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By Claire Stevenson Staff Writer
Wednesday, 24 September 2008
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Personal finance kung fu
Sure-fire ways to protect yourself against the credit crunch
- Get savvy with your credit card when buying items over £100.
- Protect your deposits in your banks – you’re guaranteed protection on £35,000 per financial institution, as long as they’re regulated.
- You won’t go AWOL if you’re protected with ATOL. Book your next holiday with an operator that’s part of the ATOL scheme.
Related Money News
See our other recent related news stories:
Collapse of XL hammers home the need to book holidays on a credit card
If you haven't yet worked out that you should always book your holiday with a credit card, just ask one of the poor suckers left stranded by XL airlines, says David Stevens.
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PERSONAL finance has all got a little worrying of late, with the collapse of banks, share prices plummeting, pensions disappearing into smoke and companies folding like paper at an origami festival
Don’t allow yourself to be a sitting duck though.
Strike back with these handy kung fu moves designed to protect your wallet from the onslaught of the UK’s economic downturn.
Kung Fu Move #1 – Get credit card savvy
With recession looming there’s a chance that more businesses will follow in the footsteps of wedding gift firm Wrapit! and go bust.
But there’s one handy move you can use for damage limitation – pay with a credit card when buying anything over £100 (but less than £30,000) and you could get your money back from your credit card issuer under consumer credit laws.
But you’ve got to prove there’s been a breach of contract on the supplier’s side and only certain providers – namely Visa and Mastercard - offer this protection.
Savvy shoppers will pick a credit card that offers protection against businesses biting the dust and lets them earn rewards such as cashback or retail rewards.
 Compare credit cards offering cashback rewards
Compare credit cards offering retail rewards
Kung Fu Move #2 - Protect your account deposits
A distinct ‘clunk’ could be heard across the UK last week - the sound of people’s jaws dropping as HBOS’ shares did.
It’s no surprise that this fresh attack of the credit crunch has had customers wondering if their money is safe in their bank accounts.
Well fear not and rest easy – the Financial Services Compensation Scheme guarantees up to £35,000 per customer, per authorised financial institution.
If you’ve got more than £35,000 with your bank, consider switching the rest to another bank.
Compare savings accounts here
Compare current accounts here
Kung Fu Move #3 – ATOL, not AWOL
A couple of weeks ago the XL holiday group folded leaving customers abroad wondering how they’d get home. Some holidaymakers were flown home. Those that weren’t had to sit and wait it out, leaving friends, family and bosses in the lurch.
But why is this? Tour operators and firms selling air holiday packages and flights in the UK are required by law to hold an ATOL licence, meaning holidaymakers are protected against being stranded abroad or from losing money, if the tour operator goes bust.
In XL’s case, people flown home were covered by ATOL, and those that weren’t, erm, weren’t.
Insurance firms often exclude holiday and airline failures from cover because the outcomes can be expensive. The best way to ensure protection is to check at the time of booking whether the firm is covered by ATOL. The ATOL website has a handy ATOL checking tool.
To be extra safe, always book your holiday by credit card. Just make sure it’s a Visa or Mastercard.
Compare credit cards
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