Credit card provider suffers computer glitch

Credit card provider Barclays resolved a technical fault yesterday, which had rendered many of its cash machines inaccessible.

Online banking was also hit by the technical fault, meaning that credit card customers were left unable to log in to their accounts.

It is thought that a computer failure in Barclays' Gloucester offices led to the bank's electronic network crashing in the early afternoon.

However, technical experts had the problem fixed by 16:00.

A female customer told the Daily Mail that the glitch had made it impossible for her to use her credit cards abroad.

"I'm currently abroad and can't use ... any of my cards - cash or credit - related to Barclays and when I called the bank I was told they are upgrading their system," she added.

The technical problem affected people in London, the south of England and parts of south Wales.

Barclays retains around 15 million customers in the UK.

Tips for gap year travellers

of thousands of graduates and school leavers will soon be entering the job market – but with high unemployment, a gap year might be preferable until the job situation improves.

The financial responsibilities of travelling require strict budgeting if you don't want to find yourself stranded on the other side of the world requiring the help of parents.

Credit cards offer insurance on purchases, but can mean spending is difficult to control. On the other hand, prepaid cards are ideal for gap year travel as there is no credit facility, so you can spend money without the risk of debt, yet at the same time the holder has the protection and flexibility of a credit card.

Peter Harrison, from price comparison site moneysupermarket.com, said: "Prepaid cards offer the best foreign exchange rates and anyone can have one. But you need to be sure to get one with the lowest fees. Fairfax and CaxtonFX prepaid currency cards are currently the best in the market."

The Fairfax euro currency card has an application fee of £9.95 for orders less than £500 and is free for orders more than that. There is no monthly fee and an overseas ATM fee of £1.50 – less than most British debit cards.

However, if you lose your card Fairfax won't send you a replacement overseas so you might want to consider taking a spare card. The CaxtonFX euro card has no application or monthly fee, but a slightly higher ATM withdrawal fee of £2. It charges £5 to send you a replacement card.

The other advantages of prepaid cards is that should the ''gapper'' run into financial difficulties their parents can top up the card from Britain. Mr Harrison warned travellers to beware of less competitive prepaid cards on the market that often have hidden charges such as an application fee, a monthly fee and overseas usage fees.

The Tuxedo Pay Monthly card for example, has a £9.95 application fee and a £4.99 monthly fee. The onebanking Account prepaid card has an initial fee of £30 and an ongoing monthly fee of £12.95.

It is estimated that 25pc of travellers do not have adequate travel insurance even though gap travellers are more likely to try extreme activities, such as bungee jumping and skydiving. In the same way that holidaymakers pay a premium for winter sports cover, gappers can expect their insurance to cost more.

But the problem is that cash-strapped students are not seeing travel insurance as a financial priority. The Foreign and Commonwealth Office says it gets more referrals for help from gappers than any other type of traveller because of a lack of insurance. The help overseas embassies can give is limited, especially if you cannot meet any required expenses.

Concern over credit insurance scheme

THE Government’s planned credit insurance scheme for small businesses will only have a limited impact, a North West-based lender claimed today.Edward Rimmer chief executive of Liverpool-based Bibby Financial Services said he was also concerned about the length of time it has taken for the details of how the scheme will operate to emerge.He said: “At face value, the scheme sounds like a great and extremely timely opportunity for the small business community.

Rapid growth forecast for online shopping

Internet shopping is set to defy the economic downturn, with higher numbers of people using their credit cards to buy goods online.

A report from Verdict Research shows that total online spending is set to grow from £2.4bn this year to £30bn in 2013 - with branded items such as electronic goods helping to drive up sales.

If the forecast proves correct, it would mean that roughly £1 of every £10 spent on retail goods is transacted via the internet in four years' time.

Verdict Research also identified credit card driven online sales as a potential recession-buster for vendors.

The total retail sector is predicted to contract by 0.6% in 2009, but the online market is on course to grow by 13% over the same period.
Malcolm Pinkerton, senior retail analyst at Verdict Research, commented: "The more affluent groups, who do still have money to spend, continue to appreciate the internet for its convenience, making the channel doubly resilient to the downturn."

He added: "The key for individual retailers is to formulate two clear strategies: one for succeeding through the recession and one targeting growth beyond this, as the online channel begins to approach maturity."

Customers using credit cards, rather than debit cards, to purchase goods online enjoy greater legal protection from fraud.

Section 75 of the Consumer Credit Act allows cardholders to claim against their card issuer, as well as their supplier, if they suffer breach of contract or misrepresentation for items costing over £100.

Increase in credit card rates noted

Card rates top 18%. Credit card costs continue to increase, despite an unchanging Bank of England lending rate.

The average APR offered by UK providers - including those for low rate credit cards - was found by a financial website to have risen above 18% over the past month.

This rising trend comes after the Bank of England embarked on an aggressive rate-cutting policy.

Today, the Bank confirmed that the rate would be held at its current level of 0.5% - the lowest-ever in the institution's history - for another month.

The lending rate stood at over 5% at this time last year.

In theory, reducing the Bank rate would have a knock-on effect on credit card deals.

However, Moneyfacts.co.uk, which conducted the research, suggested that other factors linked to the recession had pushed the APRs up over recent months.

Michelle Slade, analyst at the site, said: "Rising unemployment means that the risk of customers defaulting on their card repayments has increased, which is being passed on through higher rates."

She added: "Competitive credit card deals can still be found on the market, with 0% balance transfer deals available for 16 months and 0% introductory purchase deals for 12 months, but with the increased risk of default, only those with exemplary credit histories are likely to be accepted for the best deals."