Worst financial money-wasters: Don't get stung
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These days most of us are looking for ways to save money, and there are plenty of financial products out there that claim to do just that.
However, recent research by consumer watchdog Which? revealed that many of those that purport to potentially save you money, are either not worth the paper they're printed on, or could end up costing you more than you save. We check out five of the worst offenders.
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Extended warranties
Which? reports that some 12.5 million people have been lured into these 'peace of mind' warranties for electrical items over the last three years. But the truth is, the big ticket items rarely need repairing within the first five years anyway, with only two per cent of TVs having problems in that time. Furthermore, some staff were found to make "exaggerated claims", and customers were regularly misled about what damage the warranty would actually cover.
Charity credit cards
Well-meaning Brits might jump at the chance to donate to charity by way of a credit card. The idea is that you give as you spend, without paying an extra cost. But it turns out you might be better off opting for a cashback credit card, and donating what you get back each month instead.
ID fraud protection policies
Identity theft is a very real possibility in today's high tech world, and these policies tempt customers by claiming to cover fraudulent bank transactions made on your account. However, unless you have been grossly negligent, your bank will cover any losses that arise from fraud, so why pay for something you're already getting for nothing?
Over-50s insurance plans
Any daytime TV viewer will have spotted the ads for these over-50s plans, which pay out a lump sum when the policy holder passes away. But at a late stage of the game, the chances are you'll have paid in much more than they will pay out, and Which? advises that you could save more by just investing the cash in an ISA over the same period of time.
Debt management fees
Those with money troubles will be no stranger to cold calls offering debt management plans. These firms help you manage your debt by dealing with creditors and establishing an affordable repayment plan, but you'll pay them for the privilege. Instead, talk to a free debt advice service such as the National Debtline, or the charity StepChange, which can do the same thing without the fees.
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Other money-wasters named and shamed by the Which? research were gift cards or vouchers, which are worthless should the company be made bankrupt, healthcare cash plans, which reclaim a percentage of everyday medical treatments like dental check-ups and eye tests, and card protection services, which cover stolen cards of car keys. Tracker funds and structured deposits were also flagged as a potentially expensive waste of cash.
Have you been stung by any of the above money-wasters? Leave your comments below...
