Don’t be beaten by postal strikes
The three-day postal strike is set to cause havoc next week, when Royal Mail workers stage a walk-out from Thursday 29 October.
Households have already suffered months of regional postal strikes. The last national strike, in October 2007, saw two 48-hour nationwide walkouts by Royal Mail staff that, unsurprisingly, brought most deliveries grinding to a halt.
With thousands of bills and financial statements liable to get caught up in the industrial action, it’s vital you take steps to ensure you don’t end up financially disadvantaged by strikes.
CREDIT CARD BILLS
Unless you have a direct debit payment set up to pay off your credit card, the chances are you’ll wait until your statement hits the doormat each month before making a payment. As we all know, time has a habit of flying by, and you may not notice if your statement fails to turn up on the usual day.
Failing to pay your credit card bill can be disastrous. As well as being hit with a charge for missing your payment, you may also lose any preferential rates. For example, some credit card providers offering 0% introductory deals have a clause that gives them the right to take this away and instead start charging the typical APR as soon as just one payment is missed.
The other risk is that missing a payment will affect your ability to get credit in the future.
Your credit report outlines all your credit agreements and also gives each account a status code that shows how you have managed your repayments. Lenders look at your credit report when you apply to borrow money (such as a mortgage, for example); while it is unlikely they will reject your application on just one missed payment, it’s probably a risk you don’t want to take.
What to do
Contact your credit card providers as soon as possible to find out when your next bill is due, what the total outstanding balance is or (if you are unable to clear the balance in one go) the minimum payment required.
Your provider may allow you to pay the bill over the telephone, or online. If not, you may have to make a trip into the branch to pay your bill over the counter.
Barclaycard has already advised its customers that they can pay their bills using its new online account management, mybarclaycard. This offers a variety of secure online payment options, including one-off payments and the setting up of regular direct debits.
If you do miss a payment as a result of the strike and are concerned about your credit rating, then remember that credit report also allows you the opportunity to get your point of view across to lenders.
Neil Munroe, director of external affairs at Equifax, says: "People can include a statement on their report which explains why they missed a payment which lenders have to read. They don't have to take it into account, but at least this gives you the chance to tell your side of the story."
If you pay for your energy or water usage via direct debit, the postal strike won’t impact this. However, if you pay by cheque or similar once your bill arrives then you could be in trouble as missing a payment could result in a penalty or even your supply being cut off. Again, your credit record could be affected.
Other bills to consider include:
Phone and broadband bills
What to do
Call your utility company and find out when your next bill is due. Providers will be aware of postal strikes and should be sympathetic to the impact this will have on billing and payment systems.
Hopefully, if you contact your provider to explain your concerns, you will be spared any charges for missing your payment.
Bear in mind that you may also be able to make other arrangements to pay your bills – ask your supplier to go through these with you. As a rough guide, most bills can be paid at a Post Office counter using cash or cheques.
You could pay by telephone or by transferring money from your bank account either online or in-branch. If in doubt, call your utility company and find out how to do this.
The deadline for postal tax returns is 31 October – if you have yet to send your return back to HM Revenue & Customs, then the postal strike could pose a problem.
Remember, you can complete your tax return online – the deadline for this is 31 January 2010.
ALTERNATIVES TO 'SNAIL MAIL'
If you do have an important bill that needs paying, then consider using Special Delivery – costs start at £4.95 and Royal Mail guarantees next-day delivery regardless of any strike action. You could also use a private courier.
It may be worth posting any items that must be sent (birthday cards, for example) as soon as possible to avoid the disruption caused by a national strike. As an alternative, consider sending an e-card using the internet and your email account – it’s normally free and your greeting will be sent instantly. You can also use email and fax to send documents such as invoices.
Finally, Royal Mail strikes should make you think again about setting up direct debits to pay bills such as your credit card or utility costs. As well as avoiding the stress of payment or bill delays, paying your utility bills by direct debit tends to be cheaper than other methods.
A report containing detailed information on a person’s credit history, a record of an individual’s (or company’s) past borrowing and repaying, including information about late payments and bankruptcy. It also includes all applications a person has made for financial products and whether they were rejected or accepted. Your credit report can be obtained by prospective lenders to determine your creditworthiness.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
This is used to compare interest rates for borrowing. It is the total (or “gross”) interest you’ll pay over the life of a loan, including charges and fees. For credit cards where interest is charged at more frequent intervals, the APR includes a “compounding” effect (paying interest on interest). So for a credit card charging 2% interest a month (equating to 24% a year), the APR would actually be 26.82%.