotes for mortgage loans and only after that take it because you should carefully estimate your income potential. Also sometimes you have the facility to extend the due date and also choose the mode of repayment, which makes this method even more attractive.
Understanding Credit Card Debt
When it comes to credit card debt, one of the most important things is to make sure that you understand what your credit card bills actually mean. Too bad the credit card companies make it next to impossible for people. Even worse, far too many in the United States and the UK lack the financial knowledge to even understand the terminology that is used. If you are sitting here asking someone to get me out of debt, then it is time you start learning about your debt help options.
The first and most popular form of debt consolidation is known as debt counseling or debt management. It involves using a third party to restructure your bills into an affordable payment. By doing so one can avoid late fees which will make paying off debt nearly impossible.
Another option is debt settlement or debt negotiation. This is a new type of debt management. By speaking to a debt consultant one can get information about filing bankruptcy and the costs of doing so. Both have disadvantages from a credit standpoint, so make sure to ask about these consequences.
If you would like to learn about the possible ways to pay off your credit cards fast with one of these plans, look online for an objective resource. One great site to go to is PayingPaul.com – the site about getting out of debt without “Robbing Peter”, or getting a loan.
Stamp Duty Decision Maybe Slowing House Sales
Reports that the government is considering changes to stamp duty are causing disarray and delays in the housing market, the BBC has learned.
Among potential measures to boost the housing market could be allowing buyers to defer the payment of stamp duty.
But readers of the BBC News website said that the uncertainty had caused problems for their transactions.
The government has denied that any proposals have been put forward at all, saying the stories are conjecture.
‘Backfired’
After having his property on the market for several months, Richard Bell was due to exchange contracts on his Windsor home on Friday.
But after reports appeared in the media of a possible stamp duty holiday, his buyer has asked to delay completion until the stamp duty situation is clarified.
He is angry at the way the government has handled the situation.
“Their crumb of comfort has backfired,” Mr Bell told BBC News. “It has stopped the sale in its tracks.”
“They really haven’t thought about the implications,” he said.
‘Killed off’
Chris O’Brien from Swansea said he thought the speculation would “kill-off” the housing market until the details of any changes were confirmed.
The stamp duty on the home he is due to exchange contracts on will be more than £8,000.
But he won’t now be signing on the dotted line until the government makes a decision one way or another.
“I don’t want to sign one day only to find that stamp duty has been abolished the next.
“The Chancellor needs to make a swift decision,” he said.
Going ahead
Mark Phillp and his fiance thought about delaying their home purchase until the situation was clearer.
They agreed to go ahead, but it was a difficult decision.
“We really didn’t know what to do,” Mr Phillp told BBC News.
“Do we hold off and risk losing the house or go for it and risk losing the £8,000 in stamp duty?”
They are now hoping that any announcement comes in the next fortnight before they exchange contracts.
The Conservatives have written to the Chancellor calling for an end to such doubt.
However a Treasury representative insisted that no decisions have been taken on changes to stamp duty.
“Recent news stories suggesting the government has put forward a proposal on stamp duty are simply wrong. These stories are based on speculation,” he said.
‘Clarity’
Estate Agents have been echoing the call from homebuyers and politicians for further information.
Peter Rollings, managing director of London-based Marsh and Parsons estate agents, said any further information would be helpful.
He said four househunters who came into one of their West London branches had told him they would hold off putting in any offers while the uncertainty persists.
“What we really need is some clarity,” Mr Rollings said.
He called on the government to at least confirm which price bracket any measures would apply to, in order to prevent the uncertainty infecting the whole market.
What is not clear yet is whether any ease of the stamp duty rules would apply just to the 1% band or to the higher rate bands as well.
Currently, people buying properties for between £125,000 and £250,000 pay 1% in stamp duty at the time of sale.
Those spending more than £250,000 pay 3%, while homes costing more than £500,000 incur a 4% rate.
There is a precedent for a suspension as the Conservatives temporarily suspended the tax on homes worth less than £250,000 during the 1991 recession.