As the finance industry appears to be pulling out all of the stops to win back the hearts of the UK consumer, the news announced recently that MasterCard, one of the World’s most well-known, widely accepted payment cards brands have agrees to significantly reduce the fees that they have been charging to banks across Europe. The hope is that these savings will be passed on to the consumer in compensation for some of the hefty fees that had been imposed in autumn of last year. MasterCard had been under considerable pressure to reduce their fees and eventually have bowed to the weight of public opinion as we well as no little pressure from the European Union to reduce their fees. Pressure that appears to have borne fruit with the announcement that MasterCard will reduce their fees to the banks by 50% at least temporally. Estimates are that their generosity will be worth around £15m a year on MasterCard transactions in the UK.

In another move that might appear to be an effort to buy time, representatives of the major UK’s banks have petitioned the House of Lords to appeal against a recent judgement on inflated bank charges that was awarded against them after appeal.

The move comes after the High Court had decided to allow the Office of Fair Trading (OFT) to investigate the legitimacy of excessive overdraft charges levied by banks on individuals or business that had exceeded their overdraft levels. This test case has already been going on for 18 months, and with no end in sight due to possible delaying tactics by the banks, many tens of thousands of similar cases have been frozen till a final decision is reached on the subject.

Another sign of increased consumer confidence is that on the FTSE, retailers were leading the way on share value increases. Analysts confirmed that stock prices in the sector were being pushed up amidst increasing speculation that the coming Budget will introduce measures designed to underwrite trade credit insurance.

Star of the day was the Home Retail Group whose shares rose by 7.8 per cent (20 pence to 242) Not far behind were Kingfisher whose shares rose by 4.8 per cent (8 pence to 157) Major high street fashion group, Next Plc also fared well rising 6.5 percent (91 pence to 1410)

The mobile phone and internet company Vodafone had a good day on the news that interest was remaining stable in the UK market. Shares in the company began to surge forward rising by 4.4 percent (6 pence to 128)

The commodity market also was positive with the “diamond of the day” being Randgold Reserves whose shares rose by 5.4 percent (200 pence to 3883). The rise was in anticipation of the release of the company’s annual report due today, which is expected to include details of the company’s successful Massawa gold project in Senegal.

Property owners Hammerson saw their shares rise by a modest 1.6 per cent to (4 pence to 258). The rise came after speculation that the company was considering offers to acquire their Bishops Square development in the City of London.

Transport companies were also in the spotlight as they awaited news on the Government’s decision to allow them to re-negotiate contracts signed during more positive times for the UK. National Express pushed forward by a whopping 23.2 percent (43 pence to 187) with Stagecoach also doing well. Their shares rose by 9.8 percent on the day (13 pence to 131)

The FTSE 100 embarked on the first day of the second quarter of 2009 on a rise, reaching at one point its highest level since mid February, closing up 2.23 percent by 88.34 points at 4,043.95. The FTSE 250 also did well climbing 1.37 percent (89.77 points to 6,630.79)

Sterling rose conservatively against the dollar and the Euro and more strongly against the Japanese Yen and the Swiss Franc:

Pound/US dollar 1.4553

Pound/Euro 1.0977

Pound/Japanese Yen 144.04

Pound/Swiss Franc 1.6676
Wall Street enjoyed its second consecutive session of gains as stocks rallied after some early uncertainty regarding the state of the economy.

The Dow Jones Average rose 152.68. to close at 7761.6. Nasdaq also rose 23 points to 1551.6

The rises came despite figures announced showing that around three quarter of a million Americans has lost their private sector jobs during March, which is more than fifteen percent above the figure expected. Long term confidence however allowed the stock prices to rise.

Crude oil prices fell on Wednesday large due to a very significant drop in Japanese energy consumption. Demand of oil in February was at its lowest level since 1970, causing US oil inventories to reach a 16-year high. Crude oil is now trading at less than $50 a barrel on average

According to a recent survey, the Chinese manufacturing sector continued to shrink and it has now been eight months since the index has actually risen.

• Finovate Demos - Part 3 Here's another round of my notes from yesterday's Finovate demos....
• Take Personal Responsibility for Your Retirement it is Your Problem I am not sure where I fall on the issue...
• Check Out These 5 Points To Remember Prior To New Company Formation Do you have a clear idea what your business is...

Tags: Credit, Credit Crunch, Financial News, MasterCard, UK Credit Cards

At one time, before the credit crunch implosion was ever thought of, credit cards seemed liked a really good idea. And the truth is, it still is. If placed in the proper hands.

However, in the days of easy credit, things got very out of hand. Credit card companies, on the constant look out for more paper profit, began to offer unreasonable levels of credit to the UK public, too many of whom took up the temptation to live now and pay later, without taking into account the long term implications. And the implications for too many people, especially young families starting out in life, is that they will be facing a future filled with uncertainty and debt.

However this situation appears to be drawing to a close thanks to proposed UK government legislation that will see an end to credit card company’ practices of raising a customer’s spending limits on their credit card without them requesting it. Another recent marketing tool that the credit card companies have adopted recently is to send cheques by post to their customers, These cheques, always unsolicited, present tremendous temptation to people who are struggling to make ends meet to “borrow their way out of trouble” Instead, they are only placing themselves in deeper financial trouble in the long term.

APACS, the UK trade association that provides a forum for financial institutions to discuss issues relating to the payments industry hastened to announce that its members did not raise the credit limits of borrowers with known financial problems. Currently it is estimated that credit card debt in the UK stands at a staggering £53 billion.

Consumer Affairs Minister Gareth Thomas has expressed his concerns, both on the amount of credit card debt in the UK. With the average adult carrying a debt of close to £2,000 in addition to their other financial commitments.

” We are concerned that people may be tempted to borrow irresponsibly if credit card companies increase borrowing limits without this being requested by customers, or send out unsolicited credit card cheques,” said the Minister “It’s vital we protect consumers at this time and we are exploring these issues carefully,” he continued.

A new code of practice for the credit card industry, instituted back in the 2006, imposed on credit companies to carefully assess a customer’s suitability before sending out cheques or raising limits without solicitation on behalf of the customer. They were also requested to explain clearly the implications and costs of taking up these offers. However, in practice, most people see these offers as a lifeline and find it difficult, if not impossible, to refuse.

• Ten Steps to Disputing a Credit Card Charge Many people who have credit cards and use them regularly...
• Is Dave Ramsey Right? Are Credit Cards the Cigarettes of Finance? I've been listening to Dave Ramsey's radio show on my...
• How to Use a Credit Card to Save the World Author Bio: Ally is part of the team that manages...

Tags: Banking, British Economy, Credit, Credit Crunch, Debt, Financial News, UK Credit Cards

If you can compare the current global financial crisis to a giant tidal wave carrying all before it, then it might be encouraging to take note that in the tail drift, tiny glimmers of hope are beginning to rise above the surface of the calmer waters while no one was looking. Financial experts ( what would we do without them) are blithely predicting that the World’s leading financial institutions are yet to lose the other half of their asset value, and until they do, the real financial recovery cannot begin to take place.

However there the first signs of a minor recovery in consumer spending among those who have realized that we are in the beginning of the biggest buyers market of all time, and there are bargains to be had, especially in the property market.

Figures issued yesterday showed that mortgage approvals in December 2008 jumped by 27 per cent from the previous month (22,051 from 17,339). This upturn in the property sales, mostly in the second hand sector, is being regarded as a cautious step in the right direction, although November 2008 approvals were among the lowest in recent history. In the “boom years” of the property market, e banks were handing out 80,000 mortgages in an average month, with almost a 100% approval rate. In other words, you turned up at your bank, you asked for a mortgage and you got it. In today’s uncertain climate, the approval rates are much lower, although the banks seem reluctant to release specific figures.

Figures released yesterday also showed that re-mortgage approvals were on the up by just a few hundred in December, along with increased activity in the buy-to-let and equity release mortgages sector of the property market.

These figures show a level of cautious optimism against the backdrop of what was a horrendous year for the UK mortgage industry. Total lending for 2008 came to £170 billion, down almost 25 per cent from the previous year, with the number of loans approved for house purchase down by more than fifty per cent.

In the US, slightly against expectations, house sales were also on the rise in December, a sure sign that buyers were taking advantage of the serious reduction in the prices of property caused by the credit crunch.

Sales of second hand properties rose by 6.5% in the month. Bearing in mind that December is usually one of the weakest months of the year for property transactions, this upturn shows that a gradual recovery may be beginning to get under way in the United States.

Second hand property prices fell by 15.3% in December from the previous years. One disturbing note to this optimism is that almost half of transactions that took place in December fell into the category of “distress sales”, where the seller needed to dispose of their property under pressure and was forced to reduce the price considerably.

Experts are now waiting till spring to see if this trend will continue, especially in the second hand market.

Other signs that the UK consumer is increasingly taking their share of responsibility in getting the country out of its largely self imposed mess are that the collective balance due on credit card debt in December 2008 fell by £218 million while outstanding balances on overdrafts and bank loans fell by £135 million in the same month.

• Why You Should Avoid the Overhyped, Breaking News Stocks Believe it or not, there are a select group of...
• Commercial Real Estate Q&A #3: Running from Hotels and Successful Commercial Real Estate Investing Strategies Steve Maxwell's take: I also prefer commercial RE over residential...
• Introduction to Mortgages pt 3 of 5 This is part three in a five part series on...

Tags: Credit, Mortgages, UK Bank Accounts, UK Banks, UK Credit Cards

Today’s credit crunch spotlight is shining on high street department store group Debenhams.

The firm is seeking to raise more money from investors to aid cash flow, reported the Financial Times.  Trading problems are on the agenda for the next Debenhams board meeting on January 6.

Also struggling to cope with the bills is the Globe Pub Company, which is appointing ‘restructuring consultants’ after admitting difficulties in meeting payments and is close to breaching loan agreements.

In a quarterly update to bondholders, Globe, which owns 424 pubs, said operating profits for the 12 weeks to 29 November had plunged to £5.3m, down 20% on the same period last year. Meanwhile the cost of servicing debt had risen 2% to £4.4m.

Thousands of families are waiting to hear from photographers Olan Mills whether they have lost portraits and gift boxes they have already paid for. The chain, with 34 outlets mainly in Mothercare stores has collapsed and ceased trading.

An administrator will be appointed and the company says it was “endeavouring” to fulfil all outstanding orders and post photographs direct to customers’ homes during January.

People who have bought a gift box or voucher from Olan Mills become unsecured creditors who need to register claims with the administrators – giving a slimmer chance of a refund. Customers who paid by credit card should contact their credit card company.

Parity between the Pound and Euro is becoming more of a reality as sterling values ebb on the back of low interest rates and fears for the state of the British economy.

The Bank of England is expected to reduce interest rates to 1% or less next week, which will put more pressure on the currency markets.

The Pound closed at 1.0389 Euros, down ever so slightly from 1.0390. The Pound remained at US $1.457.

The FTSE was up 102.8 points from 4216.6 to 4319.4 and the DOW closed down 319.4 points at 8483.93from 8515.87.

• Understanding Credit Solution Companies Many of the people that would like to find a...
• Is My Credit Repair Company Legitimate? Rebuilding your  credit can be a lengthy process. Rather than...
• My Ten Year Run of Ripping Off Chase is Over... Time to Rip Off Chase... Wait, What? For more than 10 years I've been skimming money off...

Tags: Bank of England, Debenhams, Globe Pub Company, Intrest Rates, Mothercare, UK Credit Cards

The Great VAT Con comes in to effect today – most people believe that a 2.5% cut in VAT from 17.5% to 15% means a £2.50 drop in prices for every £100 spent at the tills.

Let’s demonstrate the con with some basic maths – £100 plus 17.5% is £117.50.

A 2.5% cut in VAT to 15% is not £100 plus £15 equals £115.

Why not? Because that 2.50% cut only chops £2.10 off the price.

So the great giveaway to encourage extra spending is not so great, and worst of all, the Chancellor Alastair Darling has spun the move to make everyone feel better in a bid to loosen purse strings.

The problem is the Government is following the doctrine of Keynesian economics that put us all in this mess in the first place. The great economist John Maynard Keynes talks about the ‘paradox of thrift’.

Basically this means people stop spending and hang on to their cash in a recession because they want liquid assets handy in case they fall on bad financial luck – as if a recession wasn’t bad enough luck.

This makes the recession worse because businesses can’t sell their products, so output declines even more, making the recession worse. The economy is stuck in an ever-decreasing circle until circumstances allow people to spend again. 

That’s why the Government wants us to spend their way out of recession to counteract the paradox of thrift.

The question is, have they done enough to kick-start the economy or will the whirlpool continue to suck in jobs and businesses? One the whole, it looks like too little.

After a week of more bad news in the High Street, with Woolworth’s and MFI going in to administration and B&Q closing nine trade depot superstores, the John Lewis partnership’s weekly trading report shows a continuing downward trend.

For several weeks running, the report has showed a consistent 13% year-on-year fall in sales.

Other big names teetering on the bring are electronics conglomerate Curry’s and PC World after announcing £15 million losses, Clinton Cards, Land of Leather, and DIY giants Focus and Fads. 

The car industry worldwide is gripped by crisis as all the big carmakers in the US, Japan and Europe undertake cost-cutting exercises. 

The ‘nationalisation’ of the Royal Bank of Scotland completed last week, as the taxpayer now owns just less than 60% of the bank.

On the housing front, Nationwide Building Society released figures showing house prices had fallen only 0.4% in November – a 13.9% year-on-year drop.

The markets were a little more forgiving last week.

The FTSE100 continued a slow recovery from the five-year low of 3665 on October 27 to finish last week at 4288 – a rise of 15% over the month.

Wall Street bounced back from 18.5% from a 12-month low of 7449 the previous week to close at 8229 on Friday.

On the money markets, the Pound strengthened slightly to £1.49 against the US dollar. Against the Euro, the Pound moved slightly from £1.18 to £1.19.

• Alliance & Leicester
• Barclays
• Capital One
• Child Trust Fund
• First Direct
• HSBC
• Post Office
• Tesco Savings

• 30 Day Cleanse: Video of Day 1 I was contacted by someone I respect with the idea...
• Salton Sea, North Shore, CA Salton Sea is located in: North Shore, CA Phone: 760-393-3052...
• Year End Income Tax Guide (Part 2) This is the second part of Mr. ToughMoney Love's year end...

Tags: Alastair Darling, Bank of Scotland, British Pound, Budget, Chancellor of the Exchequer, Nationwide, Tax, Tax Cuts, Tax Payer, Tax Time Bomb, UK Credit Cards, UK economic activity, Uk in recession, UK Recession, VAT

Get supermarket smart

All the high profit margin goods are placed at eye level in supermarkets. So you know that the cheaper goods are higher up and lower down. Try to pick your products from these areas. Always have a list before you go shopping and never go shopping on an empty stomach.

Get a great deal on utilities

Try www.uswitch.com to go through all your utility providers and try to find a cheaper one. This can save you a small fortune every month.

Have a ruthless budget

If you don’t have a budget that you use, you are missing a huge opportunity. Each week or each month, keep a strict eye on what you’re spending and cut out any excess spending to increase your savings or pay down debt faster.

Get rid of debt

Get rid of the most expensive debt first, usually credit cards. Once you’ve done that, get rid of loans and then start to build up your savings account. Start with high interest cash ISA and work from there. Once you’ve maxed that out, it’s time to start to invest. Believe it or not, this is a great time to invest. It isn’t just supermarkets that are having sales….stocks and share have rarely been cheaper than they are right now, so if you have a decade or two to sit on your money, you could grab a real bargain right now.

Try to get free nights out

Go to book launches, free lectures, art exhibitions, local band nights…anything that doesn’t require a cover charge and where you can bring your friends and have a bit of fun. It doesn’t have to cost money to be enjoyable!

• Receive Your Free Stock Quote First Before Trading Stocks Free stock quotes are valuable for looking at your investments...
• 6 Steps to Get Back on the Right Financial Track Millions of Americans have found out this year that they...
• Starting Your Brand It is really easy for well known people to make...

Tags: Budget, Credit Crunch, Debt, Loans, UK Credit Cards

There are many things that households can do to beat the credit crunch. Let’s look a few of them.

One woman, English teacher Kath Kelly (admittedly after a drunken bet) lived off just £1 a day for an entire year! She collected dropped change on the street, gave up her mobile phone and went to open lectures at Bristol University and ate the free buffets. She went into grocers and butchers at the close of business and picked up cheap food and shopped at jumble sales. Not only that, but she managed to hitch hike to her brothers house in France for a holiday in the middle of it all! She has a book out called “How I lived on just a pound a day”, published by Redcliffe at £6.99….or one week’s income.

Use cash back sites

Many sites will allow you to claim back some of the commission they receive. These are referred to as cashback sites. Some of the savings can be substantial so if you are making any online purchases, check with them first to see if you can get a better deal. Just Google UK cash back sites for a wide choice.

Drive a hybrid

We all have to make journeys of some description so how about turning in that expensive car for a nice economical hybrid? The cost of a hybrid will soon be offset by the substantially lower running costs, including reduced road tax!

Use a fuel search website

Search http://www.petrolprices.com/ any time you need to fill up and arrange a journey to get you close to the petrol station in question. Don’t under estimate the amount of money you can save over a year by using this type of website.

Get a cash back credit card

With Christmas coming, why not get a credit card that offers cashback? There are plenty of them about and they only need a little research. Some pay as much as 5% cashback and at Christmas when you could spend thousands, why not get the cashback and give yourself a nice little.

• Learn How To Make An Impact With Your Blog Commenting Every webmaster and blogger relies upon traffic generation for success...
• Think You're Having A Hard Time Growing Traffic To Your Brand-new Internet Site? You'll find TONS of ways to build up your visitors....
• Money Merge Account Analysis Pt 15 The agents for the Money Merge Account are focused on...

Tags: Cash Back, Christmas Spending, Credit Crunch, Fuel, Fuel Costs, Hybrid, Kath Kelly, Petrol, Road Tax, UK Credit Cards

The lending business has come a long way from the days of illegal loan sharks and shady business transactions. In fact, taking a loan has become a common and beneficial financial choice for thousands of people around the UK. These people, like you, are looking for some financial assistance to help them get through a difficult time or achieve their life’s goals.

Looking Back on Lending

Of course, no one can really say where the history of lending began. It is likely that people have been creating loans for as long as there has been the concept of ownership. Yet, the official history of loans has been documented for at least several thousand years; forms of creating loans were evident in ancient Greek and Roman times, and monetary loans are even mentioned in the Bible.

One of the earliest forms of lending is the indentured loan (otherwise known as the “indentured servitude”). It was initially practiced in the Middle Ages and throughout the 19th century. Indentured servitude allowed poor individuals to borrow the money they needed for expenses such as travel and real estate. The money was usually borrowed from a wealthy individual, such as a land owner, and the borrower would have to work off their debt over the course of several years.

Unfortunately and predictably, many land owners were dishonest and would greatly inflate the debt or would continue to add provisions to the debt long after it had been repaid.

The Advent of Banks

It eventually became very clear that dishonesty in indentured servitude was becoming a rampant and a growing problem. As an alternative, individuals known as “moneylenders” became an important part of money lending and loans. In fact, it is from these moneylenders that today, people use the terms “bank” and “bankrupt”.

These moneylenders, who were initially Italian, would set up benches in the local marketplace or “banca”, known as bank in English, and would charge interest on their loans at a rate that they set. Sometimes these moneylenders would become successful and very wealthy. However, those who did not become wealthy and left the business became known as “banca rupta”, or in English “bankrupt”.

Modern Loans: The Evolution

Fortunately, things have come a long way since those marketplaces in Italy. The business has become more refined and respected – and most importantly – fair to its customers. Interest rates are much more controlled, and detailed regulations must be met. The modern banks, finance companies, and online lenders that provide loans to the public and private sectors provide a great service to the world economy.

Today, lending has never been easier and simpler. No longer are people financially wasted by taking out a loan – loans can actually help build wealth. Best of all, you won’t be put to work on a wealthy landowners’ farm to work for several years! Lending has sure come a long way.

• Prosper Ordered to Cease and Desist by SEC http://www.sec.gov/litigation/admin/2008/33-8984.pdf It appears to me that the ruling is that they...
• How to Earn Superior Returns with Lending Club Being average is not that impressive. To be better than...
• Paying Off Loans Too Early Hurts My Lending Club Returns As you have probably gathered by now, I am in...

Tags: Bank, Banking, Current Account, Loans, Money Management, UK Credit Cards

Legal advocates and many institutions are imploring people to be wary of situations in which their personal information can be stolen. When details about your life, your identification, and your financial situation fall into the wrong hands, they can lead to you becoming a victim of identity theft. This is a very serious concern, which costs individuals, businesses, and the government a great deal of money and time.

There are several ways that we are all encouraged to protect ourselves and prevent identity theft from occurring. Here are a few of the easiest protection habits that you can implement:

• Never share your personal information with anyone outside the relevant institutions. This means not giving out your banking codes and asking for confirmation whenever someone asks you for such details.
• Securely destroy old documents. Identity thieves are not above looking through the trash – in fact, it is one of the best places for them to mine information. A few scraps of paper, each with a different bit of information on them, can quickly lead to a stolen identity when they fall into the wrong hands. Instead of simply tossing old documents, use a shredder.
• Be safe when using the internet. The internet is becoming a quick favourite with identity thieves. Phishing scams, stolen passwords, and other hacker activities can lead to the theft of your personal information. Protect yourself by installing the latest version of antivirus and be wary of sites that ask for too much information.

By following these simple strategies, you are making strong strides toward protecting yourself and ensuring that you never become a victim of identity theft. Unfortunately, even the most vigilant can be victims of bad luck or poor timing.

For example, in a major recent event the Child Benefit Agency lost the personal details of every parent who receives child benefit. This information included their names, addresses, dates of birth, national insurance numbers, child benefit numbers, and bank account information. This is a substantial amount of very sensitive data and this catastrophe has put about 25 million people at severe risk of identity fraud.

Unfortunately, situations like these undermine the public’s faith in the institutions they are meant to trust. In a recent survey by Canvasse Opinion over 30 per cent of respondents states that they did not trust the government to safeguard their personal information.

Yet, this information must be shared with at least some institutions. This is why it is not only important that you make it difficult for identity thieves to get your information, but also that you monitor your personal information to identify any security breeches.

The following are some ways to identify a personal identity theft issue quickly. You can use these strategies any time that you have reason to suspect that you are at risk, or simply make them part of your regular routine to reassure yourself that your identity is safe.

1. Monitor your bank account. When you receive your bank statement, you should take the time to look at more than just your closing balance. Review the statement a little more carefully and watch for any unfamiliar transactions. Remember, identity thieves can be very smart and sneaky in the way that they steal your information and your money.

2. Review your credit report. With the right information, an identity thief can apply for loans, obtain credit cards, or even mortgage a home in your name. This information can also allow them to purchase credit-based services such as mobile telephones and catalogue accounts. Unfortunately, unless the bill collector comes directly to you, these activities can go on for a long time without your knowledge. A quick review of your credit report will confirm the types of loans that you have secured and also the ones that have been applied for recently. By reviewing this document, you will be able to identify any problems quickly and make quick steps to fix them.

3. Change your bank and credit card account passwords regularly. You should already create account passwords that are difficult to break (they should not be personal ones, such as your child’s name, or easy to figure out numbers like sequences). Yet, this is not quite going far enough; you should also schedule yourself to change your passwords regularly.

• 5 Significant Strengths To Credit Card Processing For Little Corporations With the proper product or service or service, even the...
• Four Crazy Credit Card Scams Guest Post Author Bio: The following post comes from the...
• Phishing, Smishing and Vishing: Tips to Help Your Customers Avoid These Scams It sounds like the title of a nursery rhyme you've...

Tags: Bank, Banking, Current Account, Identity Theft, Money Management, UK Credit Cards

Opening an account for your child is an excellent way to introduce them to the world of finance. Many parents do it with the hope that their child will learn the value of money management early, and will look after their financial situation in adulthood as a result.

Benefits

Young children (and sadly, some adults) buy into the idea that “money grows on trees”. Most parents reach a point where they would like their children to understand that the cost of living must be paid for with work, and that unless the money is budgeted carefully it can run out.

By introducing your child to the concept of budgeting and banking, you may just find they have a completely new respect for you and your money.

Spending Account, Not Savings

If you open a savings account for your child and keep it under lock and key, you will not be teaching them any sort of lesson. Although savings accounts are certainly valuable (and much appreciated once the child has grown), they are not as useful of a learning tool, because the child never gets to make decisions regarding the money’s use.

Instead, open an account for your child that is meant to have money go in and come back out. The amount of freedom that you give your child with respect to this account will depend on their age. If you are starting young then it is appropriate that all purchases and withdraws be cleared through you first. However, be careful not to be too strict with the rules. Allowing your child to make mistakes now, when the costs are low, is much better than when they are an adult.

Account Features

Your child’s account should be the most basic one possible. There is certainly no need for any credit features such as overdraft and cheques are likely not a good idea. The concept of this type of account is that your child understands that once the balance reaches zero, they will no longer have any money to spend.

When Cash is Better

Before your child is able to understand the value of money in a bank account, it is important that they fully grasp the value of the currency. We have all seen a child who is drawn to coins rather than bills, ascribing the heavy, pretty items with more value and willing to trade a note for a coin.

Until your child can understand the relative value of the money itself, they are unlikely to understand how a bank statement can have any worth. So, before opening an account for your little financial planner, start by giving them a variety of currency and help them to understand the relative purchasing power of each denomination.

• 5 Pieces of Advice to Tell Your Child About Money- Part 4 5 Pieces of Advice to Tell Your Child About Money...
• How to Estimate Coin and Paper Money Values Collecting currency is a lot of fun for a large...
• Are Your Children Saving For Retirement? [The following is a guest post on behalf of Money...

Tags: Bank, Banking, Current Account, Money Management, UK Credit Cards