The Best and Worst Financial Products in the UK

As a number of British people are struggling when it comes to everyday expenses, it would be useful to find a guide for the most useful financial products, but also for those which should be avoided and why. Saving money has become increasingly difficult, and paying off the debts seems ongoing.

The Best Products to Consider

• Savings Account

About 17% of UK citizens have no sort of savings whatsoever. The reason is that most of them simply cannot afford to have this. Those who do have savings cannot even afford the monthly mortgage rate. When you have a savings account, it helps even to contribute with little sums. It builds you a safety net.  There are different such plans tailored to suit various circumstances and budgets. If you are afraid you can't control your spending habits and that would endanger your savings, then opt for a restrictive account. This will limit your withdrawals to only a few per year and will tax you every time, or won't allow you to withdraw at all. If you want more flexibility, go for an e-savings or an instant access account.

• Debt Management

The debt charities are being are being intensively called for, since the nation can't seem to handle its debts anymore. People struggle to end the vicious circle that takes them from loan to loan and therefore from debt to greater debt. Such situations arise especially because of taking payday loans uncontrollably – the very handy solution that seduces so many, yet which gets them in greater debt if they can't handle the repayments immediately. Debt management companies help people reduce the debt to manageable payments.

• Credit Cards

Credit cards can actually help build positive credit when used correctly. Sensible usage and meeting the monthly payments makes these more useful than people would think. They can prove that their users are able to pay their bills on time, which lets the, be seen as customers with a lower risk. Credit cards also mean financial protection when you make a large purchase such as a flight ticket.

The Worst Products

• Expensive Loans

Wherever the interest rates are too high, companies may have dodgy practises. Nowadays, even students have ended up with too great loans to repay. Certain products, although very helpful on the spot, can allow companies to charge too much as interest rate. Such happens with some payday loans, and this is how this category of loans makes in both categories – the best and the worst. The key is to check how the interest rate is calculated.

• Credit Cards Bearing Interests

As mentioned, a credit card can be very helpful – if you pay all bills on time, that is. However, balances wearing interests are very common nowadays and the average rate is about 18%. Some cards may charge more than that. The most expensive is the Black Diamond Visa card (up to 59%). It is a special card nevertheless, one aimed at customers with a poor credit history and a high level of despair.

• Expensive Investments

Index trackers, for example, are regularly cheap. The annual charge can be under 1%. If the charges are high, as the years pass your long-term performance will be affected. Investing in a tracker brings about other costs as well, making that percentage higher. Even those companies that have it at 1% will eventually add the rip-off options to make you pay more. When choosing a tracker for yourself, focus on costs and stay away from funds that charge over 0.5% a year.

SusanBrinkley is a financial expert specialised in today's popular types of loans such as the Short Term Loans, offering comprehensive advice for the financially challenged. 

Share |