Currency prices can be up to 9% more expensive at Gatwick, Heathrow and Stansted compared with other foreign exchange outlets, a survey by leading foreign exchange firm Currencies Direct has revealed.

This means a family changing £1000 for a European holiday are £104 worse off buying euros at the last minute, rather than ordering in advance from a specialist firm which can find the best available rate.

The company surveyed exchange rates for euros and dollars at bureaux de change at Gatwick, Heathrow and Stansted airports and also checked high street deals on offer at the Post Office and Marks & Spencer.

The biggest difference between the best rate available from Currencies Direct and an airport bureau de change was at Thomas Cook in Heathrow airport, where buying US dollars were 9% more expensive.

Over 14 million Britons went on holiday abroad between July and September 2009. If half of these travellers exchanged just £500 spending money at an airport bureau de change before going on holiday to Europe, they could be saying goodbye to £493 million pounds.

Specialist providers apart, the best exchange rate for buying euros was at The Post Office (2.3% more expensive than Currencies Direct) and also The Post Office for US dollars (2.5% more expensive than Currencies Direct).

Phil McHugh, senior foreign exchange dealer at Currencies Direct, said: “Our survey highlights the big difference in currency exchange rates offered between the high street, airport bureaux de change and specialist providers.

“People often plan their foreign holidays well in advance, shop around for the best deals and book early to save money, yet they seem to leave their common sense at the airport drop off when it comes to changing holiday cash.

“Travellers should take a few minutes to check exchange rates online or over the phone in advance of their holiday and arrange with a foreign exchange specialist like Currencies Direct for their money to be delivered to their home or work, saving themselves time, hassle and cash in the process.”

Foreign exchange rate comparison table (based on rates effective 29 July 2010 at 1 pm)

Holiday Money Provider	Euro vs Sterling	% more expensive than CD	Loss on £500 compared to CD	Dollar vs Sterling	% more expensive than CD	Loss on £500, compared to CD
Currencies Direct	€1.1940	-	- 	$1.5610	-	-
Heathrow – Thomas Cook	€1.09	8.7%	£52	$1.42	9.0%	£70.50
Gatwick – Moneycorp	€1.1	7.8%	£47	$1.4309	8.3%	£65.05
Stansted - Moneycorp	€1.1	7.8%	£47	$1.4309	8.3%	£65.05
Post Office	€1.1665
 	2.3%	£13.75	$1.5205	2.5%	£20.25
M&S	€1.1570	3.1%	£19	$1.4982	4.0%	£31.40

Currencies Direct has ten top tips for people heading on holiday this summer:

1. Think ahead about your currency needs and avoid changing your money at bureaux de change, particularly at airports
2. Shop around for the best rate – don’t just automatically go to your bank or post office. Specialist providers can offer much better deals
3. Beware of hidden charges and high commission rates. A good headline rate does not necessarly mean the best value for money
4. Watch the currency markets and consider buying your holiday money a few weeks before you travel if the prices are favourable
5. Talk to a specialist foreign exchange firm about the best time to buy or sell
6. Avoid poor exchange rates by taking travellers cheques or currency cards with you instead of using credit or debit cards for large purchases
7. Travellers cheques or currency cards can also help avoid the hefty fees banks and credit card companies charge for using ATMs overseas
8. If travelling to the developing world or visiting several countries, consider taking US dollars, which can often be used instead of local currency
9. Use an established business to buy or sell currency, particularly if overseas. If you are not convinced, walk away – it is your money
10. If you are a regular traveller, consider fixing your exchange rate for future currency purchases with a specialist provider

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Even though the financial markets have been through turmoil, there are still a wide number of credit cards available for those with good credit histories. There are even cards that offer cashback or other goods and services based on the amount spent on the card.

There is only one popular card that offers actual cash as opposed to other rewards for use. The American Express Platinum Cashback card provides up to 5% cashback, up to a maximum of £100, for the first three months on all purchases. Following the initial three month period, the cashback reduces to 1.25% but is not capped. There is no annual fee for holding the card but you must have a household income in excess of £30,000, be a homeowner and employed with no defaulting credit history to apply!

Amongst the lesser know cashback cards are those provided by Barclaycard (Cashback offers 1% on all purchases or cash withdrawals on up to £2,000 per annum), The Co-Operative Members Cashback card (1% on purchases from Co-Operative stores) and Egg (1% on all purchases from MasterCard outlets worldwide). Bank of Ireland offer two cards (MoneyBack Gold and MoneyBack Standard) that provide 0.5% cashback on the first £15,000 of eligible annual spending.

Smile and the Leeds Building Society also have cards where 0.25% of cashback is earned on all spend up to the credit card limit.

All of these cards offer a range of alternative benefits so choosing the right one depends on what you need. Many offer zero or low interest balance transfers for periods of up to 3 months. The majority charge interest on new purchases at around 16% APR although some charge up to 20% APR so if you plan to use the card as a means of borrowing then select the lowest rate option. With balance transfers it is important to remember that any payments made to the account will reduce the zero or low interest balance first and not the recent standard rate purchases.

Whilst there is no such thing as free money, cashback cards can be a way to make your spending on credit cards more efficient – especially if you are in the habit of clearing your balance each month in full.

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A credit score is a way for lenders to decide how much of a risk they are taking by lending you money. The actual credit scoring system used will vary from lender to lender and different companies will have different attitudes to risk – so although one company may reject you for credit, another may be happy to give you a credit line.

It is a myth that there is a universal credit rating or a credit ‘black list’. However if one company believes you are too high a risk and won’t lend you money, it is highly likely that many other companies will take the same view.

Although every company has their own way of credit scoring applicants, there are a few universal themes.

The first is your credit application form. This form will give an overall picture of what your finances are like – how much you earn, your family size, reason for wanting the credit line and whether you are a home owner.

The next is your credit history with the company itself. For example a bank may look at your bank account history to judge whether you should be allowed a credit card or not.

Then, there are the credit reference agencies. The main two credit reference agencies are Experian and Equifax. Most lenders will use at least one when assessing you. These credit reference companies hold information about your credit on file and they can send this data to anyone who is about to lend you money. However, the two companies may hold slightly differing information on you.

So what information do these agencies actually hold? The first is information from the electoral role. This information is freely available to anyone, and it is important that if you move address, you ensure you register on your local electoral roll. Credit reference agencies also hold information on court records – companies can see if you have a history of debt problems such as CCJs or bankruptcies. The more of these financial problems you have, the less likely you are to get credit. Finally, they also hold financial data on you. This data will show how many credit cards and loans you currently have, the credit limits on the cards, how much credit is left on the credit cards, your payment history, how many defaults you have, and how many other lenders have run a search on you recently.

The lenders will assess your application from all of these financial factors before making a decision. Remember that just because one lender will not give you the facilities you require that others will make the same decision. Also, the rate of interest you are given on your line of credit may depend on how good your credit rating is – the higher the risk you are deemed to be, the higher the interest is likely to be on your line of credit.

Bear in mind that lenders are looking to make profit. If you have a poor credit history you may be rejected because the lender may not believe you have the means to pay back the money. However if you have an excellent credit rating you may also be rejected. This is because if you pay your outstanding balances in full each month, the only money the credit provider will make from you is the percentage taken off each credit transaction – interest charges are far more lucrative.

Checking your Credit File

There are billions of pieces of data held by the credit reference agencies. To this end, mistakes may happen. Identity Theft is also on this increase. It is therefore an excellent idea to check your credit file on a regular basis to ensure that everything is in good shape and there are no anomalies held on your file.

When you look at your credit file, first check your personal details are correct. Next, check all the debts listed are yours and that they are listed correctly. Ensure that the repayment histories are also correct.

If you find an error on your credit file, write to the credit reference agency and request that the details be changed. Depending on the nature of the error, the reference agency may require you to talk to the company who lent you the money before they will amend the file. If the agency refuses to amend your file, you can ask for a ‘notice of correction’ to be put on the file. This means that anyone searching on your credit history can read this note and this may help you to obtain better credit. If you do have to use a notice of correction, ensure that you state the facts and do not embellish the note.

How to Improve your Credit Rating

• Electoral Roll: Ensure you are on the electoral roll

• Application History: Too many credit searches in a short period of time can set alarm bells ringing as it looks as though you are desperate for credit or are unable to handle the debts you currently have. Remember that it isn’t just credit cards, mortgages and loans that will show up as searches – insurance and mobile phone contracts may also leave a credit search.
• Stability: Lenders tend to prefer people who own their own homes as this means that the credit line can be secured (ie if you don’t pay up on time, they may be able to repossess your property). Employed people tend to be less of a risk than self-employed people as they are paid regularly whereas self-employed people can see big peaks and troughs in their income.
• Unused Credit: Cancel any unused lines of credit you may have as this lowers the amount of available credit you have and therefore lenders will see you are able to service all the potential debt you have at your disposal.
• Credit History: Always try and keep up with your repayments. If you are late, this may show on your credit report and this can affect your credit for years to come. If you are having problems paying your debts each month, contact the lender as soon as you are able to – before you start having problems paying the money back if possible – as they may be able to help you restructure your debt and stop you having black marks on your credit file. If you already have a poor credit history, try and build up a better history by taking a small line of credit and servicing it on-time each month as this shows you are able to handle credit without any issues. It will take a long time to rebuild your credit history.
• Joint Finances: Marriage will not affect your credit score. However, if you share any bills, your credit scores will become interlinked and this can impact your personal credit score. If your partner has a poor credit rating it is wise to try and keep your finances separate to ensure you keep your credit rating. If you do have finances which are linked and you split up, write to the credit reference agencies and ask for a ‘notice of disassociation’. This means that their credit history will not be able to impact on your in the future.

Finally, if you are ever rejected for credit and you are unsure why you were rejected, it is always better to be safe than sorry – check your credit file immediately. It may be that there has been a small error or you just don’t fit that lender’s lending criteria, however there is also the small possibility that you have been a victim of ID theft.

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Previously, the big ATM fraud was to use a fake ATM fascia. This fascia would contain a card reader to skim the card details, and a pinhole camera to capture the user’s PIN. Banks have invested heavily in anti-skimming technology and can now detect fake overlays and disable the ATM accordingly. In 2008, it is estimated by the European ATM Security Team (EAST) that ATM fraud grew by 11 percent to 484 million Euro.

Because of this new technology, criminals have had to find new ways to get hold of customer debit card details through ATMs.

So how does it work? The criminals have managed to get a 50kb piece of malware disguised as a Windows process called lsass.exe into the ATMs. This is an excellent choice of name as a PC will legitimately have lsass.exe running on their systems. Lsass.exe helps cache session data so users don’t have to do things such as re-enter their passwords every time an e-mail comes in. However it has no use in an ATM machine.

Once an ATM machine is infected, the malware reads any card which is inserted into the machine and records the account number, start date, expiry date, three digit security code and PIN entered onto the hard drive. PIN data is encrypted before it is sent to the bank, however the malware catches the data before it has been encrypted.

To gain access to the data, the criminal needs to insert a ‘trigger’ card. Once this trigger card is inserted, the malware recognises the card and launches a window on the ATM’s screen with non-standard options. One of these options uses the receipt printer on the ATM to print out all the card data captured. This data is encrypted itself so low-level lackeys can be sent to grab the data without the worry that they will be able to use the data themselves.

The most difficult part of this process is getting the malware onto the ATM in the first place. The criminals must have an insider accomplice to achieve this – and it is believed this is either by coercing shop or bank workers, through bribes or threats, or by using an insider ATM engineer. Once the criminals have access to the ATM itself, installing the malware is said to be fairly easy.

At the moment, the malware is standalone – that is, the malware only affects the ATM is it installed onto. However it is likely that now the proof-of-concept works – and works well – criminals may extend the functionality of the malware to give it network access. And this means that the malware may be able to spread across the banks’ entire networks of ATMs relatively easily by utilising the closed network already in used by the banking system.

At present, chip-and-PIN cards are also immune to the problem as the ATM encrypts the user’s PIN as it is entered, however it is believed that it is only a matter of time before the criminals either work out how to decrypt this encryption, or work out a way around the encrypted PIN.

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The base rate has tumbled and those who overpay their tracker mortgages may find the interest they pay over the term of their mortgage is significantly reduced. Home owners with a mortgage of £150,000 may have seen their mortgage payments fall by as much as £500 a month over the last year leaving them with £500 extra money per month.

By using this ‘extra’ money to overpay the mortgage, it reduces the mortgage debt and also reduces the interest paid on that debt. When rates go up, the interest will be calculated on a smaller balance. The term of the mortgage will therefore either be decreased, or monthly payments will be reduced. If you do overpay your mortgage and you get into trouble later on down the line, mortgage companies are far more likely to allow you to take a ‘payment holiday’ for a few months so paying a little extra in each month is no bad thing.

If you had a mortgage for £150,000 at a rate of 4% and you overpaid by £2.50 a day, you would pay your mortgage off three years and four months early, saving you £13,517 in interest.

The only thing to watch for is some lenders stipulate that you can only overpay by a certain percentage each year, so check your terms and conditions to make sure that you don’t put too much money into the mortgage.

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After April 6 2010, the earliest age at which pensions can be drawn will be raised from 50 to 55, although those who have to retire early due to ill-health will still be able to draw their pensions before they reach 55.

Although there are few people who can actually retire at 50, there are growing numbers of people who are taking their pensions early and dipping in to the interest-free sums locked within. Up to 25% of a fund’s value can currently be taken whilst the rest stays put for true retirement days. Some are also releasing the money in their pensions before they retire as they are worried about the poor returns and want to remove their money for safer havens such as ISAs.

The change in the rules means that some people who are currently able to dip into their pensions if they wish may find that they cannot dip into their pensions next year. Those currently aged between 50 and 54 who have yet to take any money from their pensions may find that as of April next year, they are unable to take the money until they hit 55. Therefore they must think carefully about whether they will want to use some of the cash in their funds before then and therefore remove the cash before the deadline hits.

For those who are planning to take the money early, it is important to remember that the pension’s earnings may then be compromised and the Revenue & Customs enforces strict rules on future pension contributions to ensure that people don’t benefit from a double tax relief by recycling the cash they have taken from the pension by putting it back in.

However, there have been announcements made that anyone who turns 50 before the deadline next year will be able to invest extra into their ISAs to help boost their tax-efficient savings – up to £10,200 in stocks and shares of £5,100 in cash ISAs.

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Business Angels can be the answer. Business angels tend to be entrepreneurs or retired executives who are actively looking to back new companies.

Business Angels will use their own cash and resources to invest into companies – whether the companies are start-ups or established businesses that need a cash injection, perhaps for expansion purposes. Business Angels are good for small cash injections, normally up to around £50,000 although it will depend from angel to angel, and can make very quick decisions whereas Venture Capital firms may take a lot longer to come to a decision and require a lot more extra information.

There are no ‘typical’ sectors that Business Angels will invest in – different angels tend to have their own specialities and interests and thus will tend to invest in particular areas. However they will tend to look for businesses with growth potential and not just lifestyle business that are designed just to provide a nice living for the owner. Businesses with a unique selling point or a competitive edge are the most likely to be successful when looking for business angel funding.

The angel will put some cash into the business for a stake in the company along with some idea of when their invested cash is projected to be returned to them. Business Angels typically also want a say in how the company is run with some hands-on involvement. Because they tend to have a lot of business experience behind them, their advice and experience can be invaluable – and sometimes more valuable than the cash they provide.

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The initial one or two letters in your postcode defines your postal area from 121 main sorting offices. The numbers in the initial part of the postcode then denotes the deliver office. The first number of the second part of the postcode define the postcode sector, of which there are around 10,000. The final two letters of your postcode breaks the address into a group of 1-99 properties. Each postcode on average will serve 15 addresses.

Insurance
Many people will be familiar with insurance companies using postcodes to work out cover – whether it’s car insurance, home insurance or any other form of insurance. Postcodes help define areas with high theft, accidents, floods, subsidence etc and therefore can be used to help work out a premium.

However some insurers are aware that postcodes can be misleading. Norwich Union are an example of this – they have spend millions of pounds creating their own flood risk map as they feel postcodes can be misleading and believe that their own map is more fair to home owners.

Pensions
Postcodes can also be used to give an average indicator of health. Without using medical information, postcodes can be used to give annuity information to some people as annuity rates are based on life expectancy. Thus if you live in an area which is defined as ‘unhealthy’ with a lower life expectancy, you may be quoted a higher guaranteed income than someone in an area with a higher life expectancy. Postcode data used in this way does not take into account your address history – it judges the data solely on your current postal code.

Loans
Some lenders will use postcodes to help put together a risk profile. Mortgages should not be affected by the postcode that you live in, however personal loans or credit cards may. In general, like-minded people will tend to live close together so if you live in an area which has plenty of bad debts, some lenders may feel you are more of a risk than if you live in an area with little in the way of bad debts.

This relates in particular to automated credit scoring systems where quick credit is used, such as mobile phone contracts, mail order accounts or store cards.

Crime
Some areas of the country have higher instances of financial crime such as ID theft than others. If you live in an area with a higher than average level of financial crime, lenders may put higher security measures into place such as using couriers to deliver debit cards rather than ordinary post.

Mailshots
Several companies operate services which group people into particular demographical groups, for example the Mosaic system. By using these groups, mailshots can be sent out by interested companies to their target audiences. Although this is slightly hit and miss, it is better than sending out mailshots blindly.

In these cases, postcodes are used to group together people who are of a similar age, wealth and mindset.

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MoneyTowers.com takes a look at the different mobile phone banking services on offer and explains how much risk is associated with each one.

Text Services
Many banks offer text services – sometimes free, sometimes with a small monthly fee. This mobile banking service sends out SMS alerts to a mobile phone – for example some might send a weekly update of the your bank balance, or will send you an alert when you are getting close to your maximum overdraft limit, or maybe will send an SMS whenever a large payment is made from your bank account.

This mobile banking service is pretty much risk-free as no bank account data is stored on the phone and there is little anyone can do if your mobile is lost or stolen.

Money Transfers
Some banks allow their customers to make basic transactions in their bank account from their mobile phones. For example customers may be able to transfer money between accounts held at the bank, view their current balance and view a mini-statement. Some banks charge for this service, whilst with others, the service comes as part of the bank account package.

More often than not, this service is built on software by Monilink, a company which is half-owned by the banking industry. Several layers of security have been built into the system including a check on the mobile phone that is being used and a passcode must be entered before the customer is logged in. This ensures that if the phone is stolen, the thief is unable to log into the user’s account (unless they also have the passcode).

Similar to your debit and credit cards, never write your passcode down and especially don’t carry it around with you. Never put the passcode into your mobile phone because if your phone does get stolen, thieves may be able to get into your bank account.

However, depending on the services available to you, even if a thief does get into your account, the damage they can do may be minimal. If your mobile banking service is restricted to things such as viewing your balance and viewing a mini-statement, there is little harm that can be done here.

Wifi
Many mobile phones now come with wi-fi. Wi-fi allows users to connect to the internet through ‘hotspots’. There are normally plenty of hotspots in an around town and many are provided by coffee shops, pubs and railway stations.

This is probably the most risk and insecure of the three mobile banking options as mobile phones are open to the same risks that a computer user would be open to when using the hotspot, for example virus attacks and man-in-the-middle attacks.

At the moment, there are few viruses for phones however there is an increase in the number of attacks aimed at phones so users are advised to get anti-virus software for their phone if they are planning to use the phone’s Wi-fi capabilities.

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However some machines still require the use of the magnetic strip so chip and PIN is not 100 percent infallible, and all cash machines are still able to read the strip.

Other ways that chip and PIN may fail is because a bank has accidentally issued a duplicate identical debit card or a skimming device has swiped a debit card and captured the card’s details. One of the most sophisticated of these will make use of a pinhole camera to capture the PIN that a user enters, thus making it easy to clone the card.

Unfortunately victims of chip and PIN have found banks are often unwilling to return the money obtained fraudulently meaning many users have found their only option is for legal action to be taken.

Under the Banking Code, customers are only liable for losses arising from fraud if they acted ‘without reasonable care.’ Of course, this phrase is slightly ambiguous however it includes instances such as writing the PIN down or lending their debit card to a friend. However unless a bank can prove a customer has acted fraudulently or without reasonable care, the customer should only be liable for £50. Despite this, many banks refuse to pay out saying the customer must have been negligent with their PIN therefore they do not need to recompense the customer.

So what happens if you have been the victim of chip and PIN fraud and you don’t believe you have been negligent?

- Fill in a claim form at www.hmcourts-service.gov.uk
- Send the form to your local country court along with the relevant fee
- Consider asking a solicitor to look at your case and help you in court
- If the bank chooses to take the matter to court, ask the Citizen’s Advice Bureau for help preparing your case.

If you win your case, you will receive your court fees back and you will also be able to ask for some expenses. However if you lose you will not get the court fees back. You may also be asked to pay other costs however this is fairly unlikely.

Naturally, prevention is the best course of action.
- If you are expecting a new debit card and it doesn’t turn up or the PIN for a new card doesn’t turn up, tell your bank immediately
- Memorise your PIN and destroy the PIN letter
- Never write your PIN down or store it in your mobile phone/diary etc.
- Don’t use the same PIN for all your cards
- Never give anyone your PIN
- Always shield the keypad when entering your PIN in case anyone is looking over your shoulder or there is a camera trying to capture your PIN
- Check your bank statements as soon as they come in and if there are any transactions which you are unsure of, contact your bank as soon as possible.

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