Asking your bank the right questions could help ensure you don’t fall victim to common financial mistakes.
It's not as though banks keep important information a secret or lie to us, but you often have to know where to look if you want all the facts about a new product or account.
Before committing to a new deal, it’s worth scouring the fine print, frequently asked questions and summary boxes.
In many cases you could get a better deal if you ask these five probing questions.
QUESTION ONE: Will I definitely get the advertised rate?
ANSWER: There’s a pretty decent chance you won't. Since new European rules came into effect under the Consumer Credit Directive last year, credit card and loan companies are only obliged to offer the advertised rate (or representative APR) to 51% of successful applicants.
If you have any blemishes on your credit profile, it’s unlikely you’ll receive the most competitive rate.
QUESTION TWO: Why has the interest rate plummeted on my savings?
ANSWER: In order to attract new savers, banks often offer market-leading rates that include a ‘bonus’ for a limited period – after which you may get a much lower return.
Derbyshire’s NetSaver is a perfect case in point. Despite offering a top easy access rate of 3.06% for 12 months, the rate drops to 1% after 30 November 2013.
QUESTION THREE: Will you give me a better deal?
ANSWER: If your bank (or any financial company) offers a more competitive deal than the one you currently receive, it doesn't hurt to contact the company and ask to be transferred to the cheaper offer. Remember this strategy has a greater chance of success if you always make payments on time and stick to the terms of your contract.
QUESTION FOUR: What is the total amount repayable on my loan?
ANSWER: When it comes to a personal loan, you should never simply look at the representative APR to assess how much it will cost to borrow money. This figure only tells you how much interest you will be paying in one year and not the lifetime of the loan.
Finding out the total amount repayable will tell you the exact cost of borrowing including any fees and charges.
QUESTION FIVE: Do I really need this product?
ANSWER: In many cases, banks will try to market products that may be of very little use to you. If it's a fee-paying current account, ask yourself if you would really take full advantage of the benefits. Likewise, you may not need identity theft insurance ­– as long as you haven't been negligent with your personal details a bank should reimburse your losses if you are the victim of identity theft.
**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**
Where to get cheap quotes Check out more... When to obtain new quotes Click here now.. Why you need new quotes
Where to get cheap quotes Check out more... When to obtain new quotes Click here now.. Why you need new quotes
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