Peak Card

Are we approaching peak card?

Figures from the card providers trade group, UK Cards, show that payments by card have more than doubled in a decade to £566bn a year.

Use in pubs has multiplied 5 times. People seem to be happy to use contactless debit or credit cards to buy sandwiches, coffees and papers.

Some carry no cash their wallets or purses. They can be genuinely flummoxed if a shop doesn't accept payment by card.

So much so that commentators never tire of predicting the death of cash, or at least its long term decline.

However, surely it is much more likely that we will see the death of cards before we see the death of cash?

Any user of Apple Pay, Barclays bPay and a host of upcoming rivals will tell you that it is possible to pay electronically while leaving your cards at home.

For a good while, most people will take several methods of payment with them, including cards.

But the writing is on the wall. The card itself is just a way of carrying a chip - and the chip can easily be mounted on something else or replaced by the wireless capabilities of a mobile phone.

Millions of pounds for card users

Two million people are being sent letters to tell them they could qualify for compensation for credit and debit card protection policies sold to them by their banks.

The policies promised to protect customers against losses if thieves used their cards, but such losses were likely to have been covered by the bank anyway.

Customers spent an average of £25 a year on policies including Card Protection, Sentinel and Safe and Secure Plus.

The period covered by the compensation is between January 2005 and August 2013, so it could stretch to nearly 9 years.

The refunds could add up to hundreds of pounds in some cases, including interest at 8 per cent.

The letters are being sent by a special company set up by banks, credit card companies and a US firm called Affinion which provided the insurance.

The Financial Conduct Authority is not accusing them of mis-selling. It says some features of the policies could be useful.

Customers will have to vote on the scheme which will then need High Court approval before payments are sent out in the autumn.

Credit boom of Thatcher years

Credit cards more than tripled to 30 million in the ten years to 1990.

Consumer credit doubled in real terms.

Controls on hire purchase were removed.

Homeowners borrowed £114bn against their homes, just for spending money.

Source: Demos

Bank scare stories

One newspaper told us this morning that the Spanish banking crisis had hit the UK High Street.

They were referring to a credit rating agency, Moody's, downgrading Santander UK from A1 to A2, with a negative outlook.

To most people this means nothing, but it does make you ask: "Should I panic? Should I pull out my money?" etc etc

1. What is a credit rating agency?

It tells investors how risky it is to invest in companies, including banks. A lower rating means it's slightly riskier.

It is not telling customers whether or not their bank is about to fail.

2. What are they saying about Santander UK?

That it's slightly riskier than before, though not as risky as its big Spanish parent, Santander.

The A2 rating is still firmly "investment grade", as are all the big High Street banks in the UK.

3. How does Santander UK compare?

The highest rated UK banks are HSBC and Barclays.

But another big bank, RBS (which includes NatWest), has a lower rating than Santander UK.

So it's in the middle of the pack.

4. What does Santander UK say?

That 90% per cent of its assets are safely in the UK.

And even Moody's says that it's highly unlikely that the UK banking watchdog, the FSA, would allow this money to be used to prop up Santander in Spain.

What does all this mean? Don't panic - just calm down.

NB The FSCS protects deposits up to £85,000

Unlicensed finance websites closed

OFT shuts unlicensed websites to protect borrowers

The Office of Fair Trading has shut down 19 websites which solicited personal information from vulnerable borrowers in order to sell it on.

The lead-generation firms targeted people with disabilities, those connected to the military, and people with generally limited access to credit. An OFT investigation found they were unlicensed and therefore in breach of the Consumer Credit Act.

If the information is sold on, the victims could find themselves being targeted by other companies offering credit.

The OFT is already investigating cold calls and texting by credit brokers and debt management firms.

£67 for a loan which never arrived

Citizens Advice is demanding a ban on cold calling by credit brokers and up front fees for loans, saying that people are being pressurised into parting with cash for loans which never materialise.

Here's the story of one target of the scam, Yvonne Weekes, who lives in Cornwall...

I was filling in a survey on the computer and one of the things that came up was: "Would you be thinking of getting a loan any time in the near future?". I thought: funny it should come up just when I'm thinking of getting some money and I clicked on it.

The following morning I had a phone call from a loan company, offering me £1,000.

I said I only needed £200. I said that I do pyrography. I burn pictures on wood and I needed a new machine

She said the least they could lend was £500. I said I didn't need that.

She said maybe you're thinking of a holiday. You could do with a weekend away somewhere.

Then I thought I'm going away with my daughter and granddaughter. It would be useful. She was very, very persuasive.

She asked for all my details. Then she said the only thing we need to do is to get your bank details because we charge a fee of £67. We don't take that out of your bank, we take that out of the payment of the £500.

I thought I'm not keen on giving my details and I said I don't really want to give away my bank details.

She said said have you ever bought anything on ebay? It's the same thing, she said, except we deal with thousands of people every day and we never have any problems. It won't cause you any problems at all. So I gave them my bank details.

Five days went by and I rang them up and it was an answering machine. I left a message: when do I get this money?

I went into the bank and checked where I stood. £67 had been taken out of my bank account. Of course I didn't get any loan: it never came through at all. I phoned them 20 times.

They sold on my details and the first thing I knew was I got another phone call: "We understand you're looking for a loan, Yvonne".

It just went on and on. I got 60 phone calls.

It's very, very stressful because not only have you not got the money you applied for,but you're getting harassed by people.

It gets to the point where you're not just upset. I was really, really upset: I couldn't believe I had been so naïve as to be taken in by them.

Then I started to get angry. They're doing that to me. What if they do that to someone who's ten years older than me and they're desperate for the money?

Do not under any circumstances give out your bank details. If somebody rings you and they want information just tell them to go away and you're not interested.