Skiing holiday: Playing your cards right
I'm Fergus Muirhead and I'm here to answer any questions you may have about any money or consumer issues.
Please drop me a line at email@example.com with your questions. You can also read more on money and consumer issues on my own blog.
Q. I am going skiing with some friends in March and I have paid the deposit using my credit card. Does this cover us if the company we are going with fails or do I need to pay the balance with my credit card as well? Roddie McRae
A. As long as you have spent between £100 and £30,000 on your credit card, then the total cost of your holiday should be covered if anything goes wrong with the company with whom you have made your booking.
This protection is available under Section 75 of the Consumer Credit Act and applies to goods and services purchased. There are a couple of exclusions to the protection, however, that you need to be aware of, and the one that may affect you is where you buy through a travel agent.
This can be a difficult area because, for a Section 75 claim to be valid, there needs to be a relationship between the credit card company and the company providing the service, and this doesn't exist where a travel agent acts as intermediary.
Having said that, if you have booked through a travel agent you may be protected elsewhere anyway.
Q. Please can you let us know how to pay off our credit cards? I am just managing to pay the cards I have. But I also have a loan and if I could have just one monthly payment that would help. One of the credit cards has to be paid off soon but I just don't know what to do. Name withheld
A. It's difficult to be really specific here as I don't have a lot of information to go on.
Maybe some general pointers that would help anyone else struggling to make payments on credit cards and loans would be useful.
You don't say, for example, whether you are up to date with all of your payments at the moment or in arrears.
If you are up to date but feel that this might change because you are struggling to make payments, then it is essential to contact the companies concerned as soon as you can. They can only help you if they are aware that you have a problem, and it is easier to help before you have big arrears to deal with as well.
One monthly payment might well help and that would mean adding up all of your existing debts and finding a lender prepared to convert them all into one loan. It's not a bad idea, as long as you don't see it as part of a plan to continually swap one debt for another, in which case you might end up worse off.
It may be that one of the money agencies, like Citizens Advice, would be able to look at your situation and offer a bit of help. Have a look at their site at www.cas.org.uk/.
Depending on your credit history it might be possible to consolidate all of your debts in this way but whatever you do please don't approach one of the "debt management" companies that advertise in the national press. It will just cost you more money and they won't do anything that Citizens Advice won't be able to do for you.
If you want to drop me another email with more details then I'll have a look at your situation for you as well.
Q. I thought I would let you know about an error HMRC made in my favour. I was sent my Self Assessment Tax Calculation letter last week, showing that I was due a substantial refund. I knew this was incorrect, but hadn't had a chance to check it out properly before the refund actually appeared in my bank account this week. I have two employers, and pay and tax details for both were submitted in my tax return, but they have completely ignored one of them (the larger). I have therefore benefited by having the whole of my personal allowance applied against the lower of my salaries, plus the benefit of a lower rate of tax being applied.
A. This letter raises an interesting point - what do you do if HMRC makes a mistake, that you know is a mistake?
It's one thing if they send you some money that you know you are entitled to, another if they send you money that you think you might be entitled to. But how should you behave when they send you a cheque that you know that you have absolutely no right to have in the first place?
Well, the simple answer is that you should behave in the way you would expect someone to behave towards you - and in this case that means giving the money back.
It's probably also true to say that there is no doubt that HMRC would have noticed their mistake - even if it took a few years - and you would have to give the money back then anyway. So it's better to be upfront and tell HMRC about their mistake - no matter how much it hurts!
Q. We have £50,000 to invest and we are looking for a regular income from it. Have you any advice as to which institution is best for us to approach? Or would it be better to seek advice from an independent financial advisor? Andy & Jan Thomlinson
A. There are a few issues that need to be addressed here.
The first is to establish exactly the level of income you are looking for your lump sum to provide and whether this sum can be provided by "capital growth" or whether you are going to have to dip into your £50,000 to provide the income.
The alternative to eating away at the capital would be to adopt a riskier investment strategy but you may not be comfortable with this, and the amount of risk you are happy to take is also an important consideration.
The next question might be one of tax and to consider how the income you want to take will be taxed, and to do that it will be necessary to have a look at your overall income situation.
So at one level it might be simple to have a look online and find out which bank is paying the best rate of interest if you give them your £50,000.
If all you are looking for is the "best" rate of interest then you would not necessarily want to go and pay for advice.
But - and I have only the information you gave me to go on here - if your situation is any more complex than that then it might be worth going to see an independent financial advisor and asking them to put a bit of "planning" around whatever it is that you do.