Irish Financial Review

Pro-Russian separatists threaten us all!

Lets face it, the pro-Russian separatists in eastern Ukraine represent a threat to each and every one of us, even those of us living here in little old Ireland.

Ukraine crisis a threat to all Europeans

First off, there is little evidence that those leading the charge for greater autonomy in the industrial heartland of eastern Ukraine actually represent the views of a majority of the indigenous population there. In fact, evidence to date would suggest that some of the so-called ‘leaders’ are Moscowvites with a darker past merely seeking war.

News this evening of claims by pro-Russian separatists that they had ‘downed’ a Ukrainian military transport plane which turned out to be a civilian airline is a tragedy for all concerned, not least the victims and their families.

The Russian state has been repositioning itself since it lost the cold war. Attempts to ‘westrnise’ largely failed when significant amounts of wealth ended up in the hands of a few. So the powers that be embarked on a new course, choosing their ex-KGB man to lead the country and restore a sense of pride and maintain order.

Buoyed by surging energy prices, Russia has recently been on a mission to win back prestige, nothing wrong with that. Some nations do it through sports, others through industrial output and for Russia, it is beginning to appear through any means possible. Just this past weekend, Russia announced a reopening of a long abandoned Cuba ‘listening post’ to watch its old adversary, the US (perhaps someone should remind them that Edward Snowden, the ex-CIA computer programmer with all his US secrets is still exiled in Russia, so why the expense of Cuba…and the massive debt write-down when Russians can simply call home to Mr. Snowden).

But back to Ukraine.

When NATO warns of Russian influence in the growing conflict, the West needs to listen. Ukraine, at least the regions where separatists are most active is also the same area where significant amounts of Russian military equipment is manufactured. Crimea mattered to Russia because it was home to the Russian Black Sea fleet and eastern Ukraine matters because of the sensitive manufacturing base located there upon which Russia greatly depends. In many respects, the Russian concerns can be understood, but the means by which they go about sorting matters is a different matter entirely!

From an Irish perspective, events unfolding in eastern Ukraine matter. There are the democratic issues, who speaks for who is lost in this increasingly nasty proxy war. The massive loss of life this evening matters!

And energy matters. Ireland is at the end of a very long gas pipeline running all the way from Russia. Gazprom, the worlds largest natural gas supplier which is majority owned by the Russian state supplies this pipeline and in recent months, has been restricting the supply of gas to Ukraine, which both directly and indirectly impacts gas supplies to large parts of the EU, including Ireland. So, lets hope cooler heads prevail before the cooler weather settles in, or it could be a cooler winter for everyone!

5 effective ways to protect your online data

With online commerce set to explode in the coming years, more and more consumers are turning to online channels to both shop and pay for goods and services. But what consumers may not realise is that while a central appeal to online shopping can be the ready access to comparative pricing and instant ordering, the convenience of the web is a two way street.

Consumers must increase their knowledge of protecting their online data

Criminal hackers are a growing problem for e-commerce providers, particularly those with less than robust technology platforms designed to prevent against the most tech savvy hackers.
Even consumers who feel they exercise extreme caution when it comes to their privacy settings may still be vulnerable to a cyber if they allow third-party applications to access their profiles.
Once a user’s information such as location, date of birth and family connections has been logged, this can be used to hack into their other accounts, such as banking.
1. Check for the https://
Before entering payment details into any website, check the web address has an ‘s’ – which stands for secure – after the http. If it doesn’t, don’t use it.
2. Keep a close eye on your bank statements
Really savvy people cross check their receipts with the payment history on their statements, in fact, this is central focus of digital learning website,, which promotes financial literacy and budgeting among students and young adults. So, don’t go overboard but do keep an eye out for any unfamiliar transactions to recipients you’ve never heard of.
3. Use multiple passwords
This can be a bit of a labour of love if you have many accounts but having more than one password / login can really increase your privacy. It simply makes life so much more for criminals if they do manage to find a password / login setting that they won’t be able to do so easily across other accounts.
4. Check your social media privacy settings
Change all Facebook settings to “Friends Only” for all posts for a more secure profile. Facebook often makes changes to these settings and, when it does so, can even reset your secure settings. NOTE – this can also be a good protection against not getting that next job…increasingly, prospective employers use social media (debt collectors too) to look you up…and even track you down!
5. Exclude important personal information from your social media profiles
Remember that your private information is being broadcast to the world via social media and when it comes to criminals and hackers, the more information the better. Just remember that you may be making the life of the criminal hacker easier every time you publish details including your phone number, address, children’s age or school. This is where you need to use extreme caution, cull ‘friends’ you don’t know and really try minimise the information you broadcast about yourself.

Askaboutmoney hack data breach warning

The online personal finance forum, Askaboutmoney has admitted its website was hacked and has advised users to change their passwords.

The Irish based website ‘thinks’ its systems were breached around June 21 resulting in the unidentified hackers downloaded usernames and email addresses.

The website owners admitted that the hackers may have been able to access user details, including passwords.

The breach first came to light around the time of the hacking in June, and was fixed.

At that stage the administrators did not think personal information had been compromised. However, suspicions were aroused further on Monday after users of received spam emails to addresses which they had used to register for the service.




Spotting the best credit card deals

Credit card users will end up paying significantly more in interest charges when they use them for cash advances compared to using them for purchasing goods.

MoneyWhizz - Credit Card Comparison 2014

Cost Comparison for Credit Cards in Ireland

This is the latest finding of an analysis of credit cards conducted by, the financial literacy website.
Within the Irish market, consumers that sign up for so-called ‘sweetener’ deals at zero percent interest on balance transfers will be liable for interest charges of 20% or more when they use their cards for cash advances. This higher rate of interest is charged from the point of the cash advance, there is no grace period and payable until the bill is paid in full. Card users could have be paying two rates of interest, one for purchases and one for cash advances until the bill is fully paid off.
“Consumers need to look beyond the interest-free periods and factor in what their credit borrowings will really cost them, particularly now as the holiday season is about to begin” said Mr. Conway.
For this analysis, compared the leading credit cards on offer from Bank of Ireland, AIB, Permanent TSB, Tesco Bank, KBC and Ulster Bank.
It analysed the cost of repaying a balance of €1,000 using a minimum payment formula popular with most card issuers (3% of the outstanding balance).
Best deals
AIB’s ‘Click’ card (statements must be accessed online) offered one of the best deals in the market on purchases while the Tesco Bank Club Card offered one of the best deals on cash advances.
Expensive deals
Bank of Ireland and Ulster Bank were highly expensive on their ‘Student’ cards for cash advances with interest charges exceeding 21%.
Additional fees and charges
Cash advances also typically incur various other charges and fees which impact on the card’s overall cost of borrowing, measured as the cards annual percentage rate or APR.

Full analysis as follows:

Some important tips on reducing cash advance fees and charges:
As outlined above, one thing to keep in mind when considering a cash advance on a credit card is the higher cost of interest (and APR). Also, users generally will not have a grace period before interest starts accruing. They also typically have transaction fees so it is important to know what this will be before making any withdrawal. Users will have received a copy of the fees from their card issuer or can access the same information on the issuer website ( was able to access fees data on all issuers for this analysis).
• Transaction fee: You will pay a transaction fee for credit card cash advances
• APR: The APR for cash advances is often higher than for credit card purchases
• Interest-free period: Cash advances often begin accruing interest at the time of the withdrawal, meaning there’s no grace period
Some easy ways to limit the fees associated with a cash advance
• Limit transaction fees. Some transaction fees are a percentage of the overall advance; in that case, you could limit the fee by withdrawing only as much as you need. Other transaction fees may be a flat rate or a combination of a flat rate and percentage of the transaction. In this case, if you take all the cash you think you’ll need at once, instead of making multiple smaller transactions, you only pay the flat fee once.
• Plan your repayment. Remember, your repayment will be accruing interest until the amount is paid off. Always try to have a plan for how and when you’re going to pay back the advance.
How to avoid taking a cash advance
• Make purchases with your credit card. If you have the option, you can often limit interest and transaction fees by charging purchases to your card rather than getting a cash advance.
• Avoid unnecessary purchases. Ask yourself if the purchase you intend to make with your cash advance is worth the extra fees, or if it can wait.
• Check your balance. Don’t use a cash advance as a buffer just because you’re unsure how much money you have in your bank account.
• Create a budget. A budget will help you compare your income to your costs, so you know how much you can save to cover unexpected expenses in the future (to learn more on how to structure a personal budget, check out this free website:
• Build an emergency fund. Occasionally you’ll need to pay for things that aren’t in your monthly budget, such as car repairs. By building an emergency fund when things are going well, you may be able to avoid having to use credit card cash advances for these transactions.
Why do cash advances cost card users more?
In a nutshell, risk! Bank all over the world use what is called risk profiling to assess the patterns, behaviours and risk factors associated with card users. Those that have come to rely on their credit cards are determined as a high risk category of potential default, which is why card issuers charge more. So, for users, they just need to think about the financial consequences.
Frank Conway is the founder of, the financial literacy initiative developed for students, young adults and not-so-young adults.

Dressed to sell – how Oxendales and Littlewoods double as moneylenders to shift product

You see the TV ad, parties, fun, sizzle and razzmatazz. You deserve the look and with a few minutes online and clicks of a mouse, you can have the look. Simple! Fast and oh, so easy.

Shopping online can cost a lot more if you shop at certain brands

Some nline retailers are registered moneylenders

Sounds great, right?
Well if you accept the ads at face value, then yes, you can look great. But what about your wallet, how will it fare? Unfortunately, the picture here can be really uglier!
When you apply the Moneywhizz value checker, you’ll discover how much more you’ll pay for that new summer look than you bargained for.
Online retailers like Littlewoods (aka Shop Direct Limited) and Oxendale (aka Simply Be,Jacomo, The Brilliant Gift Shop) are ramping up their advertising campaigns of late and little wonder. With recession-hit Ireland still on the trawl for a bargain, online shopping has an appeal. For starters, it’s oh so easy! A few clicks of the mouse can be so much more appealing than the drudgery of a car ride or bus trip to your nearest mall.
Littlewoods Ireland even promotes free shipping (deliveries and returns), but with all things ‘free’ it’s the consumer, YOU who ends up paying, big time!
Here’s how it works.
If you use either the Littlewoods or Oxendale credit facility, using the Littlewoods own cost of credit estimate, you pay as follows:
As a representative example, if you are given a credit limit of €350, you then use your new Flexible Account to buy a single item for €200 and make the minimum payment each month of 10% (or €10 if greater); the total amount payable will be €251.06, spread over 21 payments. The total cost of credit will be €51.06” – Littlewoods website
So, the item didn’t cost what you expected but a full 25% more. Little wonder Littlewoods is not so ‘little’ when it comes to the cost of credit…this is moneylender stuff…but Littlewoods is a registered moneylender with the Irish Central Banks. Same goes for Oxendales; they’re also in the moneylender business…yep, fully registered and signed up as moneylenders with the Irish Central Bank.
In its credit terms, it notifies customers of the cost of credit:

Your initial credit limit under the agreement will be up to €300. Assuming that you avail of the maximum credit terms, the total amount repayable will be €355.80.” – Oxendales website

Cost of credit at Littlewoods is 43.7% (APR) while Oxendales 39.6% (APR). This IS expensive! Gets you wondering where the real money is being made…clothing or in the money lending game???

To put this into perspective, the most expensive credit cards in the Irish market cost between 18% and 21% so users of Littlewoods and Oxendales end up availing of significantly more expensive credit terms.

It’s also important to note that Oxendales apply credit charges to account balances ignoring any part payments so users get hit full whack. This gets the MoneyWhizz two thumbs down!

What about the convenience and free deliveries / returns.
Littlewoods promotes free deliveries and returns. However, this ‘free’ service is offered through select branded services only from several courier companies. This means that home delivery convenience takes a back seat if you want to avoid additional charges. Yep, bus it, drive it or walk it when you want to collect or return your parcel, is there anything really ‘free’ these days? If you don’t use these designated courier services and you want to return a parcel, this can cost anywhere from €4.50 to €11.50 per item…and much higher depending on the size and final destination!

Both online retailers do provide notice regarding those that may struggle with their repayments and provide contact details for MABS, the State funded personal budgeting advice service. Beginning to wonder if there is a message here???

The bottom line in all of this is how important it is for users to understand the true cost of goods. Finance services such as those offered by Littlewoods and Oxendales can look appealing and make affordability appear reasonable, but over time, the true cost of items purchased can cost a lot more, 25% more and even higher when delivery and returns costs are levied. And it is not just these two companies. Credit finance is big business and even where retailers promote zero percent finance on everyday household items including furniture and fittings, consumers must ensure they check potential money traps, including any fees and charges and even interest charges after those zero percent grace periods expire.

Remember, it’s up to you to be smart with your cash; it’s up to you to become a moneywhizz!

Frank Conway is the founder of, the financial literacy website developed for students and adults.

From ZIRP to NIRP – negative interest rates explained

From ZIRP (zero interest rate policy) to NIRP (negative interest rate policy), just what does negative interest rates really mean.

Mr. Draghi has been actively pushing interest rates lower

Mr. Draghi has been actively pushing interest rates lower

Today, the European Central Bank announced negative interest rates. Put simply, instead of paying banks for holding their cash, bank now pay it.

Big deal you might think, about time banks got hit in their pockets for all the damage they have done…and you would be right on the money. Unfortunately, what is bad for bankers is even worse for bank customers.

This new territory of negative interest rates has come about because the ECB wants to force banks to earn income elsewhere, such as using the traditional channels such as lending, where they charge a premium (a.k.a interest rates and fees) for their services. If they do, expect funds to start flowing.

Commercial banks (Bank of Ireland, AIB) maintain their reserves electronically at the European Central Bank. When economies are bubbling along, banks are paid interest by the ECB on their deposits held with the bank. Now, to put it simply, banks pay for the privilege of storing their money with the ECB.

Why would the E.C.B. do that? Inflation! Or lack of it! Sure, while the price of health insurance, transport and a host of other services across Ireland are increasing rapidly, believe it or not, inflation across the wider Euro area is near negative. This is a major, major problem as it means, in the long run that unemployment could shoot back up across the region. This is a move designed, in the long run to boost employment.

How will banks react to negative rates?
The surest bet is banks will cut deposit rates. They may also increase fees and charges…or introduce both! Over the course of the last few weeks, a number of banks have announced a cut in deposit interest rates (AIB, Permanent TSB, KBC).
Won’t savers just take their cash home and stash it under the bed? Good question but probably not. There are certainly some that may do so to avoid detection (or the perception) out of fear for medical card and pension entitlements (largely through misinformation) but studies show that savers are often motivated more by security than returns. Stashing cash at home, from a security perspective is a really bad idea!

Has negative interest rates been tried in the past? Yes, Denmark tried it imposing a -0.2 percent rate on bank deposits in 2012. There was no drastic effect one way or another — neither a remarkable boom in lending and economic activity, nor wholesale withdrawals of deposits from the Danish banking system.

Frank Conway is founder of, the financial literacy programme developed for students and adults.

Consumers last to benefit from ECB rate cut

With the European Central Bank widely expected to cut interest rates later this week, the question of how mortgage holders should use their ‘savings’ arises. For many, the joy of savings will be short-lived, or not realised at all, here is why:

ECB rate cut decision

1. Government is grabbing all it can. Despite interest rates falling to a record low, savings on mortgage repayments have been eaten up elsewhere. Higher taxes and lower tax exempt thresholds are devouring money that would otherwise be entering the wider economy. Taxes and charges have acted like a space-time ‘black hole’, devouring the best intentions of ‘Super’ Mario!

2. Rate cuts will not be passed along. With approximately 200,000 standard variable rate (SVR) mortgage holders across Ireland, lenders are not obliged to pass on ECB rate reductions. In the past, the majority of banks pocketed rate cuts at one point or another. With most banks now fighting to pass upcoming ECB stress tests, there is little reason to believe they can afford to change their ways.

3. Savers no longer welcome. Talk about punishment for being good! In the latest Government budget, tax on earned interest was raised to a massive 41% which means that almost half of any income earned on interest is taken by Government. For those who have the cash, a primary motivtion has been to protect it…and for the rest of the population, they can only wish.

Should mortgage holders overpay? No! The only group of people that are guaranteed lower repayments are those with tracker mortgages. Despite some calls for tracker mortgage holders to now ‘overpay’ their loans, this is not the best use of their money. Instead, they should set up and build an emergency fund with the savings on their mortgage repayments as an alternative to using more expensive forms of finance such as credit cards, credit union, personal loans and even money lenders.

Frank Conway is the founder of, the financial literacy website for students and adults.


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