Credit card write-offs increase

One of the more interesting indicators in the economy at present is that there is no overwhelming problem with debt.

Or, to put it another way, we still live in an environment of low interest rates, and because of this, debt remains relatively affordable.

However, one area where debt remains a more acute problem is credit cards, not least because interest rates on cards, rather than falling with interest rates, have actually been going up.

It is therefore hardly surprising that defaults on credit cards are rising, while defaults on mortgages with low rates remains low.

However, the real danger that few are currently reporting on in the media is that interest rates must necessarily rise at some point. When this happens, as it inevitably will, then mortgage and loan payments will be subject to higher default rates.

In an economy subject to major cuts in public spending and difficult conditions in the private sector, the only assurance with rising interest rates is that money problems are going to become far worse for everyone.

While the government is keen to make property repossession a matter of last resort for lenders, the overwhelming economic pressures building up suggest the property market is due for a fall, as mortgages become less and less manageable, with the ugly feedback loop of negative equity coming into play as values do fall.

Setting up the office

It has been a while since I last posted due to the length of time required to set up the offices.

Finding suitable offices has proven to be a surprisingly difficult endeavour, with quite a number on the market, but few actually properly suitable because of their existing design, not least in older buildings.

However, it looks like we're finally moving A1 Brokers into office space at Beechwood.

There are still a couple of issues to address first before we're properly operational, though.

The first is that we still haven't cleared a full list of representatives to send our leads through. We are still waiting for Central Trust to address some technical support queries to allow us to sort leads automatically for personal loans on our A1 loans website.

We're also trying to get the business phone system sorted out so that we can automatically direct leads for different products to different phone lines automatically. There are plenty of phone systems available for office maintenance, but it requires bringing a number of third party providers together, not least BT and their inept support department.

However, it looks as though we'll be setting up our broadband through a dedicated provider instead, and use a leased line internet connection to ensure we have plenty of spare capacity bandwidth. While it's proving an expensive option, we need to ensure plenty of redundancy is built into the service due to much of it being sorted automatically either via the internet or the phone line, so it remains an essential trunk of the business.

Office furniture is not so much of a problem. Because of the financial crisis there is actually a lot of inventory available at present for second hand, and we've been able to pick up quite a bit of office equipment like this. However, all electronics are being bought new, not least the business computer system, as the last thing we'll need is any of the main computers crashing and taking down our data or other essential operations.

Staffing is not a problem, either, as I'm bringing on board local contacts and freelance agents I've been working with for some time.

So all in all, it looks as though the office is almost ready. The pieces of the jigsaw are all in place, it's just waiting now to bring them together.

ISA deadline looms early in 2010

It’s that time of year again - when the deadline for last year’s ISA’s allowance comes up and is gone forever.

To be part of this year’s allowance, the transaction will need to be completed by 6 April 2010.

However, due to the Easter Bank Holiday, savers and investors only have until Saturday 3 April to do this.

Therefore if you haven’t already put your ISA money away, you have only days to get the situation addressed.

According to CityWire, the following are the best ISA’s currently on the market:

Leeds Building Society ISA - five-year fixed rate paying 4.6%
Nationwide Building Society ISA - five year fixed paying 4.25%
Saga at 3.9%
Coventry Building Society - one-year fixed rate at 3.25%
Santander Flexible ISA - 3.2%
Barclays Golden ISA - 3.10%.
Cheltenham & Gloucester - two year fix at 3.5%
Post Office - one-year fixed-rate at 3%