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| "Our Woman in Westminster" |
The thrust was about disproportionate bank charges and Tracey cited the example of forgetting to pay her credit card subscription, something all of us forget from time to time and the charge that came with it. In this case the original fine charge was £7.75 and the additional fine was a further £12. For the benefit of Mr Balls if he's reading this, it comes to £19.75 in the red.
Ok, for an MP on lets say £48k a year (as my maths is a little slow on the uptake, even I can divide that by 12!!!) and earning some £4k a month (see!) a £20 fine is inconvenient. For someone like me on £21k it is a pain in the arse, for someone on £10k and less it can lead to more spiralling debt.
As Tracey rightly says, yes Pay day loan companies do get a lot of press and rightly so, anyone who offers you a couple of grand til pay day and then whacks 2000% interest over a year - and I wish that was an exaggeration - should be brought to light. Seriously next time there is a wonga.com advert on read the small print and look at the API and be staggered. So if you took out £100's and took a year to pay it back you could end up paying £200000s. Add this into a low salary and debts that are high enough for you to consider going to one of these companies and you are looking at a spiralling black hole that you may never get out of.
Similarly there is Brighthouse, which on the face of it offers good value. You can buy those pesky white goods and spread the cost but again check the API because its surprisingly high!
Anyway back to topic bank charges. Tracey is quite right these are a pain in the backside and one of the reasons my Wife and I closed our joint account at Natwest and joined HSBC. Every time we were but a couple of quid over the limit we got a £20 fine which was deducted the following month and because we were on a budget, which didn't include fines, would put us over the limit the following month and thus the cycle continued.
In fact, after my Grandfather died and I was waiting to see an adviser about closing his accounts I overheard a man in Chatham Natwest saying something along the lines that;
Every month I get a fresh fine that takes me over and then you fine me again! I can't afford it anymore! Do you know how much I've paid on bloody fines?
The problem is not that the bank is fining those who have maybe been a little bit flash with the cash or have had an extra expenditure this month but rather the amount that they charge you for doing so. After all £5's over should not result in a £12 fine. It can obviously trap people in a spiralling debt that is hard to get out of.
I look forward to seeing the outcome of Tracey raising this in Parliament, by removing disproportionate fines it will through another bone to the already hard pressed. The job of a bank is not to make money out of its patrons rather to be entrusted with our savings.
If you use more credit and the amount of hidden fees increase, it's a sign that you must consider switching banks. The fees are supposed to be cheaper if people use their credit cards more due to the fact that they ask for more service from the bank, and those who ask for a lot of service must be given discounts.
ReplyDeleteRafael Conner