Tuesday, 26 April 2011

Insights on Islam and Debt from a Muslim Sister

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Saiyyidah Zaidi-Stone, Development Director at 1st Ethical Charitable Trust shares some Islamic responses to the credit crisis. She can be contacted via email at Saiyyidah@1stethical.com

Aristotle considered the most hated and unnatural profession to be that of the banker. Likewise all the Abrahamic faiths historically considered the charging of interest to be an exploitative practice. Granted, most modern day Christians and Jews may not consider sharing interest to be an affront to God but a good number do, along with most Muslims, whose faith still considers sharing interest to be prohibited.

Whilst the misery of the credit crunch is still wreaking its destruction upon a huge number of innocent victims, the wisdom of avoiding debt and hence interest can appear obvious. Yet it is only a matter of time before the money-go-round gets going again, leading to, as the old saying goes, another bubble and of course, another needle. And when the two inevitably collide, as they surely must, some new fools will learn an old lesson.

The point is that the human condition is such that we are emotive, excitable and gullible. Some more than others. Shockingly, empirical data indicates about a fifth of the adult population struggle with basic budgeting skills, often unable to properly prioritise their scarce income for the rent, utility bills and food costs and instead squandering money on cigarettes and alcohol.

Combating the issue of money management and debt reduction is doubly important in the current harsh economic climate, not only because people are suffering more, but also because for the first time in a generation, many are actually seriously questioning whether the current financial model really does need profound changes. With human nature being what it is, it will not be long before the credit crunch recedes into the memory, with talk of serous reform being relegated to pious aspirations or naivety, until the next major crunch hits.

This is why the idea of collaborating on a co-operative basis with like minded individuals and organisations is such a great one. It allows people who share the underlying values of living within ones means, a dislike of debt, and an aversion to extreme concentrations of wealth, to come together, irrespective of doctrinal or political belief, and focus on action - the action of educating and empowering people at a grass roots level and thereby making a tangible measurable and immediate difference.

The 1st Ethical Charitable Trust currently holds weekly seminars and talks at mosques, churches and universities throughout Britain, primarily targeting members of Britain’s Muslim community. The last decennial census showed Muslims to be the poorest, least educated and least healthy faith community in Britain. I would imagine the issue of excessive debt to be an integral part of this toxic mix.

One of the areas we wish to strengthen our work in, is practical ways in which financial literacy can be taught to lower income groups. At the same time we want to act as a bridge to organisations specialising in bespoke advice to those afflicted with unmanageable levels of debt. Adopting a scriptural dimension to our shared message helps us better reach Britain’s faith communities who all instinctively support the concept of living within one’s means and avoiding unnecessary debt. This is why we are happy to support the work of Zero-credit and, as our tag line says, Empower through Partnership. For more information on our free financial and legal guides on charity giving (zakat) and Islamic wills please go to www.1stethical.com.

 

 

 

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Friday, 22 April 2011

Let them eat cake!

This morning I read that one in four of us disguises damaged property when trying to sell. Last week it was bogus insurance claims; the week before, an increase in fuel thefts. Despite the hype around our lack of financial capability, the maths of a scam is not beyond us. Why is that?

The Daily Mail can rant all it likes about the 30 acne suffers who are too sick to work, yet the individual scams - persecuted or real - are nothing compared to the widespread abuse of welfare by so called competitive markets.

Take our money (as they do). Any chance of clearing a much needed cheque in the next ten days? No way!

With the odds on unauthorised charges from an inaccurate balance stacked against us, the market for managed accounts, helping us to pay in advance for bankers doing their job, is created. A Bank Holiday? You're damned right it is!

And what of our homes, now rented by so many? It is small government indeed that caps Housing Benefit without cutting back on the profiteers who charge four times a mortgage payment for once social housing. Here are your benefit scroungers, guv!

Fall short with utility payments and we're slapped on a meter, complete with debt from charges for stopped direct debits. Mail order firms take payments on a four weekly cycle, so why not switch essentials to accommodate unemployment or ill health? No wonder we're "confused".

Likewise, the 1985 Transport Act cuts more of us off - encouraged to buy, but unable to sell 24/7, when the last bus home leaves at six. DH Lawrence enjoyed more trains than we do today - ironic, when you live in the East meets West Midlands, as I do, and have none. 

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Image: Rawich / FreeDigitalPhotos.net

When we do shop, we see beer for a pittance next to rocketing bread prices - the very same ingredients, soliciting oblivion from the shame of hungry kids. Then there are the corner shops, branded with four by four packages and tills refusing to accept that we only need one.

Cut back? 

Beg pardon, Sir, I am forgetting myself... Up to six text messages a day, offering to ease the pain of tightening belts and the hope of a paid day future - but what proportion of £65 a week are they interested in for a guaranteed rollover?

How dare anyone say cut back, when taxes to meet basic needs are scammed. This is not capitalism. It is fraud. And I, for one, don't buy it. Prey on the weak, foolish and hungry at your peril, for in petty crime there is a caution - far prettier heads have been lost over the cost of bread.

posted by Emma Bryn-Jones

 

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Tuesday, 19 April 2011

Preloved - the Joy of Secondhand

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When times are tough, you can make money selling your unwanted items, or save money by buying secondhand. Here is one way to do both and even make friends at the same time! 

Prelovedwww.preloved.co.uk , established in 1998 is much more than an online classified advertising site. People can advertise unwanted items for free, and Preloved employs the tagline, ‘The Joy of Second Hand’, to celebrate the various elements that make the selling and buying of second hand items such a positive proposition for anyone.

Today, Preloved has more than 2.6 million visitors a month and a membership approaching the one million mark. It promotes its belief, that by buying second hand, people can make substantial cash savings.

Buying and selling seconhand also encourages a more sustainable way of living as it is one of the most effective ways of recycling unwanted items, which cuts down on unnecessary manufacturing and lessens land fill.

Preloved has around 120,000 new advertisements  every month - ranging from cars and clothes, to furniture, caravans, houses and sailing boats.  The sheer diversity of the items for sale makes it a vibrant hub of second hand activity. Just as importantly, there is a clear community feel fostered by the site that aims to encourage and share users’ enthusiasm for turning unwanted clutter into cash.

Managing Director of Preloved, Ian Buzer, explains, “We work hard to ensure that the site has a distinct community feel and a real personality. We aim to connect people through buying and selling. We have numerous members who have made lasting friendships by being involved with Preloved.”

The site automatically prioritises advertisements to members in their local area. Ian says, “Rather than having to buy from someone on the other side of the country, it’s more likely that buyers and sellers will live close to one another, even in the same town.” Such an approach encourages more face-to-face contact, often between people who share a common interest. It also means that during a visit potential buyers can inspect the item for sale and find out much more about it before handing over any cash.

Angela's Story

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Angela Beebee lives in Rugeley, Staffordshire and has been a member of Preloved since April 2009. As a regular user, in the last two years she has placed over 100 adverts on the site, selling everything from a kettle, rice steamer and cycle carrier, to camping equipment, a dishwasher and Volvo estate car.

“I sold the Volvo to a very nice man from Essex who travelled up with the cash. I told two of my friends about Preloved and they both advertised cars which also sold on the same day as they were put on the website,” she says.

Angela believes that one of the key strengths of Preloved is that, unlike other online auction sites, it brings buyers and sellers together in the real world which means there is less time wasting and people are more likely to be interested in making a potential purchase. “You are going to meet buyers face-to-face, so they tend to be more genuine people. I use it regularly and nearly always have something on there.” She continues, “It’s a very useful site to use and it makes you feel safe as it’s usually someone local who is buying from you, within about ten miles of here.”

“It’s a really friendly site with a totally different atmosphere,” says Angela. The site’s more personal approach to buying and selling also encourages users to form friendships with the people they meet. “I’ve made one good friend who lives in Preston, Lancashire, and we keep in contact via email and speaking on the telephone.”

Since joining the site, Angela says that she has made about £2,500 selling items. She saves the money she makes to put towards family holidays and buying presents at Christmas.

For those who are considering advertising on Preloved, Angela has the following advice. “Put as many keywords as possible in the title. If you use lots of keywords the item will come up in a wider search.” Furthermore, she advises users always to include a good photograph of any items for sale. “It’s also a great idea to make it clear that you are happy to send more photographs if requested by potential buyers.”  

Do you have a story about buying, or selling, secondhand? We would love to hear from you.

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Saturday, 16 April 2011

Who are the real sharks in legal lending waters?

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Image: graur razvan ionut / FreeDigitalPhotos.net

 

Andrew Smith, Marketing Director at commerical debt management company, Cleardebt, shares his personal views on Consumer Credit regulation. Cleardebt is a member of the Debt Resolution Forum.

Capping interest rates is a really bad plan - in my opinion it will be very counterproductive and mean that many who need access to credit for essential expenditure just won't get it.

The last government thought it would lick the problem of high cost credit by encouraging the friendly societies to lend to the financially excluded (or funts - financial untouchables, a term I helped coin: These are people the mainstream banks don't wish to have any experience of dealing with). The friendly societies, apparently, turned round and pointed out that, in view of the risk, they'd have to charge pretty much the same APR as the existing high cost lenders.

Take a look at this blog from Chris Goulden of leading anti-poverty campaigners, the Joseph Rowntree Foundation. If you can’t be bothered to click – the nub is this:

“In contrast, many home credit users in our research said they appreciate the relationship and service provided whilst realising that they are paying a high price. What they get for that price is a flexible service with no sudden charges when they cannot make the payments. The fact that such charges are built into the overall cost is one reason why the interest rates are so high. Another reason is that this is an inherently risky market to lend money to."

JRF research published in 2009 investigated whether it might be possible to translate the aspects of home credit appreciated by customers into a not-for-profit setting. Despite stripping out the profit and considerable start-up funding, the modelling still indicated that:

"With an £18 million subsidy, the APR on an average 56-week £288 loan would be 123 per cent (compared with 183 per cent commercially), bringing customer savings of £50. But to achieve a reduction to 100 per cent, APR would require a £90 million subsidy. Customer savings would increase to £72 per loan (£170 yearly on an average annual loan frequency of 2.34)."

So, not even charities can really do much better than those commercial providers who are risking their own money and not the taxpayers'. Cap the rate and you cut off credit supply to high-risk groups. They won't be able to replace their dishwashers or get the banger they need to get to work, fit to pass it's MoT.Great.

Then, is high cost credit actually that high cost? Used as intended, to tide you over at a critical time when you have a critical need, payday loans cost about as much as saying to your mate "lend me a tenner and I'll buy you a pint at the end of the month". They are tough - but not unreasonable.

Of course, especially here, there are exceptions – but there are lenders who charge a lot because it reflects the cost of risk as well as those that are just taking the piss.

Used as unintended, as rolling, renewed credit to finance an unsustainable lifestyle, they are usurious. But having a statutory duty to lend responsibly could end this: I'd suggest a maximum number of short term loans (three?) in a given period (a year?) and only two to be able to run concurrently. Oh - and tough rules on selling. Longer term high interest loans? A maximum net-income to advance ratio and a maximum loan period maybe?

And, whatever happened to the bank manager who used to ask you what you wanted the money for? Loans for frivolous purposes could be restricted and evidence of use of the money required.

The solution, of course, is to end poverty and ensure people have decent incomes. Like that’s going to happen sometime soon.

In the meantime, we could get rid of high cost credit all together and ensure the funt gets what he or she needs to deal with a money crisis and not pay through the nose.

The banks we own are making money hand over fist again: why not make them put 0.5% of their profits into social lending? By my reckoning that would be about £125 million quid - or 250,000 advances of £500. That’d be a start.

 

 

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Thursday, 14 April 2011

The debt goes on...

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Image: renjith krishnan / FreeDigitalPhotos.net

So insensed by our DWP forcing jobseekers into debt post, new Member, Bill Kruse continues to ask who's really paying for the bailout?

 

Forcing us all into debt appears to be exactly what the government wants to do; they want to replace government debt with public debt. This means the likes of you and me have to go into even greater debt than we're now carrying so their big business and banking chums can have another bite of the cherry. I've mentioned impending broadscale social disorder and breakdown before and I'm quite serious about this as a) this is the information age and as more people begin to discover the truth about how banking and finance actually work it seems inevitable protest and rioting will become commonplace even here in the staid UK and b) we almost had a complete breakdown back in 2007/2008, something not many people seem to be aware of.

 

Then there's this, to add to our problems, Osborne's tax inspectors are cosying up with big businesses to ask them what they want in a tax haven and seeking to implement those requirements, not chasing them for the taxes they owe as they should be. Now if giant corporations aren't paying their taxes here or anywhere at all, just who is it who pays for the environment we live in? Answer; we do, or that appears to be the (probably optimistic) theory at least. That may account for some of the nonsense going on in job centres at the moment, with claimants being threatened with sanctions for absurd reasons if they fail to apply for wholly inappropriate jobs they have no reasonable chance of actually getting.

 

Let's face it, None of the biggies in government or their business chums have any idea of what really goes on in job centres, they probably genuinely believe that if we're all kicked up the backside harder then we'll magically somehow all find jobs. Wishful thinking I'm afraid. And in areas where they should be kicking backsides very hard indeed they're simply offering cosmetic solutions. Witness reports from the Vickers Commission on Banking Reform suggesting banks should ring-fence customer money to keep it separate from their casino operation.

 

This is so they don't lose all our money when they lose all theirs, it's suggested. What are we going to do when they fail to do this? What are we going to do exactly when they admit this alleged ring-fencing hasn't worked (or, more likely, wasn't even bothered with) and blushingly admit that, since they've lost all our money for us, again, we'll just have to bail them out, again... or else they'll go bust and the UK economy (or, indeed, the worldwide economy given how internationally connected banking is now) will fail? Threatening the banks with feeble nonsense like this is only going to make them roll over and yawn, not snap to attention. The economy remains headed off a cliff and the authorities, charged with putting a brake on this behaviour, seem instead to be in the front passenger seat, urging the mad bankers on as they drive us from one financial calamity to the next...

 

 

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Wednesday, 13 April 2011

One in three Pensioners cannot afford their homes...

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As Benefits Awareness Month continues, a new survey commissioned by Turn2us, part of the national charity Elizabeth Finn Care, has revealed that large numbers of older people are unaware of their entitlement to Pension Credit.

Pension Credit serves as a top up to the state pension and is often a vital source of income. The need for awareness is highlighted by the fact that almost half of those surveyed are struggling to make ends meet, including many who have suffered a detrimental impact on their mental health as a direct result of their financial situation. And although over 9 in 10 of those surveyed are aware that Pension Credit exists, 8 in 10 of those potentially eligible are not claiming and well over half do not believe they qualify for Pension Credit at all.

These results are especially troubling given the fact that over the past six months, a quarter of those surveyed have struggled to pay their household bills, a third have had difficulties covering their housing costs, one in ten has had to miss one of the recommended three meals a day. Over half have struggled to buy clothes for themselves. 

Turn2us case study, Aneira, found out about the Turn2us service from Macmillan Cancer Support, shortly after her husband died of cancer. Aneira had kept the house warm throughout the winter to keep her husband as comfortable as possible, and with enormous heating and electricity bills to pay and a funeral to finance, her debts were mounting. Aneira also has the responsibility of acting as carer for her son, who had a stroke, which places additional strain on her finances. Through using Turn2us, Aneira received some useful information about benefits, and has been able to claim state entitlement for carers. She said: “I really don’t know how I would have managed without this extra assistance. I have been under so much emotional stress and this support has eased a lot of my financial worry. I didn’t know where else to go up to this point and Turn2us has made all the difference.”

Turn2us launched its Benefits Awareness Month campaign at the beginning of April, urging anyone in financial need to visit www.turn2us.org.uk and ensure they are claiming all relevant benefits. There is an easy and quick to use benefits checker to calculate your possible entitlement to welfare benefits and tax credits. This is especially important for older people, who are one of the groups most likely to need a little extra help, and unlikely to believe they could or should claim. So, remember to check benefits awareness amongst oldrer family and friends.

 

 

 

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Tuesday, 12 April 2011

Speak out about the legal loan sharks in your area!

Post from Alan Thornton, Church Action on Poverty

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There is growing anger that thousands of low-income families are being charged 500% APR for credit - and sometimes much more. 

Church Action on Poverty have set up a special web page so you can quickly and easily write to the letters page of your local newspaper to raise this issue. 

This country is unusual in that credit companies can charge whatever they want as long as there are people desperate enough or with few choices. Contrast this with the USA, Canada, France, Germany and many other countries which have legal ceilings to protect consumers from extortionate lending.

For too long, the legal loan sharks in the UK have won the argument about the risks of legal caps on the total cost of credit. Earlier this year, over 400 MPs voted for the new finance regulator (the Financial Conduct Authority) to look seriously into the issue. And 150 of these MPs weren’t satisfied to wait for next year when the new body is set up for low-income customers to get the protection which citizens in much of Europe and North America already have. 

Oh, and Stella Creasy MP, who initiated the debate, especially thanked all the activists who took part!

To help raise awareness of this issue in your area, please spend a few minutes writing to your local newspaper’s letters page. Please visit this special web page now - it will find the details for your local paper, and give you some ideas of what you can write. 

 

 

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Friday, 8 April 2011

When moneysaving doesn???t save you money - @CashQuestions

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Image: graur razvan ionut / FreeDigitalPhotos.net

 

You can hardly open a paper or look at a website these days without a section on moneysaving tips and tricks. But “moneysaving” doesn’t always save you money – and here’s why.

A restaurant voucher that gives you two meals for the price of one doesn’t save you money if you would otherwise have eaten at home. Likewise if you add extras such as puddings or drinks to a basic two course “deal”.

A store card offering 10% off your initial purchases doesn’t save you money if you otherwise wouldn’t have bought as much in that store. Or if you go on to pay interest on your bill because can’t afford to pay off the whole balance on the card.

A free printer with your computer doesn’t save you money if the printer is a poor brand and eats ink. A free printer with your computer doesn’t save you money if you buy an inferior computer in order to get the free printer and the computer goes wrong.

Travelling across town to fill up your car with petrol at a cheap filling station doesn’t save you money if you use extra fuel to get there.

£20 off a jacket at a fancy shop doesn’t save you money if you need to buy a skirt to go with it.

£10 off your shopping at an upmarket supermarket doesn’t save money if you end up paying more than your usual bill at a low cost outlet.

Anything reduced in price in the sales that isn’t your colour or doesn’t fit is a total waste of money, however much the reduction.

A cheap flight that takes off from a distant airport and lands three hours’ bus ride away from your destination doesn’t save you money if you need to pay for the extra travel and you lose part of your holiday in travelling time.

A bargain foreign exchange company that offers a fantastic rate for your travel money doesn’t save you money if it goes bust and leaves you out of pocket.

But don’t rule out convenience where time is at a premium. A supermarket ready meal could possibly save money for a highly paid executive pursuing a lucrative contract who needed to stay late at work, meaning they didn’t have time to shop for fresh food.

The exact same ready meal would be a total waste for anyone who spends a lot of time at home, who would do far better making efforts to cook more nutritious and cheaper food for themselves if they want to save money.

Low cost supermarkets keep their prices low by employing the minimum number of staff - so you can expect to queue at the checkout. They tend to cater for people for whom time is less important than those who use other supermarkets. If you want a guarantee that there will never be more than two people in front of you in the queue, choose another supermarket but also expect to pay more for your shopping.

By all means use vouchers and deals if you would have bought those particular goods or services anyway. But do remember that saving is not about “money off” and “two for one”. That’s a marketing ploy to suck you in and to encourage you to end up spending more. Saving is about meeting your needs in the most cost-effective way.

 

 

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Tuesday, 5 April 2011

Family Meals for Much Less than a Fiver - Quinoa Soup

Quinoa is a grain like food that is economical, healthy and easy to cook.You can buy it in packets from supermarkets and health food shops. 

High in protein, vitamins and minerals it is an excellent food with many health benefits.

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I made this delicious soup from quinoa. It is quick and easy to make. It serves six and costs between £1.50 and £2 (33p each). A 500g pack of quinoa was £2.84 from our local health food shop.

You will need:-

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170g  quinoa   -  50p

500ml cold water

3 tbsps olive oil

1 Large leek, chopped   - 50p

1 onion peeled and chopped - 15p

2 cloves garlic, crushed

1 carrot, finely chopped or grated - 10p

1 litre vegetable stock

1 400g tin of chopped tomatoes  - 33p

1 tsp Parika

1 tsp chilli powder

1 tsp cumin

1 tsp mixed herbs

Wash the quinoa and drain. This is to get rid of the saponin that coats the seeds and can cause them to taste bitter.

Cover the quinoa with cold water, bring to the boil and simmer for 5-10 minutes. Meanwhile heat the olive oil in a saucepan and fry the onion and garlic for five minutes. Add the leek and fry for a few more minutes. Add the chopped tomatoes and stock along with the herbs and spices. Drain the quinoa and add to the mix. Bring back to the boil, stirring occasionally and simmer for a few minutes. Adjust seasoning, and serve.

Do you have quinoa recipes to share?

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Monday, 4 April 2011

76% of US payday loans driven by repeat business

Financial products and services which solve short-term debt or cashflow problems with a new layer of borrowing pose the greatest threat to our economic recovery and well-being. They are an abomination, parasites of the downturn!

Their capacity to convert a household in moderate financial difficulty to one that is comprehensively insolvent and overindebted to the point of homelessness - starvation even - should not be underestimated.

From the left wing perspective, what hope is there is an age of austerity for middle income households becoming welfare dependent? Will the capacity for social mobility still be there to revert this downward trend?

From the right wing perspective, when middle income households cease to repay debts to the start -ups and SMEs on which the recovery is counting, where will the revenue to create jobs come from?

In 2010, Consumer Focus told us that the UK Payday Loan market had grown 400% in four years. We've even seen Payday APRs soar from 1500% in 2008 to 4000% in 2011.

This level of growth is the antithesis of everything else that is happening in our economy. Whatever your politics, it is rapidly spreading cancer, which demands incisive surgery right now.

Friday, 1 April 2011

@CashQuestions on The Joy of Basic Bank Accounts

Readers of the Zero-credit website will have spotted that we’re in favour of living your life without credit. The clue is in the name. That’s because obtaining credit can really mean, in a quirk of our wonderful English language, “getting into debt”.

 

The simplest way of not using credit is to always use cash – to be paid in cash and to pay with cash. No plastic, no credit agreements, no hire purchase, no loans and no “take home today and pay in 36 months’ time” deals. Sticking with cash can be a good idea as studies have shown that handling notes and coins is a much better way of keeping a grip on your spending when you can actually count how much of your hard-earned you have left.

 

The trouble is that life is not that simple and people who restrict themselves to cash transactions can find themselves badly disadvantaged, particularly as utility providers and retailers give the best deals to those who pay by direct debit or shop over the internet.

 

The answer to this problem is the very underpromoted “basic bank account”.

 

Most high street banks provide these accounts. They were first introduced some years ago to try to combat the problem of “financial exclusion”. This was the unpleasant fact that people who weren’t good for credit either because they were on low incomes or had a poor credit history weren’t able to take advantage of traditional banking services.

 

Basic bank accounts were invented as the solution. These accounts might look unappealing because they don’t offer overdrafts or cheque books or other fancy bells and whistles, but for Zero-credit fans that’s exactly what is good about them.

 

Here’s why:

 

They provide a safe home for your money. Your money is in a secure place until you need it (much better than a tea caddy on the mantelpiece). If you lose your card it can be replaced – unlike the contents of your wallet. In the unlikely event of the bank going bust, your cash is protected by the Financial Services Compensation Scheme.

 

You can have your wages or benefits paid into them.

 

You can access your cash from any ATM (make sure you use a free one and not one that charges you to withdraw your money).

 

Many accounts allow you to make cash withdrawals over the counter in a bank branch or at a Post Office as well.

 

You can use your account to set up direct debits and take advantage of lower charges from utility companies and telecoms providers to those who pay in this way. (But you must ensure you have funds in the account or you may be charged a fee if a direct debit “bounces” and your account could be closed if you let this happen more than once.)

 

You can pay in cheques and accept direct transfers from other bank account holders.

 

You may be able to use basic bank account cards for shopping. While some basic accounts offer only cash cards for withdrawals from a cash machine, some also offer debit cards, so you can use them in shops and for buying things on the internet.

 

They don’t offer overdrafts so you can’t get into debt.

 

While the cards are not credit cards and don’t offer what is known as “Section 75 protection” meaning that in many circumstances you can get your money back if the supplier of the goods or services that you have bought doesn’t deliver, you may be able to ask for a “chargeback” and get your cash back that way – something you can’t do with a cash transaction. (Google “Section 75 Consumer Credit Act” and “chargeback” if you don’t understand these terms.)

 

You can get statements of how much is in your account – by post or via an ATM, depending on the account.

 

There’s no minimum payment needed to open an account.

 

The best thing about them is the accounts are free.

 

Compare the benefits of basic bank accounts with the much-hyped prepaid cards that are widely advertised as being suitable for people who don’t want or can’t get credit

 

Prepaid cards are not free. You have to pay something – an application fee, a monthly fee, a fee for topping up or withdrawal or an inactivity fee (they all have a different charging structure, and the charges can mount up).

 

You have no Section 75 protection as they are not credit cards.

 

Your money is not protected by the Financial Services Compensation Scheme if the company holding your money goes bust. You could potentially lose the lot.

 

You may be able to have your wages or benefits paid on to the card – but why would you want to have your wages paid to a fee-charging card when you can have a basic bank account for free?

 

Most people can have a basic bank account. The only people who seem to be universally excluded are people with a record of fraud or moneylaundering. Many banks won’t accept people with a history of bad debts, though most do. Most will not accept undischarged bankrupts – but one or two do, so even a catastrophic credit record doesn’t preclude you from applying for an account.

 

You can get more information about basic bank accounts, which banks offer them and which services they offer, here:

 

 

When you go into the bank, make sure you ask for a Basic Bank Account by name, and don’t get fobbed off with another product.

 

 

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Extra! Extra! Read all about it!

Annie_shaw

Leading personal finance journalist and director of Cash Questions, Annie Shaw joins the Zero-credit editorial team!

Annie was so impressed with our no-nonsense approach to credit that she has offered to share her formidable experience as a guest contributor. With due credit to such expertise, Annie is now the only contributor we have ever allowed to post directly to our Finance Section. Later today, we'll be publishing her first post (if there's no link yet, this is truly hot off the press!). 

We're regularly inundated with requests to post to Finance because of course there's money to be made in offering discounts and deals, but we can trust Annie to have none of that!

A highly-respected industry figure with 20 years' journalism experience, Annie is the former editor of the Sunday Telegraph's property section and has been a staff journalist for The Times and financial agony aunt for the Independent on Sunday. She is currently a freelance personal finance writer for a range of national newspapers, and a frequent broadcaster on personal finance and the credit crunch on radio and television. Annie writes the Money Matters section for the Daily Express, holds a full Financial Planning Certificate and, in 2007, was shortlisted for headlinemoney's Consumer Champion of the Year award.

With news like this, it looks like a share in Zero-credit is the investment to have!

 

Want a say in how we do things?

For £1 a year, Zero-credit membership
is open to anyone, 
aged 16 or over
with personal experience of borrowing.

Alternatively, if you're a business, why
not support our Research & Development

Come on, join us today!