Annual fees on credit cards will be the norm by the end of the decade, says Defaqto.

Last year’s decision by the Office of Fair Trading to limit credit card providers’ penalty fees to £12 has prompted many to raise their interest rates – and look for other ways to recoup the lost profits.

The financial research company says Barclaycard is considering introducing an annual fee of up to £20 for customers who don’t use their card regularly, and it reckons many others will follow suit.

As a result, it predicts more people will turn to debit cards instead.

Sadly, the users who ditch their credit cards will be the ones for whom they don’t cause a problem.

If only those who waste millions of pounds a year in interest on card debts would give up as well and turn to debit cards.

At least then, limited by the bounds of their overdrafts, they couldn’t spend so much money they don’t have.

In the meantime, it might be worth switching to a card that charges a lower rate of interest.

A quarter of housebuyers are keen to avoid mortgaging to the max, and about the same proportion are prepared to cut back on other spending to afford their home.

To the Yorkshire Bank, the author of this research, this means that “housebuyers across the country are increasingly taking prudent steps to reduce the risk of mortgaging to their financial limits, as the possibility of the fifth interest rate rise in under a year looms large”.

Excuse me?

What about the three-quarters who are willing to mortgage to the max or refusing to cut back on other expenditure?

If, as expected, the Bank of England raises rates again next week, they could soon be regretting their financial pig-headedness.

According to the Yorkshire, more than three-quarters of first-time buyers anticipate further rate rises over the next 12 months.

Yet, only a third plan to avoid stretching their finances for fear of how these could affect them.

What about the rest? Are they insane?

In this overheated property market, it’s completely unrealistic to expect to buy with a huge mortgage and not have to cut back on other things.

Anyone who thinks that way is sleepwalking towards financial meltdown.

I received the following email and thought it might be of interest to others…

‘I’m aged 63 and need to downsize. I have a substantial deposit but will need a mortgage of some level, but am unsure of the type of mortgage that would be suitable or the duration.’

Provided you can convince a lender that you can afford the repayments, you should have no trouble getting a mortgage even though you’re over 60.

If they’re dubious about your ability on this score, as long as you’re confident that you can do it, offering a relative or close friend to act as your guarantor is likely to placate them.

There are about 40 lenders who will take on borrowers of your age and a couple will even consider the over 80s.

So, in theory, you could get a loan with a 20-year term, but because so few would accept you, your choice would be severely limited.

To give yourself a reasonable range of lenders and deals to choose from, you’d be better to go for the minimum term you can possibly afford.

If you could manage to repay your loan over, say, 10 years, you would be able to decide between about 20 lenders, including some of the biggest names.

But, for goodness sake, don’t simply head for your own bank - they can only advise you on their own products.

The only person who can go through all the options with you, and help you make the best possible choice for your needs, is an independent financial adviser who specialises in mortgages.

As for the type of mortgage, the choices are the same for a borrower of any age. It’s up to you to decide whether you would prefer a discounted or a fixed-rate deal, whether you want to go interest-only and so on.

Finally, a financial initiative deserving of praise (although probably not by the retailers whose profits will suffer as a result).

If you want to save money at some of your favourite shops, there’s actually a website that lists all the latest online discount and promotional codes.

So whether you’re heading for Amazon, B&Q, John Lewis, White Stuff or any one of dozens of others, it might be worth stopping off here first.

Yet more junk mail - this time a sheet of credit card cheques ready printed with my name from MBNA.

The credit card companies want us to believe they’re a pain-free way to have all the things we want but can’t afford.

In fact, many providers charge the same astronomical interest rates for cheques that they apply to cash withdrawals (often between 20 and 30 per cent) - and allow no interest-free period, so their profits start clocking up right away.

Mine always end up in the same place: the shredder.

It’s all they’re fit for.

Halifax/Bank of Scotland has just made my mother-in-law the (it would like to think) generous offer of what it calls ‘overdraft repayments (sic) cover’.

I’m still struggling to comprehend this latest bit of financial junk mail.

Will the banks ever run out of new ways to try to part us from our cash? It would be impressive if it wasn’t so horrifying.

Why on earth are they targeting an 84-year-old woman who has never been overdrawn in her life with this kind of overpriced, useless insurance that amounts to little more than scaremongering?

The less-than-detailed ‘eligibility details’ in tiny print on the front of the form, which they have so conveniently filled in on her behalf, state that you must be in paid work and making National Insurance contributions.

Well, as I said, she’s 84 - as the bank’s own records should clearly show. Does she sound eligible to you?

And to clear up any further doubt, the policy summary over the page states that you must be under 65. You do the maths.

Although of perfectly sound mind, she is easily confused by financial matters - as, again, the bank’s records giving me power of attorney will confirm - and would more than likely have signed and returned the form if I hadn’t intercepted it.

For £93.60 a year (assuming the bank�s insurance division had still failed to notice that she wasn’t eligible) she would have been covered in case she became unable to repay her non-existent overdraft.

No doubt they would have suddenly noticed she wasn’t eligible if she tried to make a claim.

When I phoned the HBOS insurance helpline number to point all this out, the explanation I received left me even more alarmed.

The reason they’d sent this mailing to my elderly mother-in-law? According to their records, she’s only 43. And why would that be? Because they’ve got her down as having my date of birth rather than her own.

The woman I spoke to admitted: ‘That’s obviously a big error on our behalf.’

She’s not wrong and I’ll be writing to complain - I’ll keep you posted about the response.

Secured loan provider Picture Financial says a quarter of the UK population reckon getting their finances properly organised is more important to their happiness than sex, food, work or the weather.

But they won’t be feeling so happy if they decide to make a Picture loan a part of that process.

Its typical annual interest rate is 8.4 per cent, but borrowers may be asked to pay as much as 10.9 per cent, depending on their credit history - at a time when best-buy unsecured personal loan providers are charging only around 6 per cent.

That may not sound like a huge difference, but with a minimum Picture loan of £10,000 and a minimum repayment term of 10 years, that’s a very expensive commitment.

At a rate of 10.9 per cent, it would cost a total of £16,461.

Borrowing the same amount over just five years at a rate of 6 per cent would cut that to £11,599 - a difference of almost £5,000.

To add insult to financial injury, Picture takes a charge over borrowers- homes, which means it can force a sale if they fall behind with their repayments.

So if you need to borrow to get your finances organised, for goodness sake shop around for a better loan deal than this.

Four out of five people overspend. That’s the depressing news from credit reference agency Experian.

Lack of financial control combined with a run of interest rate rises means millions are struggling to keep their heads above water.

Around one in five Britons admit they have trouble controlling their spending and say they find financial matters hard to understand.

At least the admit they’ve got a problem.

Presumably, the other three out of five think they�re doing fine, or if they’re not, that it’s all someone else’s fault. But they’re wrong.

Your finances are your responsibility.

If you don’t understand enough about how the personal finance world works to control them properly, you need to learn - and fast.

It’s not as if it’s difficult to track down reliable information.

Independent websites such as the Citizens� Advice Bureau’s Advice Guide, the Financial Services Authority’s Money Made Clear and MoneySorter are packed with straightforward, easy-to-follow explanations and tips.

So start reading today.

My previous post about tax on children�s savings led to another question - about avoiding it!

The mum in question asks: ‘What would be the position if a parent invested money for a child and kept it in an offshore account’ If the interest was in excess of £100, would this only be taxed when it was brought back onshore? (This could be some years later).�

This is a bit of a complicated one, but in a nutshell�

Most offshore accounts pay out yearly and this is taxed as if it is part of the holder’s income. (So it’s taxed at your income tax rate, not the 20 per cent savings rate.)

However, if you choose a deferred interest or ‘roll-up’ fund, it isn’t taxable until the year you cash it in.

Either way, the holder has to pay the tax eventually.

And that is likely to be you. Offshore accounts are almost exclusively open only to adults. A rare exception is Bradford & Bingley International’s YoungSave.

Click here to learn more about saving offshore.

Another email which might be of interest to anyone lost in the complexities of a mortgage application…

My correspondent asks: ‘I have been sent the contract for my records, does this mean we are nearly there or is it just one of the steps’�

Unfortunately, the answer is a rather unhelpful: it depends on exactly what you’ve been sent.

If your application has been going on for a few weeks, it may be your final offer, which means you’re all set to go.

But if you’re still in the early stages, it could just be an initial quote or cost summary.

The only way to know for sure is to read it carefully, and if you’re still unsure, check with your adviser or mortgage provider.

Read on for more information to help you understand the home buying and mortgage process.