Leaflets at the supermarket checkout offering credit cards, savings accounts and loans could leave you seriously out of pocket, according to new Which? Money research*.
[UKPRwire, Fri Jan 02 2009] Compared with a Which? Money Best Buy** product (http://www.which.co.uk/reviews-ns/credit-cards ), Tesco credit card holders could be £50 worse off each year***, savers choosing an Asda account could be losing out on £200 interest a year****, while an M&S loan at the checkout could cost £570 more in interest than one from Your Personal Loan*****.
The research (http://www.which.co.uk/reviews-ns/credit-cards ) also showed that 43% of Which? members surveyed that have a credit card with a supermarket said that loyalty points were a factor in their decision to take out the credit card. But unless customers pay off their balance in full each month, the value of any loyalty points earned would be wiped out by the additional interest they would be paying.
Which? Money (http://www.which.co.uk/money ) was disappointed to see consumers still being offered Payment Protection Insurance (PPI) with supermarket financial products. PPI is frequently mis-sold and too expensive, but a Tesco loans leaflet strongly promoted it, without even informing the reader of the loan rate or the cost of the insurance.******
Martyn Hocking, Editor, Which? Money, says:
“It’s easy to flick through the numerous leaflets promoting everything from pet insurance to credit cards when you’re looking for a distraction in the supermarket queue. However, while many of products might seem tempting, you should always shop around and ideally, compare them with Which? Money Best Buys to make sure you’re getting the best deal.
“If you’re unsatisfied with a credit card, loan or savings account you have already, then consider switching. As we head into 2009, it’s a great time to review your finances and make sure you’re in the best position for the year ahead.”
- Ends –
Notes to editors
Which? is the leading independent consumer champion in the UK, providing impartial, expert information on thousands of products and services to help make individuals as powerful as the organisations they have to deal with in their daily lives. To find out more go to www.which.co.uk.
The full article ‘Pound stretchers?’ appears in the January 2009 issue of Which? Money magazine. For further information, the full article, a copy of the magazine or an interview.
Gift subscriptions to Which? Money magazine can now be purchased from Borders, priced at £24.97 for 12 issues.
Research notes
* Between 3 and 13 October 2008, 1,928 Which? members were surveyed online about whether they had a financial product with a supermarket and what they felt about the products.
** Tesco Personal Finance Clubcard Mastercard holders could save up to £50 a year with a Which? Money Best Buy Barclaycard Simplicity Visa.
*** Asda Internet Savings account holders could earn £200 more interest a year if they put £10,000 in a Tesco Internet Saver instead – a Which? Money Best Buy savings account.
**** Marks & Spencer personal loan holders would pay £2,095 in interest over five years on a loan of £7,500, while those borrowing the same amount from Your Personal Loan would pay £1,525 in interest over the same period.
***** Which? Money Best Buys are widely available across the UK and can be purchased as standalone products. Which? only includes savings accounts from companies that subscribe to the Banking Code. Which? Money excludes any short-term interest rate bonuses that banks and building societies add to their savings rates to make them appear more attractive. When picking Best Buys, Which? is the only organisation to take into account the way that credit cards charge interest as well as the interest rate, to show the true cost of borrowing.
******* Which? has campaigned against PPI (http://www.which.co.uk/ppi ) for years and the Competition Commission recently concluded that PPI was frequently mis-sold and is too expensive.
