Archive for February, 2009

Repossession: 3 top tips for worried home owners

1. Build Up a Buffer
Save at least three month’s of mortgage payments and stash it away in a high interest savings account. This money should only be used to pay the monthly mortgage payments in the event you lose your job. Add to this amount three month’s food, gas, electric and water bills.

2. Transfer Your Mortgage to Interest Only
If you can claim Jobseekers’ Allowance, you should register immediately as this is a requirement for getting any government help paying interest on your mortgage (register even if you can’t claim Jobseekers’ Allowance due to redundancy payments received). The government have changed the rules so that now you only have to waity three months (rather than nine months) before the interest element of your mortgage will be paid. Note that the limit has also been raised from £100,000 to £200,000 per mortgage.

3. Seek Advice Immediately
Don’t wait to fall behind in paying your mortgage or other bills. Seek free help from one of the following organisations as quickly as possible and deal with things before they become a real problem.

• Consumer Credit Counselling Service: www.cccs.co.uk, 0800 138 1111

• Shelter: www.shelter.org.uk, 0800 800 4444

• National Debtline: www.nationaldebtline.co.uk, 0808 808 4000

• Citizens’ Advice Bureau: www.citizensadvice.org.uk

My Magic Money Tip Is….

I want to hear YOUR MagicMoneyTips! Give me your best one(s) by leaving a comment to this post. Click the “Leave a comment” or “Comments” (this is what the link changes to if comments have already been left) link at the top right of this post. Note that all comments are moderated before being published so there will be a slight delay before you can see it on the site. Help to beat this credit crunch and economic downturn… share your best money saving tips with me.

I’ll start the ball rolling then…

My magic money tip is… to shop online for groceries. I used to spend around 2 hours on a Friday night shopping at Tesco. During the winter it was dark, cold and I don’t enjoy shopping anyhow. Anyway, my average bill was around the £80 to £100 (sometimes more!) per week mark, but since I started grocery shopping online at Tesco.com I’ve seen my bills come down around £20 to £30 per week (on average… not counting grocery shopping at Christmas). The £4 or so delivery charge I pay saves me time, effort, money and more importantly gives me back the time to do other things! How much value do you place on your time?

Now it’s your turn….

Warning! Beware of This Latest Credit Card Scam

I was sent an email recently about the latest VISA and Mastercard credit card scam. I’ve copied it in full below as it’s pretty self explanatory.
“This one is pretty slick since they provide YOU with all the information, except the one piece they want. They want the three digits on the back of your card.

Here’s how they do it.

Note: The callers do not ask for your card number; they already have it. This information is worth reading. By understanding how the VISA & MasterCard Telephone Credit Card Scam works, you’ll be better prepared to Protect yourself.

One of our employees was called on Wednesday from VISA, and I was called on Friday from MasterCard. The scam works like this: Person calling says, “This is (name), and I’m calling from the Security and Fraud Department at VISA. My badge number is 12460. Your card has been flagged for an unusual purchase pattern, and I’m calling to verify. This would be on your VISA card which was issued by (name of bank) did you purchase an Anti-Telemarketing Device for £497.99 from a Marketing company based in London ?” When you say “No”, the caller continues with, “Then we will be issuing a credit to your account. This is a company we have been watching and the charges range from £297 to £497, just under the £500 purchase pattern that flags most cards. Before your next statement, the credit will be applied to your account. I just need to confirm your address (gives you your address), is that correct?”

You say ‘yes’. The caller continues – “I will be starting a fraud investigation. If you have any questions, you should call the number listed on the back of your card and ask for the Security & Fraud Department. You will need to refer to this Control Number. The caller then gives you a 6 digit number. “Do you need me to read it again?”

Here’s the IMPORTANT part on how the scam works the caller then says, “I need to verify you are in possession of your card.” He’ll ask you to ‘turn your card over and look for some numbers’. There are 7 numbers; the first 4 are part of your card number, the next 3 are the security numbers that verify you are the possessor of the card. These are the numbers you sometimes use to make Internet purchases to prove you have the card. The caller will ask you to read the 3 numbers to him. After you tell the caller the 3 numbers, he’ll say, “That is correct, I just needed to verify that the card has not been lost or stolen, and that you still have your card. Do you have any other questions?” After you say, ‘No’, the caller then thanks you and states, “Don’t hesitate to call back if you do”, and hangs up. You actually say very little, and they never ask for or tell you the card number. But after we were called, we called our credit card company back within 20 minutes to ask a question. Are we glad we did! The REAL VISA Security Department told us it was a scam and in the last 15 minutes a new purchase of  £497.99 was charged to our card.

Long story  short, we made a real fraud report and closed the VISA account. VISA is re-issuing us a new number. What the scammers want is the 3-digit PIN number on the back of the card. Don’t give it to them. Instead, tell them you’ll call VISA or Master Card directly for verification of their conversation. The real VISA told us that they will never ask for anything on the card as they already know the information since they issued the card! If you give the scammers your 3 Digit PIN number, you think you’re receiving a credit. However, by the time you get your statement you’ll see charges for purchases you didn’t make, and by then it’s almost too late and/or more difficult to actually file a fraud report.

What makes this more remarkable is that on Friday, I got a call from a ‘Jason Richardson of MasterCard’ with a word-for-word repeat of the VISA scam. This time I didn’t let him finish. I hung up! We filed a police report, as instructed by VISA. The police said they are taking several of these reports daily! They also urged us to tell everybody we know that this scam is happening .”

The message ends with the sentence “Please pass this on to all your family and friends. By informing each other, we protect each other.”

Agree one hundred percent. Be vigilant at all times, especially when giving out personal credit card information. Make sure you’re giving it to a person or institution you trust.

UK Interest Rates Sink to Lowest Level in UK History

12 noon on 5th February 2009 saw UK interest rates sink to their lowest level in UK history. Anybody with a standard variable rate mortgage should be in line to collect a windfall of cash as their mortgage repayments go down next month. The Bank of England Base Rate has dropped from 5% to 1% since October 2008, leaving struggling homeowners and buy to let landlords quids in.

Prior to October 2008 people on a fixed rate were dreading the usual hassle of re-mortgaging. House values were dropping fast and credit was hard to come by as lenders were protecting their rapidly falling balance sheets and reducing their exposure to the falling UK housing market. The sweet interest rates on offer were often laced with poisonous administration fees and other fees which, when taken into account in the amount of mortgage repaid every month, often meant the borrower was the same or more often, worse off. The headline rate was a real teaser!

In times like this it’s time to take heed of that old adage – “make hay while the sun shines”. Because although it might not feel like the sun is shining right now in the general global economy worldwide, it is YOUR economy that counts and now is the time to try and turn the tide.

With the savings made from reduced mortgage repayments it would be advisable to take one or all of the following actions:

1. build up a savings buffer of approximately one to six months monthly expenses, including monthly debt commitments. If your debts are high I would suggest saving up a two month buffer and then begin to tackle the high interest rate debts
2. pay extra off of the credit cards. Never be satisfied in paying the minimum amount. If possible cut a few up and cancel the accounts with the credit card provider. This will actually help your credit score, particularly if you’ve been hammering it in the run up to Christmas.
3. check with your mortgage provider first, but oftentimes you can make capital repayments off of the mortgage balance. It might be a minimum of £1,000 or a multiple of your monthly payment. Either way, check with your lender to ensure you can make lump sum payments of capital without incurring any charges.
4. pay off any money you might owe friends and family. They are often the last to be paid because they are the most patient, yet treat them badly by making them wait too long time for their money and you will quickly alienate them, possibly closing off a much needed avenue of help in the future should it be necessary.

If you have any other magicmoneytips please post them using the comment box below.

Welcome to Magic Money Tips.com.  My goal is to enrich you by sharing with you the tips and tricks that my panel of financial experts,  successful business people and other financially astute people that I know are doing or have done to ensure they survive and thrive in relation to their finances.

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