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FOOL'S EYE VIEW
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Although shopping around is perhaps the most powerful weapon in the personal-finance armoury, many of us are unwilling (or even afraid) to do so. One reason behind this reluctance has been described as "paralysis by analysis". Quite simply, there's so much information and so many different financial products out there that it's very difficult to find the perfect product for you. However, thanks to the wonders of the Web, consumers now have access to various tools to make this tedious task much easier. My favourite tools are the fantastic Best Buy tables and search engines produced by Moneyfacts, the UK's leading provider of independent, unbiased financial data. Today, I used these tools, plus a few others, to track down some of the best financial products available in the UK. Here's what I found: 1. Cashback credit cards If you always spend less on your plastic than you can afford to repay, and are prepared to pay off your monthly bills in full, then you need a cashback card. In effect, it pays you to spend -- some Best Buy cashback cards pay you a rebate of up to £2 for every £100 that you spend. Without any extra effort, I've earned over £70 in eight months by making all of my purchases on my cashback cards. 2. 0% credit cards (Warning: read Your Ultimate Guide To Credit Cards before playing the 0% game!) There are two basic 0% deals on offer: 0% on balance transfers By transferring existing debts to these cards, you can avoid paying interest for up to ten months. Transferring a balance of, say, £2,000 previously charged at 16% APR to one of the cards below produces the following savings over one year (assuming that you repay £100 a month): SkyCard: £222; Barclaycard Platinum: £221 and HSBC Premier: £213. 0% on purchases Normally, your credit card will provide you with a standard interest-free period of between 45 and 59 days. However, by spending on a 0% on purchases card, you can defer most of your spending for up to ten months. This means that you can leave your money on deposit, earning interest right up until your 0% deal ends, when you pay off your bill in full. Best Buys in this category: Sainsbury's Bank (ten months) and Nationwide BS Classic (nine months) and Co-operative Bank Travel (seven months). There is a third type of 0% card, which offers 0% on balance transfers and purchases, but you're better off sticking with two separate 0% Best Buy cards, because the "double 0%" offers aren't as attractive. Choose from a deck of delightful cards in our Credit Card centre! 3. Personal loans Choosing the wrong personal loan can add over £1,000 to your interest bill, as I warned here, so it pays to choose wisely! Best Buys for a loan of £5,000 over three years without payment protection insurance include: Pick a lovely loan in our Personal Loan centre! 4. Savings accounts (Warning: read Your Ultimate Guide To Saving before choosing an account!) When choosing a savings account, you need to decide whether you're prepared to chase the latest hot rates by moving your cash between accounts with introductory bonuses. If not, you'd be better off with a high-paying no-strings account, such as the ICICI Bank HiSAVE account, which pays 5.15% AER on £1+. This article lists three Best Buys in both categories. Track down a superior savings account in our Savings centre! 5. Bank accounts Which would you rather earn from your current account: 0.1% a year credit interest or fifty times as much? And which would you rather pay when you're overdrawn: 5.9% AER or up to 30% AER? If you'd like high rates of credit interest and low borrowing rates, check out the ace accounts listed here. Find a cracking current account in our Banking centre! 6. Mortgages Choosing a mortgage is an uphill struggle, because there are more than 8,500 to choose from. What's more, you need to look beyond the headline rates, because there are almost always large arrangement and other fees lurking in the small print! Hence, my advice would be to let an experienced expert find your Best Buy, such as award-winning no-fee mortgage broker London & Country Mortgages. Find a happier home loan in our Mortgage centre! 7. Index trackers Investing in shares is a piece of cake with an index tracker. An index tracker is a cheap, simple stock-market fund which simply tracks the performance of a particular index, such as the well-known FTSE 100 index. When choosing a tracker, you need to decide which index to track and then simply choose the lowest-charging fund in that category, based on its Total Expense Ratio (TER). The tracker fund with the lowest TER is the Fidelity MoneyBuilder UK Index Fund, which charges a trifling 0.3% a year to track the FTSE All-Share index, with no other one-off or ongoing charges. You can invest as little as £50 a month or with a lump sum of £500+. What a bargain! Check out the fab funds in our Index Tracker centre! 8. Life and health insurance (Warning: read Cheat Death - And Save Money Too before buying this cover!) Again, you need to tread very carefully when choosing life insurance, because there are loads of traps to fall into. For example, you could lose two-fifths (40%) of your life insurance payout to the taxman if your policy isn't written in trust, thanks to Inheritance Tax. Using a discount broker such as Fool partner The Idol will help to minimise your premiums, plus some specialist protection brokers, such as Lifesearch, offer a price-matching service to guarantee you the lowest rates. Prune your premiums with a visit to our Insurance centre! 9. General insurance General Insurance? Wasn't he killed at the Battle of Balaklava? No, only kidding: general insurance is the umbrella term used to describe non-life insurance, such as breakdown, home (buildings and contents), motor and travel insurance! Bizarrely, most customers don't even bother getting multiple quotes for their cover: they simply renew their insurance automatically, and end up paying over the odds for year after year. Yet, according to the AA, the UK's biggest insurance broker, shopping around for motor insurance could save a typical motorist £296 a year for comprehensive insurance, or £395 for non-comprehensive cover. These five tips will help to cut your car insurance down to size. Likewise, if you don't shop around for home insurance, then you're paying an average of £135 a year too much. So, adding a £100 saving on travel insurance means that failing to shop around for these three policies could be costing you an extra £600+ a year. Ouch! Prune your premiums with a visit to our Insurance centre! 10. Pensions City watchdog the Financial Services Authority (FSA) produces a series of comparative tables which allow consumers to compare the costs of various investment products, including personal pensions. Personal pensions were introduced in 1988 and, thanks to their high charges, generous commissions and poor investment returns, a mis-selling scandal inevitably followed. However, the introduction of low-cost Stakeholder pensions in 2001 brought down costs in this arena, making personal pensions a more attractive proposition. According to the FSA, a 30-year-old man retiring at 65 and saving £200 a month into a pension over 35 years would pay charges of £57,800 in a Scottish Equitable Flexible Pension Plan, assuming investment growth of 7% a year. At the other end of the scale, the highest-charging pension would gobble up £164,000 in charges, which is over £100,000 more! Hence, it pays to check out the charges before choosing a pension. Just one final reminder: shopping around is your most potent weapon in the battle against banks and other financial firms, so make sure that you use it! More: Find better bank accounts, credit cards, insurance, investments, mortgages, pensions, personal loans and savings accounts today!
Lender
Total amount
repayable (£) Typical
APR (%)
Moneyback Bank
5,424.48
5.5
Cahoot and Direct Line
5,432.04
5.6