YourCoffeeCorner.com | How To Spot A Scam

Credit-card cheques - Companiessend these out unsolicited to encourage you to spend on your cards.But they come with less protection and higher interests rates, so rip'em up.

Store cards - Most store cards come with extortionate rates of around 30% with the honourable exception of Mark & spencer at a typical 18,9% variable.

Credit cards - It's imposibble to comparethe rates of credit cards because they all tend to charge interest in different ways; Watch out for two different interests rates on one card. You pay off the cheapest debt first. Also look out for 0% transfer deals that have expensive admin charges attached.

Payment Protection Insurance (PPI) - Loan and credit- card companies boost their profits by selling pricy insurance policies that can be no use at all or are difficult to claim on. PPI on a £2000 credit-card debt could add up to more than £200 per year

Credit cards and banks - These often make it difficult to set up a Direct Debit to pay the full balance every month. And many have reduced the minimum payment to just 2%. It would take 14 years to pay off a £1,000 loan with a 9,9% interest rate at that level.

Identity theft insurance - If a company ever offers you identity theft insurance, don't bother with it - banks and buildings societes are liable for the costs anyway. Instead, invest in a good - quality paper shredder and think about getting some anti-fraud software for your computer.

Burst pipes protection - Your building insurance policy will cover you for damage to the pipes that lead from your house to the mains, but not for wear and tear. However, if you live right on the street , you definitely don't need this type of insurance, because the pipes are the water company's responsibility once they're off your property.