The UK’s credit card market is "open for business" once more as providers are actively pursuing new customers with a range of competitive deals.
Analysis from Moneyfacts.co.uk shows that over the course of the past year, the number of cards offering zero interest on new purchases for a period of at least ten months has risen by 450 per cent.
Meanwhile, there has been a 20 per cent increase in the availability of zero per cent balance transfer deals lasting ten months or more.
Furthermore, the site said that providers including NatWest, Royal Bank of Scotland, Barclaycard, American Express, Egg and Sainsbury’s Finance have launched reward programmes for credit card customers.
Despite the increase in competition, however, interest rates have continued to rise for the products, with the average APR now standing at 18.7 per cent.
Credit card market returns
Savings deals disappear
Savers already struggling to generate returns due to record low interest rates have been dealt another blow with the news that at least 12 best buy deals were recently withdrawn or altered in a single week.
Andrew Hagger of Moneynet.co.uk said that in the seven days from May 28th, financial institutions including Barclays, Nationwide, Northern
Rock and Chelsea Building Society either scrapped market-leading products or "slashed" their returns.
ISAs and fixed-rate bonds were among the savings vehicles affected by the changes.
He added that consumers coming off fixed-rate products offering up to seven per cent annual interest who are looking to reinvest will be forced to join the "hoards of other customers chasing a handful of half-decent accounts".
ISA sales up
ISA sales recorded their best April since 2001 this year, according to the latest statistics from the Investment Management Association (IMA).
Net inflows into the accounts stood at £1.2 billion during the month, up 63 per cent from the £700 million in sales seen during the corresponding period of 2009.
Compared with March, ISA investment was up 56 per cent from £604 million.
The IMA said that overall, the 2009-10 tax year, which came to an end on April 6th, saw the highest ISA sales since 2001-02, with savers putting aside £3.5 billion in the accounts.
This marks a sharp turnaround from the preceding five years, when withdrawals had exceeded new allocations to stocks and shares accounts.
Savings suffer
Savings were a "major victim" of the credit crunch, according to a new report.
The study by Unbiased.co.uk found that the amount consumers were putting away each quarter dropped from around £38.7 billion between April and June of 2008 to £19.9 billion between July and September – and
levels "haven’t recovered since".
In the first quarter of 2010, total saving stood at £16.5 billion, the site added.
Meanwhile, the picture for borrowing has undergone a "dramatic change" since mid-2008.
Back then, Britons were repaying £1.67 of debt for every pound saved. During the first quarter of this year, they were borrowing 37 pence for every pound saved.
However, this is down from borrowing 60 pence for every pound saved in the final three months of 2009.
Men hit by recession
Men have been hit hardest by the recession and over the past three years, a combination of higher unemployment, slowing income growth and rising household expenditure has led to a "massive increase" in the number seeking debt advice, a charity has claimed.
Figures compiled by the Consumer Credit Counselling Service (CCCS) show that since 2007, the number of men contacting the body has risen by 51 per cent.
Of these, nearly half said their debt was caused by a reduction in income, including being made unemployed.
Despite the average level of debt for a man dropping from £30,000 in 2007 to nearly £27,000 last year, higher living costs are making it harder for them to meet their obligations, with the average male CCCS client having a spending deficit of £42 in 2009.
Energy price lottery
Home owners face a postcode lottery when it comes to energy prices, with some charged up to £189 more for their gas and electricity purely because of where they live, a new report has claimed.
Research carried out by uSwitch.com found that ScottishPower customers in Cardiff using the company’s Online Reward Energy tariff pay over £1,000 a year for dual fuel, whereas someone on the same pricing plan in Nottingham is charged £842.
Overall, the comparison site said, the south Wales energy region is the most expensive in the country, with the average annual bill for gas and electricity coming to £949.
The cheapest energy region was the East Midlands, where the typical cost of household fuel was £855 a year for online customers.
£s wasted on finance items
Consumers could be wasting thousands of pounds and risking being stuck with a bad credit rating by purchasing financial products "they simply don’t need", Which? Money Quarterly has warned.
The magazine named mobile phone insurance, extended warranties and payment protection insurance among its top ten "useless" items.
It also criticised store cards for their high rates of interest, saying that maintaining a balance of £1,000 at an average rate of 29.9 per cent would cost almost £300 a year in interest alone.
The government recently said it would give regulators more power to define and ban "excessive" interest rates on store cards.
Other products in the top ten included packaged accounts, with profits investments and debt management plans.
House prices rise in May
House prices rose for the third consecutive month during May, according to the latest figures from Nationwide.
The mortgage lender said the typical value of a UK property climbed by 0.5 per cent during the month to stand at £169,162.
Quarterly price inflation, which is seen as a better indicator of overall market trends, also picked up, increasing from 1.1 per cent in April to 1.7 per cent last month.
However, the annual rate of change decreased from 10.5 per cent to 9.8 per cent in May.
Commenting on the figures, Nationwide’s chief economist Martin Gahbauer said that "housing market conditions remain characterised by thin transaction volumes and a relative scarcity of properties for sale, despite a slow return of more sellers in recent months."
House prices rise again
House prices in England and Wales recorded an annual rise for the sixth consecutive month during April, according to the latest figures from the Land Registry.
The value of the average property was 8.5 per cent higher year-on-year at around £165,000, according to the figures.
Every region of England and Wales recorded an increase in prices in the 12 months to April, with London leading the way with growth of 14.8 per cent.
Overall, house prices were 0.2 per cent higher in April compared with March.
According to the Land Registry’s most recent figures, house sales recorded an annual rise of 49 per cent in February, with over 40,000 transactions completed compared to just over 27,000 a year earlier.
86% to review savings
Some 86 per cent of savers believe it is important to review their savings given the low interest rates currently on offer, a new survey has found.
This is up from 67 per cent in October 2009, according to the poll by the Fair Investment Company (FIC).
Among those looking to review their savings, 78 per cent said they want to achieve better growth, up from 53 per cent in the previous survey.
Meanwhile, the proportion searching for increased income has dropped from 47 per cent in October to 22 per cent now.
George Ladds, the FIC’s head of pensions and investments, said it is not surprising that so many savers are looking to review their investments, given that the Bank of England’s base rate has now been at its all-time low of 0.5 per cent for 15 consecutive months.