Consumer watchdog Which? has released a list of the 10 financial products that waste consumers' the most money.
The 10 financial products that offer poor value for money, cost more than they save, or turn out to be useless when you come to claim:
- 1. Extended warranties. These are sold with electronics products to offer 'peace of mind' - but only 2% of TVs need repairing in their first five years, and customers are often misled about what damage they actually cover
- 2. Charity credit cards. These let you give as you spend with no extra cost, but they are not the most efficient way to donate. Most people would be better off getting the best cash-back credit card and donating the extra each month
- 3. Gift cards or vouchers. Not a bad gift if the value is small, but administrators of bankrupt companies have no obligation to accept them
- 4. Healthcare cash plans. These let you reclaim a percentage of the cost of everyday medical treatments such as dental check-ups and eye tests. But unless you are a very heavy user, you will end up paying more in premiums than you receive in benefits
- 5. ID fraud protection policies. These claim to cover fraudulent transactions made on your bank account. But banks cover their users for losses due to fraud unless they can prove you have acted with gross negligence
- 6. Expensive tracker funds. Tracker funds let you invest across a group of companies and follow their fortunes, but some charge two or three times the going rate to manage your money - which might eat into your returns
- 7. Structured deposits. These are sold as low-risk investments, but are almost always beaten by best rate fixed-rate bonds. In 2012 they were often sold without proper advice on returns and charges
- 8. Over-50s insurance plans. These pay out a lump sum at death, but in most cases they pay out less than you could have saved in an Isa over the same period
- 9. Paid-for debt management. These help you manage your debts and establish plans to pay the money back. But charities such as StepChange do the same thing for free. In October, the Office of Fair Trading revoked the licences of three debt management companies for poor transparency and misleading information
- 10. Card protection. These claim to cover stolen cards or stolen car keys. But their services are available already, either from your bank as part of the service or from insurers at cheaper prices (eg car key insurance as part of car insurance).