Barclaycard 0% Interest Rate Scam

I have just been caught out by a Barclaycard 0% interest rate scam. The amount involved so far is

Interest On My Barclaycard Account

quite small. Just £2.71 on my June statement. But regardless of the small size, the interest charge is extremely annoying. I religiously pay off my credit card balances by the due date, so any interest charge is an aberration in my book.

The Barclaycard 0% Balance Transfer

On 7th May I took up a 0% balance transfer offer. In my case for £850. The balance transfer fee was 3.9%, amounting to £33.15. However, the offer appeared to represent good value as the interest on the balance was 0% until 1st February 2016 - effectively an APR of 2% over 21 months. So far so good.

The problem comes when I go to pay my May Barclaycard statement. The balance amounted to a total of £1,019.26. That is £883.15 of 0% balance transfer plus £136.11 of purchases. I decide to pay the £136.11, plus the £33.15 in balance transfer fees. In addition I paid a further £20.38 by direct debit. All payments being received by Barclaycard before the due date.

In essence, I had cleared my purchases, cleared the balance transfer fee and paid £20.38 towards the 0% interest free balance.

My June Credit Card Statement

Today, I received my June statement. To my surprise it shows an interest charge. Only £2.71. But this £2.71 relates to a charge of 1.313% against some balance of mine. For the accountants and mathematicians amongst you 1.313% monthly interest amounts to 17% annually. £2.71 divided by 1.313% interest equals £206.40. The non 0% element of the statement was only £169.26, even if I take the balance transfer fee into account. How had Barclaycard arrived at £2.71 interest? As I had more than cleared the balance of interest bearing charges before the due date I immediately contacted Barclaycard. Getting through by phone was very difficult. So I messaged them requesting from them an explanation as to why I had been charged interest. This is what I received from Barclaycard's customer services:

 In reply to your enquiry, I would like to state that the on your recent statement we applied interest charges on the purchase balance and I can confirm that if you use your Barclaycard for purchases or cash withdrawals ? you'll be charged interest up to the point you make your payment, even if you pay off those purchases at the next statement.

Avoiding Interest on a 0% Interest Free Barclaycard Balance Transfer

Apart from anger at the glibness of Barclaycard's message the penny dropped. The 0% interest free balance transfer is a scam. In essence, once you accept the 0% balance transfer, everything else on your Barclaycard will be charged interest from the transaction date. Even if you confine yourself to purchases and you clear your complete balance of new purchases each month. As you can see from my statement above, my monthly expenditure is greater than the balance transfer. So in order to gain 2% APR interest on £850 I would be paying 17% APR on £1,866.70 of purchases plus £2.71 of interest. A rough calculation gives a monthly interest charge of £24.55, even if I pay off my complete balance of new purchases and the previous month's interest. This far outweighs any benefit from having the original £850 interest free balance transfer. 

Based on Barclaycard's rules the only way to avoid interest charges on purchases, and interest charges on the previous month's interest charge, is to pay your statement on date of issue and then pay Barclaycard for each of your new purchases on the day you make them. Alternatively, you could maintain a permanent credit balance greater than your expenditure. That way you will not have an over night outstanding balance. But effectively you are using your credit card as a debit card. I have suggested this to Barclaycard and I am awaiting their views.

In conclusion. In my opinion Barclaycard's 0% interest balance is effectively a scam. It will cost you far more than you will ever save. And joins the growing list of financial products that any sensible consumer should avoid.

The Pound Euro rate Finally Hits 1.24

The UK pound finally went through the 1.24 Euro barrier today.

The £ Up to 1.241 Euros - A gain on almost 5.6% in 12 months

The latest UK employment data, that showed unemployment falling to 6.6% in May, took the £ over the 1.24 level. I predicted the increase in the £'s value last week, in response to Mario Draghi's actions to stimulate the Eurozone economy.

This makes travelling across most of Europe much cheaper than a year ago. The Euro area inflation rate is less than 1%. Meaning, in real terms, actual sterling costs for an average purchase will be almost 5% lower.
On a personal basis, this is extremely good news. I have arranged to pay for my holiday accommodation in the South of France in Euros.

Car Fleet Management - Lease or Buy?

Motor vehicles - Should you lease or buy?

For many people the choice of car finance is growing. The major car manufacturers are offering attractive low deposit and low interest rate deals. These deals are for private motorists. Private motorists generally get a choice of cash purchase, with large discount, hire purchase where they buy a car on credit, a PCP or personal contract plan, where they buy and finance the car's depreciation or a personal lease, where they effectively rent the car over a long period. But what if you are a business car user or vehicle fleet manager?

Corporate fleet buyers have traditionally chosen between buying or leasing. Buying, as it implies, is simply acquiring the full title to the asset, then disposing of it at an optimum period in the vehicles life. Leasing means acquiring use of the vehicle, whilst the title is held elsewhere. Depending on the finance and tax regime operating at the time, companies tend to switch between the two options. The finance regime includes availability of cash flow or credit, the level of interest and the way the asset (i.e. the vehicle) is treated for depreciation and taxation.

However, there are other aspects of leasing such as fleet management that may encourage corporate fleet managers to take the leasing option. Amongst the fleet management solutions provided are the following:

• Vehicle breakdown
• Vehicle maintenance and servicing
• Vehicle tracking
• Licence management
• Insurance management
• Accident management
• Tyre management
• Fuel cards
• Vehicle disposal

Motor vehicles - And who manages?

Utilising a fleet leasing company that provides a comprehensive range of vehicle management services relieves the client company of many of the trivial headaches associated with opearting a vehicle fleet. Ultimately the job of a company is to deliver satisfaction to its chosen customers. Not to take on additional and non-value-adding administrative functions. Outsourcing vehicle fleet management, along with the financing and disposal task allows companies to focus on their core business.

Ski Chalet Sell-Off Prompted by French Taxes



A UK-Owned and Managed Chalet in Morzine

 Over the weekend the Sunday Times covered the story of rising French taxes and their impact on the British holiday home market in France. The increased taxes take the form of a new 15.5% social tax on rental incomes and capital gains which is on top of the existing 20% tax on rental income and 19% tax on capital gains. In addition there is a new sales tax, equivalent to our stamp duty, levied at 6% on properties with a sale value of more than €250,000. Most UK-owned holiday homes are either gites in rural areas or ski chalets in the Alps and Pyrenees.

The article covered the one particular ski chalet owner, Alexandra Beeley, under the heading "Time to sell my chalet". Ms. Beeley had bought her chalet in 2009 for €750,000 and it is now worth €800,000. Given the chalet has increased in value Ms. Beeley would be hit by the new taxes.

All in all the article suggests that property taxes could amount to as much as 40.5% of the final selling price (19%+15.5%+6%).

The socialist government of Francois Hollande appears to have viewed the British holiday home owner as a lucrative and popular source of additional taxation. According to the newspaper the new taxes will hit hundreds of thousands of UK citizens who utilise French properties as part holiday home and part small business. Worse it seems, our own HMRC will still get in on the act. As any residual capital gains are liable to 18% UK capital gains tax. Incredibly the 15.5% social tax is not taken into account in any HMRC calculation, so in effect incurring double taxation.

Although the new taxes may bring in revenue in the short term, like Hollande's other socialist policies, it is likely to backfire in the long term. From experience I know some parts of rural France rely heavily on the inward investment of British property investors and the revenue from British holidaymakers. Discouraging British investors will see the jobs created by property conversions dry up. Many ski chalets and gites are the product of these renovation projects.

In recent years a number of smaller British owner companies have set-up specialist catered chalet businesses in France. The ski industry in France is in a precarious state. Costs are rising and the fall in value of the £ versus the € means extras such as ski-passes, ski-school and food and drink are increasingly expensive for the valuable British tourist. Business owners are not going to invest if taxes squeeze all of their potential gains. If British chalet owners follow the lead of Alexandra Beeley, there could be a major exodus of British chalet owners from the Alps and Pyrenees.

NatWest Bank Still Failing Customers

I don't bank with Natwest. However, someone who works alongside me does. This is her view of the events surrounding the problems with the Natwest banking computer system.

I have been a customer of Natwest for more than 18 years and like many other establishments I have mostly found their customer service to be average at best overall.

However, the recent debacle involving a system error that caused millions of people to be unable to access their cash effected me directly and like most other customers I am also asking myself 'where should I move my money?'. The embarrassment of having my card declined at a restaurant recently (due to no fault of my own) was overwhelming - thankfully my friend doesn't bank with them and could therefore pay the bill for me. Of course, my instant reaction was to call the bank and find out why, despite the fact I didn't meet the criteria of those effected, I was unable to pay for my meal. I was told that all accounts were in the process of being reset and as a result my account currently has a zero balance.

Luckily I am not out of pocket, with my bills already paid and no more direct debits on the horizon, but for those who did have payments bounce I feel even more angry.

Right now all we can do is hope that when they say 'It will be resolved in the morning' it really will be resolved in the morning.

Quickbooks Pro 2012 Staples Update

Staples issued a further Tweet at around 11:11. Still offering Quickbooks Pro 2012 at £99. Guess what? On clicking on theTwitter link at 11:13 I found the product was still out of stock! Do the people run their social media actually speak to their commercial department? The image below was taken from the Staples website at 11:13.

Quickbooks Pro 2012 - Out of Stock

P.S.
Possibly due to my pressure, Staples have released an extra 40 copies. These are available via phone on 0844 546 6666, whilst stocks last. I've just bought one.

Staples in Quickbooks Promotional Scam

The Staples Quickbooks Pro 2012 Promotion

Are Staples the stationery suppliers a bunch of scammers? This morning I received a promotional email from Staples timed at 6:02. The promotion offered a one-day only sale on Quickbooks Pro 2012. The offer price was £99.95.

The problem is that at 8:45am I opened the email and tried to buy the Quickbooks Pro 2012 package. The Staples website informed me that the offer at sold out. This less than 3 hours after issuing the email - and before many businesses in the UK had actually opened.

I immediately contacted Staples via email only to be told by customer services that the promotion had indeed sold out!

The out of stock had obviously not been communicated to the Staples online marketing people. The Quickbooks offer shot on the left was taken at 10:00am, whilst the promotion was still live on the Staples website. I suspect that the whole promotion has been entered into knowing that the stock was insufficient. Whether such a promotion is illegal, I'm not sure. But it does seem very odd to target a promotion at businesses that sells out before most of them are open and before they are able to action any response.

The Quickbooks promotion image can be expanded. It states in small print that the offer is available whilst stocks last. But as mentioned the image was taken at 10:00 - 1 hour and 15 minutes after I had tried to buy the product and the Staples website stated they had no more stock. Whether legal action can be taken against Staples is a matter for the advertising authorities. However, this cheap tactic just diminishes the status of Staples as a credible small business supplier.

P.S. Staples even had the cheek to issue a Tweet promoting the offer at around 9:45. This is at least one hour after the stock of Quickbooks Pro 2012 had run out. The tweet was till up, without correction, at 10:45.

Staples Tweet of the Quickbooks Pro 2012 Offer - at 9:45

P.P.S. There is now a thread about the Staples Quickbooks Pro 2012 offer on UK Business Forum. Apparently Amazon have the same Quickbooks offer but the product is in stock.

Fitness First Going Bust?

Is Fitness First effectively about to go bust? It seems the UK's leading gym operator cannot pay its bills and is to enter into a Company Voluntary Agreement or CVA. According to the Daily Telegraph at least 750 Fitness First jobs are at risk of closure as the company is attempting to reduce the rent it pays on 81 or its UK fitness clubs. The CVA is being handled by KPMG. A CVA is a highly controversial technique used to drive down the costs of companies in financial difficulty. It is clear from the figures quoted in the Telegraph article that Fitness First intends to pay no more than 28p in the pound due to the creditors involved.

I am a former member of Fitness First Ashford. I left following a dispute. I have since seen a letter that confirms my suspicion that the Ashford club is targeted for closure. The landlord of Fitness First Ashford's car park has been clamping down on parking. Time allowed for parking has recently been reduced to 2 hours. Given the obvious risks involved in membership payments not being honoured if the club was to suddenly close, perhaps members of Fitness First Ashford should consider their position.