Beware the financial bite of unexpected charges
Be careful. They're everywhere. I'm talking about those jaw dropping, wallet wounding, vampires of finance, ready to pounce on every penny in your pocket.
Yet remember, a vampire can only enter your house if you invite it, so if you’re armed and know what to look for, you can stay safe…
1. SHOCK £20 CALLS TO 118118
The days of using 118 numbers are long gone for most people. Yet some, whether for speed or lack of online access still call – especially more elderly and vulnerable people. Prices are now a true horror story for many services, including the most famous 118118, which now charges a whopping £4.49 to connect and a further £4.49 a minute, on top of the line providers’ charges. Worse still, if you say yes to being connected, even if it’s a call that’d be in your free minutes, you will continue to pay that hideous rate for the ongoing call. Yet there are some cheaper numbers – 118128 charges 35p flat rate for one call. And outrageously the firm behind 118118 has another less publicised number 118811 that’s a flat £1 for a call; or even call its free 0800 1183733 as long as you’re prepared to listen to ads. Plus those who are unable to read or hold a telephone directory due to disability can register to be able to call 195 for free for the same service you just need to fill out a simple application form, call 0800 587 0195 for free to ask for a form.
2. THE HIDDEN FINE FOR SPENDING ON DEBIT CARDS
Spend abroad on your plastic and most credit and debit card providers get a near-perfect exchange rate from Mastercard or Visa, but then add a 3 per cent-ish ‘non-sterling exchange fee’ to what they charge you. Yet on top of that, the DEBIT cards from Lloyds, Halifax, Santander, Bank of Scotland, RBS, NatWest, Clydesdale and TSB also effectively add a charge for spending of up to £1.50, meaning a lot of small transactions can cost a fortune. Instead, the cheapest way to spend abroad is using a specialist overseas credit card which have no exchange rate fee, so you get the same near-perfect rate the banks do. Just pocket one, only for use abroad, and ensure you repay IN FULL to minimise the interest. To find which of the 8 that offer this you’re most likely to be accepted for use my eligibility calculator at mse.me/TravelCardElig.
3. YOU PAY TREBLE THE COST FOR IDENTICAL MEDICINES JUST FOR THE PACKAGING
Most people know that it’s the medicines ‘active’ ingredient that does the business – so Nurofen is effectively just ibuprofen – and generic does the same job far cheaper (though if you’ve certain allergies check the other ingredients too). Yet sometimes you’re paying more not just for the same active ingredient, but an IDENTICAL tablet. Look on the side of the packet you’ll see a product number (PL). If two packs have the same PL number that means the tablets inside are identical.
4. THE £1,000 FINE FOR AN OUT OF DATE PHOTO
If you’ve a photo driving licence, get it out and check the 4b date on it. That’s the date your photo expires, and around 2m of them are out of date. If you’re stopped by police it can result in a fine of up to £1,000. The DVLA does write to you, but many miss it. If yours is out of date, renew online via the Gov.uk website for £14, by post for £17, or at the Post Office for £21.50 (including photo).
5. THE CREDIT CARDS THAT’LL LEAVE YOU WITH GREY HAIR BEFORE YOU REPAY THEM
Repaying only the minimum balance on your credit card not only means it’ll take you much longer to clear the debt, but it’ll cost a lot more too. That’s because the minimum payment isn’t a fixed amount – it’s usually a percentage of the balance. So the amount you repay each month will fall as your balance reduces, meaning it takes longer to clear. On £3,000 debt the current minimum is around £70 a month, instead of just opting to pay the minimum, if you fixed your repayment at £70 a month – which you can do as you’re paying it now – then you’d clear the debt in five years at a total cost of just £1,500 in interest, saving £2,400 in interest. There’s one caveat though. If you have more than one credit card with debt on it, then always focus on repaying the most expensive card first. That means you should only make the minimum repayments on all others. That way you get rid of the most expensive debts first, and then focus on the next most expensive.
* Martin Lewis is the Founder and Chair of MoneySavingExpert.com.
To join the 12 million people who get his free Money Tips weekly email, go to www. moneysavingexpert.com/latesttip.