Money Saving Expert of TV and radio fame, Martin Lewis, has been harping on about reclaiming exploitative bank charges recently. Barclays, for example, charge you £35 each time you fail to pay back your credit card balance on time. Financial analysts with letters after their names have established that it only costs the banks £4-ish in administration charges to process these deficits so the rest is just beer money.
Despite the hefty charges, the same people are continually going into the red and so have been racking up fees totalling many thousands of pounds. Martin has put together a template letter for you to fill in and submit to your bank to reclaim the unjustly pilfered funds and people have been doing this in their millions throughout the country.
This is all well and good, but it's a lot of hassle so I'm here to offer my guide to good money management. Can I have a drum roll please?
OK, here goes. If you spend more money than you've got in your bank account, the figure on the bottom line of your statement becomes negative and that's bad because the bank tells you off and takes more money you don't have. The secret is - wait for it - to only buy stuff when you can afford it. That way the numbers on your statement stay black and you don't end up living on the streets.
Now of course there are worthy exceptions to every rule. Say you've got an arrangement for money to be automatically deducted from your account to cover essentials like rent or mortgage repayments or bills and then unexpectedly you lose your job. It's the ones who spend £100 on a handbag and then are shocked to discover that they're broke. No, more than broke, they're severely bankrupt.
Which is another rant in itself. In Britain, if you become very, very bankrupt and have no way of getting back on an even keel (besides getting one of those job thingies, being frugal and paying back the money over a long period of time) you can opt to just right off your debts and start afresh. You're barred from owning a credit card for a while, but other than that you're free to go on another shoe shopping spree at Harrods the next day. Handbags and shoes? This is all starting to sound very sexist isn't it. I didn't mean it to. Just as many men are useless with money, and the ones with handbag and shoe fetishes are the absolute worst offenders.
To sum up (Congratulations if you're still awake. If not, you smell and your nose looks a bit funny and you can't hit me for saying so because you'll never read this): that £35 fine is supposed to be excessive because it's intended to act as a deterrent. You agree to it when you sign the credit card contract with your bank so it's a bit rich to moan about it now. Banks exist to make money. If you don't have any invested with them they can't reinvest it elsewhere. They aren't going to give you money for nothing over and above the 0% interest 28 day repayment policy (which they also profit from) out of the goodness of their hearts, so don't give them the satisfaction of reeling in your debts.
Anyway, look on the bright side. It's only money - it's not as if Barclays are going to come round to your house and repossess your legs is it?
Despite the hefty charges, the same people are continually going into the red and so have been racking up fees totalling many thousands of pounds. Martin has put together a template letter for you to fill in and submit to your bank to reclaim the unjustly pilfered funds and people have been doing this in their millions throughout the country.
This is all well and good, but it's a lot of hassle so I'm here to offer my guide to good money management. Can I have a drum roll please?
OK, here goes. If you spend more money than you've got in your bank account, the figure on the bottom line of your statement becomes negative and that's bad because the bank tells you off and takes more money you don't have. The secret is - wait for it - to only buy stuff when you can afford it. That way the numbers on your statement stay black and you don't end up living on the streets.
Now of course there are worthy exceptions to every rule. Say you've got an arrangement for money to be automatically deducted from your account to cover essentials like rent or mortgage repayments or bills and then unexpectedly you lose your job. It's the ones who spend £100 on a handbag and then are shocked to discover that they're broke. No, more than broke, they're severely bankrupt.
Which is another rant in itself. In Britain, if you become very, very bankrupt and have no way of getting back on an even keel (besides getting one of those job thingies, being frugal and paying back the money over a long period of time) you can opt to just right off your debts and start afresh. You're barred from owning a credit card for a while, but other than that you're free to go on another shoe shopping spree at Harrods the next day. Handbags and shoes? This is all starting to sound very sexist isn't it. I didn't mean it to. Just as many men are useless with money, and the ones with handbag and shoe fetishes are the absolute worst offenders.
To sum up (Congratulations if you're still awake. If not, you smell and your nose looks a bit funny and you can't hit me for saying so because you'll never read this): that £35 fine is supposed to be excessive because it's intended to act as a deterrent. You agree to it when you sign the credit card contract with your bank so it's a bit rich to moan about it now. Banks exist to make money. If you don't have any invested with them they can't reinvest it elsewhere. They aren't going to give you money for nothing over and above the 0% interest 28 day repayment policy (which they also profit from) out of the goodness of their hearts, so don't give them the satisfaction of reeling in your debts.
Anyway, look on the bright side. It's only money - it's not as if Barclays are going to come round to your house and repossess your legs is it?