Credit Card Best Buys

There are various advantages of credit cards as they allow easy transactions when purchasing items online and are great assets in time of cash crunch. However, because of high interest rates, many consumers avoid using credit cards. Fortunately, there are many different types of credit cards to choose from including low interest, balance transfer, instant approval, reward, airline, corporate, prepaid, and even student credit cards. Obviously, there are many factors for determining the best offer, but foremost being the different rates associated with each offer including the APR (annual percentage rate), the annual fee if there is one as well as other cardholder benefits.

The zero percent interest is a very attractive credit card feature offered by several big name credit card lenders including Citi, Discover, and American Express. A 0% credit card has many perks if you have good credit. However, the rate does not always remain at 0%, rather it is just an introductory rate. Yet zero percent interest credit cards are ideal for financing large purchases in which the holder plan to payoff in a few short months. These cards are more practical than using high interest credit cards or obtaining a personal bank loan.

There is option of balance transfer credit cards when the holder takes some or the entire amount of money that he owes to one lender and transfer that debt to another lender. The second lender pays the bill to the first lender and takes on the debt, thereby becoming the sole lender on the amount transferred. Credit card companies offer strong incentives for the balance transfer because they benefit financially from taking on the debt, since any interest paid will now be profit for them. The main reason to consider a balance transfer is to reduce the interest rates. However, the balance transfer option should not be used to avoid repayment of the credit cards, rather it should be used as a method of reducing the monthly bills in order to repay more efficiently any outstanding debt.

There are also ways to make money from credit cards, rather than having them being a drain on the finances. The cashback credit cards offer great opportunity to make some cash while spending on the credit card, although it only suits the customers who pay their bill in full at the end of each month. A cash back credit card provides the holder a chance to earn as he spends, as a percentage is returned to him on an annual basis for money that he has spent. It is a reward for spending your money! However, if one decides to balance transfer an amount from one’s existing credit card company on to a cash back credit card, then one should avoid it as any payments made to the credit card will only go on to pay the amount transferred and interest will only mount up on any purchases that have been made on the credit card. This will result in the holder paying back more than the cash back card is making for him.

Tags: credit card, balance transfer, cash back, online, compare, credit card uk, interest free, 0%, visa, low rate, mastercard

Forex - Dollar, yen higher as risk appetite wanes; US data to give direction

The dollar and the yen strengthened as investors pared back their exposure to risk, amid growing fears of an economic slowdown sparked by recent financial market instability.

As risk aversion grows, the dollar strengthens thanks to its role as a safe haven, and the yen benefits from the unwinding of the risky ‘carry trade’ currency bet which has kept it persistently weak.

‘The yen is rising anew and carry trades are being pared back as ‘US recession’ is increasingly uttered by economists, commentators and soon by central bankers,’ said Ashraf Laidi, analyst at CMC Markets.

He believes continued reports of US economic weakness will begin harming the dollar.

‘Once US macroeconomic concerns (weaker growth) take over from market concerns (market contagion), dollar weakness will likely become broader in nature as the Fed reduces the dollar’s interest rate differential by cutting rates,’ he said.

Signs of the first economic effects of the market turmoil will come this week as a wealth of data is released.

The key US economic indicator is Friday’s payrolls report for August, but before then investors will be examine the latest ISM surveys into the manufacturing and services sectors, as well as the US Federal Reserve’s Beige Book — a compilation of anecdotal economic reports from its regional banks.

Interest rate decisions from central banks in the euro zone, the UK, Canada and Australia will also be in focus, and could have a marked impact on market sentiment.

‘Such has been the rise of the market’s favoured yen crosses this past year that disappointment stemming from unchanged (monetary) policy and any frank assessment of the risks at hand could have profound psychological implications for market sentiment,’ said Neil Mellor at Bank of New York Mellon.

None of the four central banks are predicted to hike rates, and much attention will be given to accompanying comments from the European Central Bank, which is now expected to keep its key refi rate on hold at 4.00 pct on Thursday in light of the tensions in the financial markets.

‘One unfortunate slip of the tongue and (ECB President Jean Claude) Trichet could provoke a massive volatility backlash,’ said Bear Stearns (NYSE:BSC) economist David Brown.

The Bank of England also delivers its latest interest rate decision on Thursday, and is tipped to keep its benchmark rate unchanged at 5.75 pct, especially as three-month interbank rates hit a near nine-year high today, for the second day in a row.

The London interbank offered rate (Libor) for three-month sterling reached 6.798 pct, its highest since the Long Term Capital Management hedge fund crash in December 1998.

The BoE, which has hardly said a word about the financial market instability, is coming under more and more criticism for its failure to provide liquidity in the market in the way the Fed and the ECB and its gagging of banks using its back-up lending facility.

‘Relations between the BoE and the banking community are becoming strained,’ said ECU Group chief economist Neil Mackinnon.

London 1305 BST London 0846 BST

US dollar
yen 115.46 down from 115.55
sfr 1.2111 up from 1.2082
Euro
usd 1.3585 down from 1.3607
yen 156.88 down from 157.22
sfr 1.6455 up from 1.6444
stg 0.6749 up from 0.6746
Sterling
usd 2.0128 down from 2.0161
yen 232.50 down from 232.88
sfr 2.4379 up from 2.4363
Australian dollar
usd 0.8244 up from 0.8242
stg 0.4095 up from 0.4086
yen 95.23 up from 95.18

China’s forex reserves not invested in US subprime mortgages

SHANGHAI: None of China’s $1.3 trillion in foreign reserves are invested in the US subprime mortgage industry which in recent weeks has bruised global markets, state press reported on Tuesday.

“China’s official foreign exchange reserves have no holdings of US subprime securities,” the China Daily quoted Wei Benhua, deputy director of the country’s forex regulator, as saying.

The latest denial came after Liu Chunhang, a senior official with the China Banking Regulatory Commission, said last month that domestic commercial banks had limited exposure to US’ subprime ills.

He said that they had set aside enough resources for dealing with the problems.

The massive defaults in US subprime mortgage market have triggered a wider credit market crisis and sparked world market volatility.

Most of China’s foreign exchange investment in the US is believed to be in treasury bonds, and the Asian giant is currently the world’s second-biggest holder of such bonds after Japan, the newspaper said.

China’s forex reserves, already the world’s largest, surpassed $1.33 trillion at the end of June, with about 70 per cent generally estimated to be held in US government notes.

Several major mainland lenders including Bank of China, Industrial and Commercial Bank of China and China Construction Bank, last month disclosed their US-mortgage risk exposure but all said the impact would be very limited.