PERSONAL FINANCE NEWS
CONSUMERS PAYING OFF CARDS FASTER
Data from the British Bankers’ Association shows that the number of credit card purchases has been on the rise over the last year. While there were 158m purchases on cards in August 2009, July 2010 saw 169m and in August this year consumers upped the number of purchases to 173m. But balances dropped 5.3 per cent over the same period from £64.1bn in August last year to £60.7bn this August, so even though consumers are using their cards more, they are paying off their debt quicker. Confused.com’s head of credit cards Chris Griffiths remarked on the data: “Customers who use their credit card as a means of spending should seriously consider the additional benefits offered by a rewards credit card. Users can earn air miles, cash-back, or shopping points from their spend.” As examples, Confused.com recommends the Lloyds TSB Airmiles Duo, the Amex Platinum Cashback and Sainsbury’s Nectar Card.
SMALL FIRMS BAILED OUT BY FAMILY
Research by More Than Business reveals that small businesses are turning to friends and family to stay afloat during times of tight credit. Eighteen per cent of small firms surveyed say that they have been forced to seek alternative forms of credit outside the banking system. These other sources include 7 per cent using credit cards, 7 per cent going to loans companies and 10 per cent borrowing from friends and family. Inflation is also contributing to small business woes, with business costs like professional services and advertising having risen 4.9 per cent in the last year. Mike Bowman, head of More Than Business says: “Small firm cash flow is suffering and in a slowly recovering economy, some small business owners may be unable to rely on financial support from banks. As a result, they have to look elsewhere for the cash injection they need to survive.”
BARCLAYS MOBILE BANKING ROAD-SHOW
Russell Square was invaded by Barclays bank managers yesterday as they gave demonstrations of how to use the bank’s new mobile banking service. The service allows customers to check their balance, view statements, find their nearest branch or ATM, make transfers and set up third party payments while on the move. The event was the first in a series of road-shows that will pass through Harrogate, Cardiff, Colchester, Manchester and Birmingham. Barclays digital banking director Sean Gilchrist said: “Research has also shown that people who use mobile banking are more in touch with their bank balance and have a better grasp on their finance.” Mobile banking has yet to take off in the UK despite being increasingly widespread in poorer regions such as sub-Saharan Africa, where many consumers already use their mobiles to transfer money – often without the need for a traditional bank account.