Need a credit card? Tough. Have an affordable loan instead.

23 September 2010

Iain Duncan Smith and His Amazing Invisible Piano

Are you one of those people who can't get a loan? You're probably a writer then. Well done you. There's some news afoot that may be of some interest to you.

Invisible piano playing and Work And Pensions Secretary, Iain Duncan Smith, has launched a pilot scheme to help you lend money if you are unable to obtain a conventional loan. This scheme has been set up in the West Midlands and is called My Home Finance, which hopes to stop people using loan sharks. There is a catch though - the interest you'll get charged with is higher than the maximum by law that credit unions can ask for.

In numbers, that means it will charge 29.9% APR and then rise to 49.9% APR in April. That's nice isn't it?

To get this loan, the BBC say that you'll have to go through a 45-minute interview which will determine if you're even slightly likely to be able to repay the loan. If not, presumably, you'll then have to go to a loan shark or sell your teeth to a pawn shop or something.

Because you won't be getting a decent credit card deal. The banks are limiting their best deals to existing customers.

Bank of Scotland, Barclays, Halifax, HSBC, NatWest, RBS, Santander, and The Co-operative Bank all have credit cards that are available only to those who bank with them, according to Which?

This is down to the fact that banks are keen to sell a range of products and services to their existing customers rather than get new ones in. Basically, if you see a better credit card deal, then you're going to need to sign up for multiple things first.

TOPICS:   Credit Cards   Banking   Loans

13 comments

  • mistersmee
    "has launched a pilot scheme to help you lend money if you are unable to obtain a conventional loan." I think you mean "borrow money", not "lend". Next you'll be telling us "that'll learn them" and be itching a scratch.
  • Noghar
    A few years ago my brother went to a presentation given by a banker making lots of money out of bad-risk loans. The principle, the banker explained, was to charge bad risks and defaulters much higher rates of interest to cover the risk of them not repaying the loan. My brother put his hand up. 'You're saying that if someone has refusd or been unable to repay a loan before, you're going to ask them to pay more next time, and that'll make the loan more secure?' 'Exactly' says the banker smugly. My brother thought he must be missing something, because he could see a rather large hole in this logic, and the banker couldn't. Fast forward five years, and here we all are... fuct. Except for my brother. He's doing OK. Git.
  • Alexis
    Which? don't you mean Which!
  • Amy W.
    I'm not quite sure what Which? are whinging about regarding credit card deals. Tesco, Sainsburys, Barclaycard, MBNA, Virgin and the AA all offer credit cards with at least 12 months of interest free purchases. None of these cards require you to bank with anyone in particular, or to "sign up for multiple things".
  • Paul C.
    Live according to your means - aside from a mortgage - I believe credit/loans should be the very last resort for anyone who is financially challenged. Failing that - reconstruct some natural disaster in your back garden involving water (or lack of) and some (preferably brown and underfed) children. The DEC will come crawling and put out an appeal on your behalf. Quids in.
  • Junkyard
    Paul - why is borrowing a two hundred grand for your house fine, yet borrowing a few grand for hookers and blow is unacceptable?
  • Paul C.
    Junkyard -Good point, well made. I'm off to Ipswitch via Tesco. Anyone want anything?
  • Marky M.
    Yeah can you get me a chicken in a can please, a Kit-kat, some C-4 and Vernon Kay's address? Cheers pal.
  • bawbag
    You need a Fez on the head of IDS. Need a loan? Justlikedat...
  • Kevin
    'Paul – why is borrowing a two hundred grand for your house fine, yet borrowing a few grand for hookers and blow is unacceptable?' Because the bank can get your house back when you inevitably default, if you had somethingyou could give the bank worth the amount you want to spend on hookers and blow I don't think they'd care! Why should they allow you to borrow money when you've got no evidence of being able to pay it back? Noghar: It doesn't necesarily make it more secure but I think the idea is that they are effectively scaring the borrower into not doing the same thing again.
  • warwick h.
    What do you expect from one of the tory old guard whose main aim in life is is to return the working classes to the gutter and put kids up chimneys, I was going to say down the pits but he was one of those twats that closed them What an odious toad.
  • Kevin
    Warwick, you go open them up again if you think they are financially viable. Lots of people will be very happy.
  • Budgeting M.
    Why should they allow you to borrow money when you’ve got no evidence of being able to pay it back?

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