Google launched its new Wallet application, which allows consumers to shop by simply tapping their smartphone at a PayPass checkout, in September. The app uses a relatively new technology (in terms of its applications to personal finance and payment methods) called near field communication (NFC) to send payment information to the reader and carry out the transaction, eliminating the need for carrying cash and credit cards.

The Google Wallet app stores information from the user’s credit card, gift cards and loyalty cards on the Android smartphone. Currently, the app’s availability is very limited because it can only be used in the US with a Nexus S on the Sprint network and only supports Citi MasterCards and Google Prepaid cards. However, more cards, including Visa and American Express, are expected to be supported at some point in the future.

So, how will the introduction of something as radical as Google Wallet affect the use of credit cards?

Although the intention is to completely eliminate credit cards in the future, the actual credit product will still exist, just in a different form i.e. as a digital file rather than as a plastic card. The ease of use of Google Wallet could encourage more people to use credit cards for small purchases such as coffee or lunch.

At the moment there will be few users of the Google Wallet due to the lack of availability so it will be difficult to tell how it is impacting upon credit cards. However, once the Google Wallet app rolls out to UK Android-powered smartphones we could really start to notice a difference.

Android became the top-selling smartphone operating system in the UK this year, with the last six months seeing Android devices account for 44% of all smartphone purchases. While the market is incredibly tight, David Gosen, managing director at Nielsen, said that “the momentum is with Android at the moment”.

Advantages of Google Wallet

There are so many advantages to using mobile wallets, such as Google Wallet. One example is the convenience and speed at which consumers can make small purchases.

One thing of particular interest is that Google Wallet can store multiple credit cards and the loyalty programs attached to them, meaning that consumers never miss out on their discounts.

According to the Google Wallet FAQs page: “It [Google Wallet] stores virtual versions of your existing plastic cards on your phone, along with your coupons, and eventually, loyalty and gift cards. Our intention is that Google Wallet will be an open mobile wallet holding all the cards and coupons you keep in your leather wallet today.”

The Google Wallet service is completely free to both merchants and consumers, perhaps making it worthwhile for small businesses in the UK.

Disadvantages of Google Wallet

The app stores personal credit card information inside the phone, and so, as expected, there have been plenty of consumers with security concerns.

Google has tried to eradicate these fears by saying (on the Wallet FAQs page): “Your payment credentials are stored in a chip called the Secure Element contained within your Nexus S 4G. The Secure Element is isolated from your phone’s main operating system and hardware. Only authorized programs like Google Wallet can access the Secure Element to initiate a transaction. Additionally, because Google Wallet enforces a PIN, the only way to transmit payment credentials is if you first enter the PIN.”

Google Wallet is not the only mobile wallets system heading to retail outlets because PayPal, the worldwide leading electronic payments giant, is also joining the battle soon. Also, let’s not forget Square (created by Twitter founder Jack Dorsey), which uses different technology to NFC and is funded in part by Visa.

Possible impacts of Google Wallet launch in UK on credit card use

1. The introduction of Google Wallet could have significant impact upon the number of people using credit cards and prepaid cards to pay for smaller items because the new technology is specifically designed for point of sale in personal transactions and would be used mainly in restaurants and shops.
2. It is thought that Google Wallet could impact upon the number of hotel and ticket bookings made online as users are currently frustrated with repeatedly entering credit card details into websites only to find that the tickets have been re-released due to a ‘time out’ period. Managing director of advertising and marketing for Google, Rob Torres, has said that 53% of business travellers would be willing to book on a mobile device. This information from a Google survey reflects numbers found from TravelClick which is currently experiencing year-on-year mobile bookings growth of 1355%.
3. The number of credit cards issued could increase because users are able to load digital ‘copies’ of multiple credit and prepaid cards on to Google Wallet and will not have to carry them around in a bulging wallet.
4. While Google Wallet may increase the use of credit, it could also have the opposite effect with more and more consumers turning to prepaid cards as a suitable alternative.

Obtaining credit in the UK

Consumers who are interested in obtaining new credit or prepaid cards to use in association with Google Wallet when it launches here in the UK need to ensure that they choose the right one. It is essential that individuals compare credit cards and prepaid cards to get a card that best suits them. Online comparison websites allow consumers to access tools and tables enabling them to compare credit card interest rates, charges, credit limits and eligibility with ease.

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With Christmas just a couple of months away, many of us will be thinking about applying for a new credit card, or using an existing one, to help us manage the cost of buying presents, food and other festive essentials. Credit cards with introductory offers, such as 0% interest on purchases, are a great tool you can use to help ease the high cost of Christmas, but they are not the only tool that can help you with money management during the holiday season.

Prepaid cards are a great alternative to the plastic already filling our wallets. These cards offer guaranteed acceptance because they don’t come with credit facilities, making them ideal for people with a poor credit history. They can also help you to budget because you can never spend more money than you have loaded on to the card, so you do not end up paying for this year’s Christmas next year.

Another use for these cards is as Christmas prepaid gift cards. While you could simply slip some money or a gift voucher into someone’s Christmas card, why not give them a prepaid gift card instead so that they can use your present in all stores (worldwide) or for online shopping? Plus, not only will you be giving them the money on the card, you will also be giving them the card itself, which they can continue to use throughout the year to shop online and help them budget. This is especially beneficial for younger kids who are currently reliant on borrowing their parents’ debit or credit cards so they can shop online to get the best deals.

If you decide to give a prepaid card as a gift you will need to check whether the card you choose has a monthly fee because you (or the recipient) may not want to be paying this fee in future months.

How to apply for a prepaid card

It’s incredibly easy to apply for a prepaid card online and you can usually start using the card within 7-10 working days, once your card has been made and sent to you in the post. If you want the card in time for Christmas, either to use for your own Christmas shopping or to give away as a gift, here is a guide to the application deadlines you will need to work to.

These dates are provided by Compareandsave.com as a guide only and are based on the application running smoothly. If demand is unusually high or if there are delays with the postal system, it may take longer for you to receive your prepaid card.

Budgeting for Christmas

According to research from R3, the insolvency trade body, conducted at the start of December 2010, more than five million people had already taken on debt to pay for Christmas 2010, an increase of nearly 50% on the previous year. It was also found that more than one million people believe it will take them more than six months to pay off their Christmas debt.

Whether we admit it or not, we all go overboard at Christmas sometimes, especially when we see the ‘perfect gift’ and we have a credit card burning a hole in our pocket. Prepaid cards can help us limit our spending and prevent a post-Christmas debt hangover.

Prepaid card charges

Prepaid cards do incur charges but these will vary significantly between cards so it is important to look out for them when you compare prepaid cards.

The most common charges found with prepaid cards are:

• Application or set up fees: these usually range from £5-£10, although you can get some cards for free, and are payable upon application
• Monthly fees: these are    sometimes applied in place of the individual fees for reloading and withdrawing cash and can vary in price
• Reload fees: there may be a small fee applied when the user reloads the card, but there is often a free method of topping up the card
• ATM cash withdrawal fees: this charge is either a flat fee of around £1.50 or a percentage of the value withdrawn
• Transaction fee: this fee usually only applies when the card is used abroad but it is an important one to check if you think you, or the recipient, will use the card abroad.

These charges often put people off when they look to apply for a prepaid card but it is important to remember that the alternative could potentially see you paying high interest charges on a credit card, especially if you have trouble with money discipline and budgeting. It could be argued that the fee is a small price to pay to prevent unmanageable debts next year. Also, if the card is a gift, you could imagine that the recipient will save a lot more than the fees by using the card to buy things online at a cheaper price than available on the high street.

There is still time to apply

It’s not too late to change your mind and start using a prepaid card this year. In general, you don’t need to apply for a prepaid card until 7-10 working days prior to the date you require it, but this can differ between providers.

The table above should provide you with a guide as to when you should apply for prepaid cards if you want to be able to use them for your Christmas shopping, or to give to friends and family as Christmas prepaid gift cards.

Remember that external factors such as peaks in demand or delays in the postal system could cause your prepaid card to arrive late. To ensure that you receive your card in time and prevent disappointment, order it as early as possible.

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Let’s face it, Christmas can be an incredibly expensive time, and often a time that our wage packets are unable to handle. In order to prepare for your purchases over the holiday period, you might be looking to apply for a credit card.

Everyone enjoys doing their Christmas shopping in their own way; you could be incredibly organised and have everything bought and wrapped by November, but most of us do it in early December, and inevitably leave some of it until the last minute.

However, with just 35 days  until Christmas Day, you will need to start thinking about applying for your new credit card so that it arrives in time for you to use it for your Christmas shopping.

Of course, there are several different types of credit card available and some take longer than others to arrive due to the way the card application process is handled.

Some credit cards are what’s known as ‘instant decision credit cards’ and they pretty much do what they say on the tin – you apply for the card online and the credit card company comes back to you with its decision within a couple of minutes, unless they need more information from you in order to make the final decision.

Cards that don’t offer an instant decision can take around 7 calendar days to get a decision to you.

Either way, you will still need to sign a credit agreement (some issuers allow you to do this online using a digital credit agreement), and wait for the card and PIN to arrive in the post so it is important that you apply now.

Here are the application deadlines for our top eight Christmas credit cards and have been calculated on the basis that you wish to receive your cards by 5th December, for those organised Christmas shoppers or 18th December 2011, for those who like to leave their festive shopping until the last minute.

It is important that you compare the credit cards available to you before applying to make sure that you choose the one most suitable for your needs (you should only make one application for credit at a time or it will make you look like you are desperate for credit and put off prospective lenders). To ensure that you receive your Christmas credit card in time for you carry out your festive shopping you should apply in plenty of time and account for any potential problems with the application.

Types of credit cards

The way in which you plan to use your Christmas credit card, combined with your credit rating, will affect the credit card you should apply for. Listed below are definitions of the different types of credit cards:

Instant decision

Instant decision credit cards provide many applicants with the result of their application within 60 seconds online. However, these results are not always instant if you do not meet exact criteria. If it is harder for the lender to judge your application, this decision will be delayed. These can be ideal for last minute Christmas shoppers as they are more likely to arrive in the nick of time.

0% purchases

Many credit cards offer customers introductory offers and deals to persuade them to take out their credit card. One of the most common deals for new customers is 0% interest on purchases for a fixed period of time. This is an excellent Christmas credit card because it allows consumers to buy all their festive gifts without having to pay high interest payments too.

0% Balance transfer

This type of credit card is designed to help consumers reduce the cost of their outstanding debt, as they can transfer high interest balances to a cheaper card. This card should not really be used for additional borrowing, but reducing the cost of existing debts. If you are looking for a card to do Christmas shopping a 0% purchases card may be more appropriate.

If you are looking to transfer a balance from another card because your last 0% balance transfer (BT) offer has run out and you need a 0% purchase deal for this year’s Christmas shopping, you can get cards that offer both a 0% BT and 0% purchase interest free period.

Credit-builder

If you don’t have a good or excellent credit rating, you might struggle to get accepted for a standard card. Credit building credit cards are designed to help consumers improve their credit score and their ability to access more affordable credit in the future. This credit card should not really be used to borrow money – you should really just use the card to pay for things and then pay the bill off in full each month to demonstrate to future lenders that you can manage credit sensibly. If you don’t pay your bill off in full each month, you will have to pay high interest charges because the interest rates on cards for building credit are higher than standard cards.

Rewards

These cards reward their customers for spending on their credit cards. Benefits can range from air miles to High Street gift vouchers. The interest rates are usually higher on reward credit cards due to the value of the benefits cardholders can receive. Rewards credit cards are best suited to people who use their credit cards regularly but always pay off the full balance every month. If the balance isn’t paid off in full each month, the interest charged will outweigh the rewards earned.

Christmas credit card tips

• If you have opted for a 0% purchases credit card, make sure you have the ability to repay the outstanding balance before the introductory period expires or you will face interest charges on your remaining balance once the 0% period ends
• Using credit cards for purchases of between £100 and £30,000 will protect you under Section 75 of the Consumer Credit Act, meaning that if a company fails to deliver your items (if it scam you or if it goes bust) you can claim your money back from your credit card company
• Compare credit cards to make sure you are getting the best deal.

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In the video below, Pensions Minister Steve Webb speaks to Director General of Saga, Ros Altmann, about the government’s plans for change and why he thinks pensions have an image problem

Pensions have been a hot topic in the past 12 months with the Government announcing a major overhaul of the pensions system. As a result, there are many questions on the tip of the tongues of those nearing retirement and those who are already drawing a pension. So, are you worried about what’s going to happen?

What about pension savings for the future?  How will auto-enrolment into employer pension schemes work? And will pensioners be able to dip into their pension pots earlier than they currently can?

Pensions Minister Steve Webb admits that pensions currently have an image problem, so what will the Government do about the impact on annuities and are we about to see big changes to regulations in regards to them?

Last year, the Government changed the inflation measure used for increasing state pensions and in the autumn Budget, at the end of November, the chancellor will reveal details of how next year’s increase will be calculated and how much more pensioners can expect.

Saga Director General, and former Government Pensions Advisor, Ros Altmann was given the opportunity to question Pensions Minister Steve Webb in an interview that gave pensioners an insight to what changes can be expected.

Here are the highlights:

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Post Author: Marghaid Howie, Gas and Electric Reporter

Ofgem wants suppliers to reduce the maze of tariffs, and SSE and British Gas has been the first to react.

SSE, which includes Atlantic, Southern Electric, Scottish Hydro and Swalec, has removed its online-only tariffs, giving access to customers who prefer to manage their account by phone and with paper bills.

British Gas has withdrawn its cheapest online tariff, Websaver 13, so it now only has one online variable tariff and one fixed, in addition to its normal standard and green tariffs.

However, are these changes really in the customer’s favour in the short term? It seems that this winter it will just leave consumers with fewer choices to keep their gas and electric bills as low as possible.

Customers on standard rates across all of the Big Six suppliers have now had their prices increased, with EDF’s last to come into effect on 10th November 2011.

There are still some cheap energy tariffs available at around £300 less than the typical £1,345 bill. What’s more, several of these are fixed rate tariffs, giving you the peace of mind that your prices can’t go up next year, or even the year after that.

Here are the Top 10 Cheapest Tariffs:-

* based on typical tariff costing £1,345 per year. All calculations are for an average usage dual fuel household paying by monthly direct debit. Average usage as defined by OFGEM is 16,500 kWh pa of gas and 3,300 kWh pa of electricity. Correct as of 10th Nov 2011

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This is a guest post by Bryony Merritt, spokesperson for Birkbeck, University of London, and is in repsonse to the news article ‘Average students debts set to exceed £53k’ we published on 16th August 2011. All views are those of Birkbeck, University of London, and may not wholly reflect the views of compareandsave.com.

Over recent months there has been much coverage of the Government’s plans to increase tuition fees for higher education qualifications. For many, and particularly for mature learners, who may already be paying mortgages, car loans and raising families, it might seem that a university qualification is now out of reach. However, behind the headlines there are some pieces of good news which mean that going to university is now much more affordable and accessible, especially for mature learners who are more likely to study part-time.

Part-time study

At Birkbeck, University of London, which specialises in providing part-time higher education in the evenings, the average age of an undergraduate student is 33 years old.

Although part-time fees will increase in 2012, just like full-time fees, for the first time there will be no upfront costs for part-time students as the Government is making student loans available to part-time students.

Over 75% of Birkbeck students combine daytime work with evening study. This enables them to offset some of the costs of studying (e.g. books and travel) before they’ve even graduated.

Student loans are not like commercial loans

The government student loans which will be available to part-time students are not the same as a conventional debt, and there will never be debt collectors for student loans.

Part-time students only need to start repayments 4.5 years after they’ve taken the loan, or the April after their course finishes, whichever is earlier. However, as this is a new system, the earliest any student will begin to repay the new government loan for students is April 2016. And only then when their earnings reach £21k. Repayments are taken directly from salary, like a tax, and if for any reason their salary decreases, their repayments will decrease as well (or stop completely if their salary falls under £21k).

Under the new system, students will make smaller repayments each month than under the current system, and although this means that payments may go on for longer, after 30 years any unpaid debt is cancelled.  The size of the repayments made each month is not affected by the size of the loan; so whether you borrow £18k or £27k, you will still pay back the same amount each month, for up to a maximum of 30 years.

A student loan does not show up on your credit rating, so future applications for credit or mortgages will not be affected. Student loans do not pass onto family if you die either, so no-one else can be left paying off your debt.

Degree or not to degree?

Going back to education after a break, and perhaps after negative experiences with education as a child or teenager can be a daunting experience. For mature learners who are not sure whether a degree is right for them, there are a variety of shorter qualifications for which student loans will be available from 2012.

Certificates of Higher Education, which are taught at first year undergraduate level, offer a route into university study for people who don’t have traditional qualifications or have had a long break from formal study. They can be obtained in one to two years. For the first time in 2012 students will be able to access student loans to pay for these types of courses.

Monica Law, Birkbeck’s Head of Marketing and Recruitment says: “Although there has been a lot of negative press around the increase in tuition fees, loans for part-time students are really good news. For the first time, our students will be able to access higher education without having to pay upfront for their studies. We encourage applications from mature learners, and we don’t require A-levels from any applicants aged over 21; we make our own assessment of their abilities based on interviews, and the skills they have gained through work and other activities.”

Students who are still concerned about taking on debt should also find out about the grants available from colleges and universities. Birkbeck has a range of generous student finance options, and for eligible undergraduate students will consider waiving one year of fees or providing cash bursaries to cover the costs of books, childcare or travel to classes.

Visit the Birkbeck website for more information

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