The excessive fees charged by Master Card from Merchants

Master Card should be ready to pay damages of $14 billion if the British Customer wins the case of fees charged by the network of a credit card were too high. The firm of law representing the case of customers said on Friday they filed the case with Tribunal of Competition Appeal in London in which damages of excessive fees will be charged.

The unlawful higher fees will be charged in billions by Master Card for its profit and to the damage of consumers. The former financial chief for the UK is the person who brought the case into the limelight on behalf of customers. It is the first step for the consumer’s compensation against Master Card.

This case was initially filed under the nation’s consumers Right Act of 2105. In this Act, the permission was given to the group of people to sue for damages happened to the group. It became the nation’s history in the business news.

One of the spokespeople of Master cards services said that they were against the claim made by the people. The charges at the case centre are called interchange fees which are the one component of swipe fees which represent the second highest cost for the businessmen who collect payments by the card. It was confirmed by Retail Federation of National Level which was a lobbying group of US.  The total fees of swipe average up to 2% of total purchase. But the consumers were not aware of this kind of information that the cost can be passed on to them by high prices of retail.

Education

This fee was the important cost for the group of retailers which was passed through the increased prices of services and products.

According to the MasterCard in old cases in the US, the customers lost their funds because interchanged fees have failed.

The statement was given by the spokesperson of the company that its charges were a cost of the business done.

As per the statement was given by the President of United Kingdom division of Master Card cash is the other option, but it is not a permanent solution.

The excessive fees charged by Master Card from Merchants

He said in his statement that shop must pay people to count cash and handle it before holding securely and transporting it to the bank. So it is considered as the basic cost of doing business.

Case II

MasterCard was ordered to pay damages of $69 against the case which was brought by the British Retailer in which it was said that company fees were interchanged which not competitive.  According to the estimation done this summer by MasterCard the total settlement was done with retailers went around $270 million.  The UK consumers trail is most probably starting in 2018.

The total damages demanded by the customers were genuine. But it was too quick to start driving losses to the MasterCard.  The total cash generation was $4 billion per year and was capable of borrowing from someone. The shares of MasterCard’s went down 45 cents and 0.5 % to $99 on Friday. The observation of profit gains up to 2.2%…

Dummies’ Guide to Current Accounts

What is a Current Bank Account?

Current account is the singular most important account that you will need to conduct all of your daily financial activities.  With a current account, you can cover all the monthly expenses – from setting standing orders or direct debits to pay the utility bills, rents, mortgage, taxes or other intermittent or regular outgoings. Mostly, the current accounts are linked with the debit cards which allow you to withdraw cash through ATM whenever you require them. You also get a cheque book so that you can pay through it whenever you cannot access your debit cards.

Who Can Hold A Current Account?

In order to hold a current account, you have to be over the age of 16 years to hold a current account. However, there are some banks in the UK who have 18 years as the minimum age limit. In case you are underage, you can still open a current account with the help of your parents. Since banks provide an overdraft facility as well, you ought to have a reliable credit history. You will have to show the proof of identity documents and address before opening an account.

Advantages of Current Account

Current accounts have the following basic advantages:

  1. Overdraft facility
  2. Facilities of internet banking and mobile banking are provided
  3. Transfer funds to multiple locations
  4. Deals with large and frequent financial transactions and segregates personal finance from business finance

Types of Current Accounts

Despite the fact that current accounts are so central to financial activities, many people struggle with the one that they have and they do not even know how to use it to its maximum potential. There are a plethora of options available and picking the right one requires you to analyse all the choices carefully.  Following are the basic types of the current accounts that might be perfect for your requirements.

Overdraft Account

If you are constantly out of money by the end of the month, you can consider a current that ha a minimum or an interest-free overdraft capability. However, never cross the preset overdraft limit without the consent of your bank or else you credit rating will decline.

Cashback Current Account:

Do you want the bank to pay you back for your everyday financial activities? This is the current account that lets you earn money. Some pay money on direct debits or standing orders whilst others reward you for purchases through debit or credit cards through selected outlets. There are conditions imposed on these – you may have to associate your salary account with it or deposits a certain amount every month or pay a certain fee each month.

Offset Mortgage Account:

This type of current account uses the money in your account to reduce your existing mortgage. Unlike savings account, all the advantages associated with the cutting of the mortgage arrears is not subjected to taxation. Yet, these have lofty fees so you might want to deliberate over other mortgage related products too.…

Is a Low Credit Rating Always a Bad Idea?

Everyone needs loans occasionally,especially when they are facing financial difficulties. However, obtaining a credit is not always easy. Lenders today have become choosy when it comes to advancing a loan. The reason is that they don’t want take risk on bad loans as it would have a negative impact on their bottom line.

Before advancing a loan, lenders will check credit score of the borrower to gauge their credit worthiness. A bad rating indicates high risk to the lenders. As a result they don’t tend to advance loans to individuals with a low credit score. Even if they do give out the loan, they tend to charge a high mark-up on the loan.

However, if you have a bad credit score, it’s not all doom and gloom for you. There a number of alternative sources that give out loans even to individuals with a low credit scores.

Microlenders

Microloans are small loans that range in size from £5,000 to £25,000. Also known as payday loans, these loans are offered to salaried individuals to meet their cash fall before their next pay day. The advantage of micro lenders is that that they advance loans to individuals that have not-so-perfect credit history. However, the catch is that these lenders typically charge a high rate on the loans. The fees and mark-up on these loans are much higher than traditional loans. The loans are generally taken by individuals to meet essential expenses that they are not able to meet due to cash shortfall at the end of the month.

Secured Credit Card

Signing up for a secured credit card is another great option to individuals with a low credit score. This type of credit offered to individuals after an initial cash deposit that range from $300 to $500. The cash advance serve as collateral for the loan. After the deposit is made, individuals can obtain a loan that can be used to pay bills, meet emergency expenses, and much more.

There are many safe and reliable options as well as predatory ones when it comes to secured credit card. So, make sure to shop around and pick a one that entails low rates and charges. Obtaining a secured credit card loan can be your first step to rebuilding your credit score.

Military Aid Lending Societies

Uncle Sam generously offers loans to individuals that have served in the military. If you or someone you know has served in the military, then you may be eligible for a military loan even in case of a low credit score. Some of the societies that grant military loans in the US include Air Force Aid Society, Army Emergency Relief, Navy Marine Corps Relief Society, and Coast Guard Mutual Assistance. The programs are especially targeted for former military personnel having a low credit score to pay for rent, groceries, and medical bills.

In the end, you must know that having a bad credit score does not mean end of the road for you. There are a number of alternative lending loans that you can apply even if you have a low score. That said, it is recommended to avoid loans with a high rates and charges as you will find yourself easily entrapped in a debt hole coming out of which will be a difficult prospect for you.…

The Pros and Cons of Provident Fund

Today, the term Provident Fund typically means a type of fund that pays a lump sum to an employee at the time he or she reaches superannuation or alternately leaves the service of the company/firm he has been working in.

The provident fund (PF) consists of contributions made by both the employee as well as the employer. As a general rule, 4.5 percent of the employee’s take home salary is deducted at source while a similar contribution, not exceeding the amount paid by the employee, is paid by the employer. These contributions are on a monthly basis and the amount so procured is invested by the company. The total amount (i.e. the employee contribution, the employer contribution as well as the profit accrued from investments) is handed over to the employee either when he retires or when he leaves the employment of the company. As a general rule, this facility is available only to confirmed employees rather than probationary ones.

Pros

  • The PF accumulations of the staff member of the company earn interest (profit) on the employee’s contribution as well as on the amount that has been contributed by the employer.
  • Since Provident Funds are calculated on the basis of monthly running balance, their interest rates are updated far sooner than other fixed term mutual fund deposits.
  • Many companies allow their staff members to avail advanced partial withdrawals for medical emergencies, capital expenditure (such as house purchase or construction or vehicle purchase), marriage (self or offspring), or any other extenuating emergency and/or pressing liquidity concerns.
  • The full amount may be paid to all permanent employees when they leave the employment of the company.
  • In case of the death of the employee, the Provident Fund is payable to the surviving family members of the late staff member or any other individual as nominated by the deceased.
  • If the Provident Fund performs well over the years, the employee’s pension could be higher than what he would be able to acquire from a defined benefit pension fund once he reaches the age of superannuation.

Cons

  • The biggest disadvantage of a provident fund is that a chunk of the employee’s salary is deducted at source, i.e. he is paid a lesser amount than his salary. For example, if an employee has a salary of $100k per month and his monthly contribution is determined to be 4.5% then he will get only $95.5k per month with the remainder being deposited in his Provident Fund.
  • This type of pension fund is inherently riskier for the employee as he/she does not know for sure where and how the fund is being invested. This means that he /she might end up paying into the fund without even understanding how much of a risk his/her investment may have potentially incurred.
  • The company might go bankrupt along with the trustees of the fund and all investments of the fund may be foreclosed by the creditors.