From today (1st February), cardholders will be able to earn five per cent cashback on purchases in the first three months of use up to a maximum spend of £2,000.

Following the conclusion of the deal, the card offers 1.25 per cent cashback on all purchases, with all cardholders also given the opportunity to receive a loyalty bonus of 2.5 per cent during their anniversary month every year.

Julie Hay, head of credit cards at American Express, claimed that one of the most attractive points of the credit card is its simplicity.

She said: "The average family spends approximately £14,300 a year on everyday goods and services that could be purchased using a credit card. 

"Rather than splitting this spending across debit and credit cards, people should think about consolidating as much of their everyday spending as possible onto a cashback card to maximise the payback they can earn."

Posted by Jack Ramsey

Brits are also letting their nest eggs grow, with savers making a net withdrawal of £100 million in December 2011, compared to a net withdrawal of £3.7 billion in the same month of the previous year.

Adrian Coles, director-general of the BSA, expressed his delight that savings balances had increased but was cautious about the future.

He said: "It is clear that savers are still struggling to save as much as they would like, or are choosing to use spare cash to pay down debt instead.

"The fall in the rate of inflation may offer some breathing space to households but, if conditions in the labour market continue to deteriorate and wage growth remains low, household finances are likely to remain squeezed for some time to come."

Posted by Sarah Nyman

A survey from consultancy firm Accenture has shown that the number of current account customers that are satisfied with their bank has risen from 56 per cent to 60 per cent over the past 12 months.

Furthermore, the number of customers complaining about their bank fell by four per cent to 13 per cent.

Despite the positive figures, just 43 per cent of respondents believe their bank is transparent and fair, while the same proportion of account holders think that their bank provides good value for money.

Peter Kirk, head of Accenture's banking distribution and marketing services in the UK and Ireland, said: "These results show that the banks' efforts to fix underlying service issues and engage better with their customers are working.

"However, while customers may think their own bank is doing a decent job, the banking industry as a whole still has a long way to go to rebuild its reputation and win back the advocacy of its customers."

Posted by Jack Ramsey

Annie Shaw, founder of financial advice website cashquestions.com, claimed that those aged 60 and over spend the majority of their money on goods and services which have increased in price rapidly in recent months. 

She said: "Inflation for older people tends to be higher than the headline rates published by the government, because older people have a higher percentage of outgoings [on] things like domestic fuel, food and possibly rent.

"The things that are going up in price tend to affect older people much more. Although everybody is feeling the pinch, older people are feeling it perhaps more than other sections of society."

Ms Shaw advised older Brits to review their finances to ensure their outgoings are as little as possible.

Her comments follow the publication of a survey by Age UK which showed that more than half of people aged 60 or over claimed it was more difficult to live on their incomes than a year ago.

Posted by Sarah Nyman

Insurance firm Aviva has published its Family Finances report which shows that the typical family debt, excluding mortgages, is now £7,944, compared with £5,360 in January 2011.

The figure, which includes credit card debt, overdrafts and other personal loans, accounts for around a third (32 per cent) of average annual household take-home income.

Although families have benefitted from a seven per cent rise in income over the last 12 months to take home an average of just under £25,000 a year, the rising cost of living has cancelled out salary rises.

Louise Colley, head of protection sales and marketing at Aviva said: "While average incomes have increased over the past year, the prices of essential goods and services have also increased, meaning families are struggling to keep up.

"Many appear to have acclimatised to this economic environment by shopping around and seeking to minimise their spending in certain areas."

Posted by Jack Ramsey

Which? has called on the government to put more pressure on the banks to provide easily understandable information about the cost of unauthorised overdraft charges after research from the firm highlighted current complexities in the system.

Which? asked 12 people to work out the cost of an unauthorised overdraft relating to 48 mock accounts at high street banks such as HSBC, Natwest and Santander.

The participants, which included a maths PhD student, only got seven out of 48 correct between them.

The charges for the same large unauthorised overdraft could range from £66 to £150, with HSBC found to charge the highest amount out of all the banks surveyed.

Peter Vicary-Smith, Which? chief executive, claimed that previous reforms announced by the government to tackle unfair overdraft charges do not "go far enough".

"It's extremely disappointing to find that bank charges are still too high, too complex and impossible to compare," he said.

"It's essential that the government gives the new financial regulator the powers to limit these charges and to challenge their complexity."

Posted by Jack Ramsey

Independent think-tank the Resolution Foundation has published a study called Squeezed Britain which analysed the effect the global financial crisis had on low-to middle-income (LMI) households.

This group, which has an average household income of £25,600 before tax, have seen their wages largely stagnate since 2003 but have seen the price of essentials soar. In fact, a total of 41 per cent of LMI households' income is spent on housing, energy, food and transport.

With the government set to cut tax credits over the coming years and benefits and wages also likely to fall, the report claims it be another eight years for these households to have the same living standards they did in 2007.

The study said: "Job insecurity and low pay are the pervasive feature of Squeezed Britain.

"Theirs is a daily struggle to keep up with the rising costs of essentials and to meet goals such as saving or buying a home."

Posted by Jack Ramsey

Rasheed Ogunlaru, life coach and motivational speaker at rasaru.com, urged UK consumers to consider ways in which they can stretch their finances further in order to ride out the current financial situation.

He said: "It's increasingly important to be resourceful in [economic] climates like these. For many young people nowadays, saving money and the job market may be tough, [so] it is important to think about ways you can move yourself forward."

Mr Ogunlaru gave examples of certain situations in which finances could be stretched, such as enlisting the help of friends to decorate a new property rather than paying for a professional job.

A recent study by The Bank of England revealed that British households have around £46 less a month to spend, representing the fifth successive year that disposable income has fallen.

Posted by Sarah Nyman

Robin Ellison, head of strategic development for pensions at law firm Pinsent Masons, was sympathetic of the fact that young adults in the UK may have to prioritise their financial commitments such as paying off their student loans or the rent ahead of savings.

However, there are a number of benefits for those that can find the funds to begin saving from an early age.

"It's really good if they can save money early on, because the effect of compound interest is unbelievable," he said.

"So the sooner they start the better it is, but it's very understandable that they have other priorities."

Mr Ellison added that, although young people "need to think longer-term", the rising retirement age means they will have even more time to prepare for their financial futures.

Recent figures from the Pension Protection Fund found that the UK's private pension deficit has increased to a record £255.2 billion, with businesses being put under increasing pressure to plug the funding gap.

Spanish bank Santander has published a report which shows that the number of credit card transactions in the UK last year rose by one per cent compared to 2010.

Despite the rise in use, the total value of credit card transactions made last year fell by four per cent as Brits cut back on the amount they spent on luxuries.

Credit card spending in sport and toy outlets dropped by 24 per cent per user, while travel agencies posted a 13 per cent fall in revenue from credit card sales. Meanwhile, credit card spending on utility bills and at petrol stations increased as Brits focused on the essentials.

Callum Gibson, managing director at Santander Cards, said: "During times of austerity, you'd expect cutbacks to hit non-essential items like holidays and clothes, and our customer data supports this.

"However, while we've seen a drop in overall spend people are using their cards more - as demonstrated by the increase in number of transactions."

Annie Shaw, editor of financial advice website cashquestions.com, claimed that one of the key benefits to using a credit card is the fact that holders can learn how to budget effectively during an introductory offer period.

Another advantage of credit cards is the various types of protection against default available under the Consumer Credit Act, she added.

"For instance, if you are ordering something, perhaps in the January sale, and the company goes bust in the meantime, you can recover your money if you pay by credit card under section 75 of the Consumer Credit Act," she said.

"So that is a very good reason to use your credit card, even if you have got loads of money in the bank.

A recent study by the Post Office revealed that more than a third of UK credit card holders will rely on credit cards to pay for essentials in January.

Posted by Jack Ramsey