Credit cards are great, you get a months free credit . Golden rule unless you can pay it ALL off at the end of the month DO NOT SPEND IT.

In an ideal world you pay it off each month and have some savings put aside for emergencies

But back to the article – you are allowed to write to the card Co that are putting up your interest rate and “decline it” ( I think you have 14 days) – its a new law that came out in Jan.

They must still use the old agreed rate provided that you keep up repayments and don’t put any new items on it

Thankfully, I don't spend what I haven't got, and when I due use my credit card I pay it off every month. I refuse to pay the kind of interest that they charge.

One of my cards i dont pay it off as its interest free, and the full amount is sitting in my bank gathering interest & ready to pay it off when the rate runs out

Consumer credit act is also really useful for settling a dispute, and one of my cards gives me free additional warranty on goods, cancellation protection on tickets for things I can't make and something like 45 days fully comp cover against theft, accidental damage etc. That is all free and to me quite valuable bonuses.

I think that the german system is incredible since it onnly upsets those who have no business using credit cards anyway.
W.E buffet concerning debt
" if you're smart you don't need it and if you're dumb you have no business using it"
Hows that for the 2nd richest man in the world (last year since bill gates and him seem to share it alot.)

I think the fact that have debt is still seen as shameful in Germany has helped keep spending under control.

It is only the "younger" generations which have really started spending silly money. It is possible to overspend here, especially since shops introduced their version of hire purchase a few years back and most businesses will invoice private customers as well, but at least credit card spending isn't too bad.

See this is what amazes me this government seems to think it is necessary to let people build up ridiculous sums of personal and secured debt to have an economy which functions. Which bemuses me since Germany obviously doesn't need to yet still has $1 trillion more GDO than us. Then again Thatcher ruining our industry and favouring the financial areas of the service sectors over others.

My dad spent 6 months in Germany when he worked at aldi about 22 years ago, and still has praises of his impression of the society, infrastructure and attitudes of the people.

In general over here we have given people to free a run on their financial decisions over here finance should be limited as follows:
1) The German system for credit cards
2) Non secure personal loans never can total more than 50% of yearly salary
3) Secure loans can only total a maximum of 95% of a houses property value regardless of circumstance
4) Secure loans can't total more than 6x the mortgage holder(s) income which will decrease by 0.4% a year till secure loans cannot total more than 3.2x mortgage holders income. (so such a measure itself doesn’t cause an instant collapse in the housing market, but rather a gradual deflation in which time people find other things to waster their monthly disposable income on other than a crippling mortgage.) (will be a shame for anyone dangling in negative equity cos you’ll all be stuck)
5) A legal imposition of a link between the bank of England base rate and mortgage loans of a maximum of 2%. (Meaning BOE interest rates can return to 3% and I can actually have money that is only slightly losing value)
6) Income security appraisal required to get loans.
7) Overdraft size to be limited to 12.5% of income after tax and before benefits.
8) New finance and Loans provided in the UK after the date of implementation that do not meet these standards will be written off.
9) A regulator of Anglo-global finance provisions to assess UK based companies are acting responsibly abroad.

The problems with that is that it will not take into account peoples personal circumstances. I have been in situations which would have been blocked under your rules. My bank have granted me loans which would have been blocked under these rules but they have been repaid.

A far better system is to have simpler products that customers can actually understand. With rules that cannot be changed, and the only way they can compete with such products is interest rates.

Banks make a lot of their money from hidden fees and penalties, so all banks should offer plain vanilla products such as banks accounts, credit cards, and loans. These products are fixed in terms except interest rates. The fees are regulated and payment terms cannot be changed without the users approval so no moving the payment dates to before wages unless the user agrees. The bank or building societies standard variable rates should be in the middle of the rate spread so no more penalising customers who term has ended.

Banks should also offer bank accounts with simple terms, so no refusing a customer because they are bankrupt or have no credit records. The bank has to offer a base account with no credit facilities at all, and also no fees. This will stop people on benefits being refused bank accounts.

Mortgage rules should change over night not a slow tightening. All it would do is trap new buyers into a falling market. Better to hit those in over valued homes. They will have to pay the building societies standard variable rate. Though that variable rate should be no more than a 1-2% over base rate.

A ban on banks offering mortgages and restricting them to building societies who are excluded from the money markets and can only raise deposits from savers. This will boost savings rates as they would be higher than banks, who have access to cheap foreign money.

Banning all shadow banking operations. Only banks, credit unions, and building societies can make loans to more than one person. Personal loans between individuals are capped at 10% per year. That should end loan sharks. Any such organisation will have to apply for a banking license and be rigorously inspected.

A cap on interest rates charged on loans. So rather than offering money at exorbitant rates, because of the risk, they will have to cap the rates or refuse the customer.

The Bank of England will have targets for savings. This should hopefully stop interest rates falling too low again. It should also have a target on indebtedness. If the levels go above this figure then the Bank of England is to force banks to make special deposits with the Bank of England that effectively reduce the banks capital and hence its ability to lend. Banks with excessive loan books could be hit while others will still retain the ability to lend. This will force the banks to look at who they lend to and maybe restrict some loan types.

Also the government need to re-look at ISAs. They should also not force people into shares. They should have a cash only option for many. A shares option has not benefited people as well as it should have. If we have another stock market crash which we could then it could deter savings even further.

+1
However I cannot see how it would affect you apart from rule 6 which I’m not so sure on myself.
Total personal debt should be no more than half anybody’s income 10k of debt for 20k of income seems a bit steep. A total of 95% mortgage maximum makes sense since dips in the market won’t be plunges into negative equity as much as before and I’d be in favour of a 90 % mortgage maximum. Overdraft size limit makes sense if you’re on 20k a year a £2500 overdraft should be the limit.

Definitely


No I could never agree to instantaneous drop from no limit to 3x limit since this would cause another banking collapse. An instant devaluing of housing will cause panic and mess with allot of share indexes in property based firms in various areas of the market. Lending will be constricted again to businesses (which I have no new rules on) It’s always better to depressurise rather than explode any market. So the limit would decline from 6x to 3.2x over 5 years. 6x first year, 5x second 4x third and 3.5x fourth 3x fifth.
This constitutes a method of creaming whereby house prices are slowly deflated. Overnight imposition of such a limit would be dangerous.
Another limit should be set on the length of mortgages of 25 years.

+1

+1

I would prefer a maximum of 90% loan to value. Though that could come down over time say five years.

I was not fixated on a instant from to 3 times earnings, but I was aware of the fact that if a first time buy bought at the peak with 6 times earnings then if they needed to remortgage then in 5 years they would have to come up with a huge sum to enable the remortgaging. Also if the housing market fell as it should then they would be trapped in with a overly large mortgage, and their ability to borrow again would be nil. If the economy is to grow healthily then property price growth is going to have to be sacrificed. Then instead of higher and higher mortgage payments people can actually save. That is what happened for most of the last century up until the end of the 70's.

Main thing is that no bank is going to lend at more than 4x income now. Also the thing is that everyone in the market will be trapped with a negative equity mortgage if the market falls. To protect people for martgage renewal there should be a clause for people to be able renew the loan as long as the size of the remortgage isn't to be increased on origional mortgage value on inception.

The main Idea of the limit and time lapse is to decrease this fixation with property growth and I agree with much you say amnesia.

Porperty, pensions, shares and savings all appear to have taken a beating of late. Are there any safe options for your money?

Honest question as I have a house I'm renting out that pays for itself, with a little extra that helps to cover unforseen repairs etc. Are there any better options for me?

No renting is a good way of paying for a house is more stable than merely investing money in property or property development. Ofcourse you are on the micro nay nano level of economics where me and amnesia have varying Ideas for macro financial stability. Renting prices are likely to rise due to demand from people who can't get the deposits for a mortgage.

First of all banks being d1ckheads with shares and property, with people going along with it have hit pensions and eventually savings.

Property is currently a time bomb and is risky
pensions are useless in general
shares require particular know-how and even then are difficult
savings in ISAs are good without share options
People forget commodities which like share require some know how but are fairly good investment schemes once you get the hang of them.

Banks loved them because they generated fees on share transactions and loans.


At the moment it is a noose. If you buy at much lower levels then they will provide reasonably stable income, but tax changes could ruin it as an investment, plus if you need cash fast it is pretty much useless. You may have to give up on the idea of capital gains if the world economy fails bank into recession. If you have a rental property with little debt you will have a secure and reasonable return. That should be the main concern.


They used to be good but governments raided them for more than 20 years. So not so good. Though I have seen the idea of actually putting money into a Cash ISA and over years with the tax benefits and lack of risk you would actually have a nice sum to retire with. Plus would be immune to stock market crashes.


Plus at the moment they are grossly overpriced. Though if you have a friend who is starting a business buying a share in their business may make a lot more sense. You can see where you money is being used, help out in case of problems. It is not liquid so you may not get money out when you need it, but the returns would be better. A better and cheaper option would be ETF's (Exchange Traded Funds) They have one advantage they are cheap. Many managed funds barely keep up with the index as a whole, and when you include the fees you fall behind. ETF's have very low fees, as low as 0.5% and match the index so will probably out perform the rest of the managed funds without much effort. Banks hate them because they cannot justify 2% annual fees if they are in ETF's.


Cash ISA's would be safe plus can be turned to cash if necessary.


They are just as volatile. They are doing well at the moment because the Chinese are buying large stocks of commodities for storage. That could change if there were any problems. Plus commodities pay no interest and you have to store the stuff.

Never liked the sound of commodities, too similar to commode.