Broadband Users Advised To Consider Costs Of Their Contract

Although it may not be the most exciting thing to do, it is important for broadband users to take the time to check the small print to their contract.

However such inaction could potentially leave customers out of pocket, as the price comparison website revealed that just under a quarter (24 per cent) of Britons have been hit with charges and fees which they were not expecting to pay. Meanwhile, one in four consumers were indicated as only skimming over the details of their contract. So claims moneysupermarket in which a recent study showed that some eight per cent of people state they not bother reading the terms and conditions of their broadband service.

Among the hidden charges that consumers often discover that they are landed with include moving and installation costs. Meanwhile, paying for bills, exceeding download limits and the expense of calling a helpline were pointed out as additional ways internet users might find themselves inuring financial pressure. However, moneysupermarket indicated that such charges vary among broadband suppliers.

It was pointed out that Direct Save and Virgin charge their consumers 40 and 30 pounds respectively in one-off set-up fees. Research from the firm also showed that Virgin charges an extra five pounds per month for those consumers who do not pay their bills via direct debit. Meanwhile, those who decide to cancel their contract within the first 12 months of opening it up will find themselves charged around 50 pounds if they are customers with either Be or Direct Save.

Following on from facing a broadband bill which is much higher than expected, it may be possible that people encounter greater difficulties in paying for other household utilities such as gas, electricity and water. In addition, this might impact upon their capacity to meet other areas of financial demand such as personal loans, credit and store cards and mortgage repayments.

Commenting on the research, Rob Barnes, head of mobile and broadband for the price comparison site, said: "With so many offers out there it 's easy to be blinded by the headlines and enter into a contract without thinking about what it entails. Remember, if something looks too good to be true, it probably is. With this in mind its so important customers read their contracts. By not doing this, people are clearly unaware of what extra costs may be lurking in the small print and as a result, could end up with a huge unexpected bill at the end of the month."

Meanwhile, people should also know how much they will be charged for calling for technical advice and exceeding download limits. In an attempt to counter receiving a shock bill, consumers were advised to check their contract to make sure they are aware of any charges for cancelling their service.

Last month, Chris Tapp from Credit Action reported that many consumers are not fully aware of the financial products they sign up to, only to come under financial pressure later on. However as with a broadband package, it is advisable for those looking to take out a loan to check the terms to their contract before signing on the dotted line. In selecting this type of loan, borrowers may find that they are able to merge demands for repayment across a number of sources, such as household bills and credit cards, into a single low-cost monthly outgoing.

For those consumers looking for a way in which to reduce financial pressures taking out a consolidation loan may be advisable.

Benefits Of Low Introductory Rates

If you want to know more about how to use the benefits of low introductory offers without the dangers then here is some information that can help. Although these offers can have hidden dangers and charges, there are benefits to low introductory rates. These low rates hope to entice you into getting one of these credit cards, and with such great rates on offer it is not surprising that many people look into them.

If you watch television or surf the net, it is likely that you have seen one of the many adverts for low introductory credit card rates.

Low APR offers

One of the most common introductory offers is to have a low APR on the credit card for a certain period. These low APRs can vary from around 5% all the way down to 0%, and can last from 3 months to a year. The benefit of having a low APR is that you will pay less interest on the credit that you use. If you can get a 0% APR offer then you are effectively getting your credit for free during the introductory period.

Using low APR offers

Low APR offers often come with hidden charges, such as high balance transfer fees or a much higher typical APR after the introductory period expires. If you want to get a low introductory APR rate, look at the list of other charges, as well as how much the APR will be after the introductory period has finished. The best way to use a low introductory rate is to spend on the credit when you have the low rate and then pay it back before the rate is finished. That way you can make a large purchase over a few months without having to pay any interest on it.

0% balance transfer rates

Another typical introductory rate is to offer 0% on balance transfers for a period of time. If this is coupled with a low APR, then you can use this card to transfer any existing debts you have in order to pay them off quickly. Of course, these cards also have hidden charges like fixed fees for balance transfers as well as high rates after the initial period. Use 0% balance transfer rates to help you to pay off debts more quickly.

Keeping that low rate

Although you might be offered a low rate for around 6 months or a year, this is dependent on you using the card properly. If you pay late or go over your credit limit, you could find your introductory rate is taken away and you are put onto the much higher regular rate. If you are getting a card simply for the low initial rate, make sure you pay on time; otherwise you could end up paying a lot more for your credit.

Switching cards

However, if use low introductory offers correctly, you can save yourself a lot of money on credit card interest and bills. Try and keep some long-term accounts going, or find a card that has a good rate after the initial introductory period. However, switching cards can be a hassle, and it can reflect badly on your credit report if you are continually switching accounts.

This can work well if you maintain your payments and spend wisely. There are many people who use introductory rates to their advantage by continually switching from one card to another in order to keep their payments low.

The Dangers Of Introductory Loan Rates

If you want to know how to separate the good offers from the bad, then here is some advice for you. Being cautious will help you to avoid being conned and ending up paying more than you should. Although there are many excellent loan rates and offers out there, it pays to be cautious about introductory loan offers.

If you are tempted by an offer of a loan that seems too good to be true, then it probably is.

Advance fees for a low rate

Once trick you should avoid is the companies who ask for an advance loan fee which will be returned to you after a period of time, and in exchange you will get a really low interest rate. These companies are usually bogus, and you will probably never hear from them again, having lost your advance fee and received no other funds. Always make sure the companies you apply for loans from are reputable companies with an excellent history.

Low rates but high fees

Although some low rates really are low, they come with other hidden charges and fees that will cost you large sums of money. You might have to pay large processing fees, or the fees for late payment and early repayment might be extremely high. Before taking advantage of the low loan rate, make sure that the other charges are not going to cost you huge amounts of money.

APR advertising not always true

Although you might see a great offer for a loan, the APR that they advertise might not be the one you can actually get. This APR is probably true, but is only given to people with perfect credit records over a certain period of time. In general, the APR you can get will be higher than this, meaning the loan will not be as great an offer as you think.

Pre-approval letters

Another danger when looking at introductory loan offers is pre-approval letters. Although less common than credit card letters, getting letters through the post guaranteeing a great loan are getting more common. All you have to do is fill in the form and you will have the loan. However, the lenders might employ the bait and switch technique. This means that the amount you are pre-approved to borrow at the great interest rate will be replaced with a lower amount at a much higher rate. You have already signed the agreement and might be stuck with the loan. Make sure that with any loan you apply for that you are really getting what you want.

Good offers are out there

However, as long as you shop around for a reputable loan deal and borrow only what you can afford, you will avoid the dangers of introductory loan offers. The only danger with this is that you will borrow more than you can really afford to repay, which will leave you in serious financial difficulty. Lenders are more eager to lend you money than ever, and are consistently reducing their interest rates in order to entice customers.

Despite the dangers, there are plenty of great offers available.