Is our money in safe hands?
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These days, we're not just customers of banks, we own some of them. Which is why we're more interested than ever in how they treat us. We know from your emails how worried some of you are about where you're putting your money. And you already suspect that some banks have now got far worse deals... and far more charges. We've been talking to you about banks and you've told us what you think, so we invited Eric Leenders, executive director of retail at the British Bankers' Association, into the studio. Watch the clip above to see why he says we shouldn't be worried about how the banks are looking after our money.
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I received a letter today from my credit card bank informing me that interest r ates are to be changed in April 2009. My current rates, printed on my statement are as follows:
Standard Purchase Rate 15.820%
Standard cash Withdrawal Rate 19.150%
These are to be increased to:
Purchases 23.96%
Cash Withdrawals 27.86%
WHAT???? A RIP OFF.
I am disgusted TLOTALLY. The banks are taking the mick, they really are.
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I believe that credit card charges are ludacris but have recently recieved an e-mail from cooperative bank which I have never had any dealings with but i do have a credit card that is linked to them as I have checked my statement then I dont know why they contacted me about security on an account I dont have with them
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Are savings protected? Well, yes, but maybe not in the way you want if you happen to have your mortgage and savings with the same bank.
In that case, if the bank fails what CAN happen (YOU don't get to decide, the administrators do) is that your cash can be "off-set" against what you owe on your mortgage.
This means you may LOSE all your cash savings (yes, even if they are less than £50,000), but you will also owe correspondingly less on your mortgage (which will probably be sold on to another institution, so you simply end up owing less to someone else!)
Unfortunately, it is difficult to buy anything with lower liabilities rather than real cash. Try it. Go into the travel agent's and say, "I don't owe nearly as much as I did before on my mortgage - though, actually, my house is also worth 20 percent less than it was 12 months ago - but I have no cash at all, I'm afraid. Can I have a holiday, please?" See what happens!
So when is your money protected, but not really? Well, for example, when you have savings with the Derbyshire Building Society and a mortgage with Nationwide, or Cheshire. In that case, you wouldn't even have made a conscious choice to take this risk. Does that sound familiar? Banks allowing or encouraging people to take risks they don't understand?...
The enlarged Nationwide will say they are not likely to fail. Fair enough. That is probably true. But that assertion is just one factor in your assessment of the risk. First things first: you have to KNOW that you are taking an extra risk (which you would not be taking if you kept your deposits and borrowings separate) BEFORE you then proceed to decide whether that risk is acceptable to you.
And the worst thing about this risk is the uncertainty: they may off-set, they may not. You can't be sure until it happens, but either way it won't be YOUR choice...
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It looks as if Mr Gordon Brown has wasted around a trillion pounds of our money to prop up the banking institutions that seem to have been headed up by individuals that were not fit for purpose.
A pity Mr Brown did'nt hand over 50k to each family in the UK and say either spend it in the UK or save it with a bank you consider trustworthy.
Problem solved.People spending on goods,shops and business's saved,jobs saved, and the banks begging us to save money and giving us a realistic return.
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