Archive: MoneySavingExpert's Money Tips Email

Don't worry, this isn't a saucy article - no fnarr fnarrs needed (shame). This is about quirks in the financial system you can exploit to make money or improve your finances.

The idea for this blossomed from the Loans Loophole - when borrowing MORE means you pay LESS that I put in this email a couple of weeks ago. It was popular, so I challenged myself to come up with 10 more. Let's quirk...

1. When paying just 1p on a credit card can be worth £10,000s. Many people know that paying on a credit card is the ultimate financial self-defence weapon, as the Section 75 law means card providers are jointly liable for purchases over £100 (ie, a min £100.01), up to £30,000. So if things go wrong you can ask the card firm to sort it.
   
   Yet what few know is even if you just pay for 1p of the purchase on the credit card, the card firm is still responsible for the WHOLE amount.
   
   So buy a £22,000 fitted kitchen and pay a bit on the card and you're covered. That may sound far-fetched, but having heard me talk about it, it's exactly what rescued MoneySaver Linda in 2014 when her kitchen fitters went bust. As she'd paid £200 on a credit card, this meant - with a bit of a fight - she got her money back. The rule still stands.
   
   And don't think Section 75 is only for when firms go bust. If something is faulty, you can go to the card firm instead of the retailer (really useful if the shop was overseas). Our Section 75 guide takes you through how it works, and how to claim. Of course aim to pay the card off IN FULL each month, so there's no interest.

2. How an extra £100 can get you accepted for a mortgage. What's well known is that mortgages typically get cheaper at 90%, 80%, 75% and 60% loan-to-value (or to put it another way, 10%, 20%, 25% and 40% deposits), so obviously if you're nearing a border, it's worth pushing to it to reduce the rate. See Boost your Mortgage Chances for help on this and more.
   
   Yet what fewer know is if you push £100ish further beyond that, it can increase your chances of acceptance, as it no longer looks to mortgage underwriters like you're scraping to get to the limit.
   
   In fact, the geekiest mortgage geek of them all (a big compliment from me) Ray Boulger of John Charcol tells us even a fiver more can make a difference, especially for higher loan-to-values and with bigger lenders who process via algorithms when credit scores are touch and go. As it can never harm, you may as well try.

3. How two people can have a financial threesome to make £340. I made you wait a little for the threesome, but I suspect that's usually no bad thing. This is all about the fact that with bank accounts, two people can be three financial entities. Each can have their own account, and then there's a joint account, as many have for bills.
   
   That means you're able to get three switch bonuses between the two of you. And right now there's a good combination for it...
   
   - First Direct gives switchers £100 and has top service. First Direct* has a 91% 'great' rating and gives newbies a free £100, access to a linked 1% saver and often a 0% £250 overdraft. To get this, you just need to pay in £1,000 once within 3mths.
   
   - Virgin Money gives switchers £140 wine + £50 to charity. New Virgin Money switchers get 12 bottles of wine 'worth £138' (pls be Drinkaware), plus £50 to your choice of charity. To get this, you need to put £1,000 in the linked 0.35% savings account until you're sent the wine code.
   
   - Santander 123 gives up to 3% back on bills. For a £2/mth fee, Santander 123 Lite* pays cashback on bills you pay from it via direct debit, eg, 1% on council tax, 2% on energy and 3% on water. Those with mid-to-large household bills should make £40-£80/yr after the fee. You do have to have £500+/mth going into it though.
   
   The choice is yours, but I'd hedge for First Direct for your personal accounts (you can't do it for all three, as you will only be a newbie once) and one of the other two for the joint one. Full T&Cs and options are in our Best Bank Accounts guide.
   
   Don't have a joint account? You can set up a Santander 123 without switching. As the bonuses elsewhere are for switching though, to get them you'd first need to set up an account at a different bank, then once it's up and running move it across.

   A warning about joint FINANCES Some of these quirks involve couples getting joint accounts or being added as a 2nd credit card-holder. Please only do that if you are in a financially-trusting, caring, non-abusive relationship. Don't ever feel pressured by a partner into getting a joint account, it can sadly be a precursor to financial abuse - a form of domestic violence. For help and info, see my Financial abuse & joint accounts blog.

   
   

4. How £1ish insurance can get you a YEAR's 2for1 at cinemas and 1,000s of restaurants. This is all about manipulating Compare The Market's Meerkat Meals and Meerkat Movies promo. You need to buy a qualifying product, and the cheapest one of those is a one-day single-trip UK travel insurance policy, costing a quid or two. So even if you don't need it, you can get it to qualify. Simples. See full Meerkat trick info.

5. When increasing pension contributions can boost child benefit. If you or your partner earn £50,000+ a year, this starts to reduce your child benefit entitlement (in practice it's usually still paid, but tax is increased accordingly), and by £60,000 you don't get anything.
   
   Yet this is based on your 'adjusted income' - which usually deducts pension contributions, so increasing them can increase your child benefit entitlement.
   
   For example, someone earning £51,000 with two children who increases their pension saving by a grand (which, of course, is still your money - just for use later) would see their child benefit entitlement upped by £182/yr. See high-earner child benefit charges for full info.
   
   Similarly, for those who make pension contributions from gross pay, increasing them to bring your salary below the 40% tax rate threshold could make you eligible for the marriage tax allowance and a bigger personal savings allowances, though a lower disposable income can impact mortgage and other applications.

6. How opening a bank account, even if not needed, can get £500 of mobile phone, travel & breakdown cover for £150. Packaged bank accounts charge you a monthly fee, but in return they include high-level insurance packages. For many these aren't good value, as you could just buy the insurance cheaper direct (in fact, many can reclaim packaged bank fees).
   
   Yet for couples, and more so families, especially with expensive mobiles, these can be a blockbuster, as the insurance benefits dwarf the monthly fee. Most don't even require you to switch to them to get it, nor have a min monthly pay-in, so you can just open it for the insurance, though that may feel more hassle than just moving your banking there.
   
   Full help and options are in Packaged Bank Accounts, but let me highlight the top pick for many, Nationwide FlexPlus*. With it you pay £13/mth (so £156/yr) and it gives you...
   
   - Worldwide family travel insurance (oldest age 69).
   - Family smartphone insurance (covers you, your partner and kids under 19, or under 22 and in full-time education, provided they live with you). This is the big one, as many pay well over £100/yr per person.
   - UK and European breakdown cover for the account holders.
   
   So add up what you pay for those products now, and if it's more than £156/yr it'd be cheaper to get this bank account.

7. Why bizarrely the best way to (re)build a good credit history is to get a credit card. Would you lend money to someone who'd failed to repay in the past, or you knew nothing about? No? Well, nor will most lenders. That's why if you're always rejected because you've never had credit, or had problems, you need to let them get to know you and show you can be trusted. 
   
   The easy way to do this is to get a credit card, do £50-£100 a month of normal spending on it (not an excuse to spend more) and always repay on time. Provided there are no other issues, this should start to improve your creditworthiness within a year.
   
   The catch-22 is getting a credit card is hard with a poor credit history. So use our (Re)build Credit Card Finder, which shows which specialist poor-credit cards you're most likely to be accepted for. They have hideous interest rates, but as long as you repay IN FULL each month, never withdraw cash or breach the credit limit, then you won't pay interest, so it's free. More info and help in 37 tips to boost creditworthiness.
   
   

8. Why some savers earning around £50,000 may be better off earning LESS interest. This one's a weird glitch, which means some savers may be better off going for lower interest rates. It's complex and only affects a few people, but if you may be one, have a read of this 2016 blog I wrote on why lower interest may earn you more.

9. When the cheapest way to get a loan may be via a credit card. There's nowt cheaper than interest-free, and there are 0% credit cards but not 0% loans. So the obvious question is... can you turn a credit card into a loan?
   
   The answer is yes. Though it's best for borrowing under £3,000, as above that credit limits get tricky. There are two routes for this:
   
   - Is the loan for something you can pay for by card? Use our 0% Purchases Card Finder to see which the best card you're likely to be accepted for is. Up to 21mths 0% is possible. Then just use the card to pay.
   
   - Do you need cash or can't pay on the card? Use our 0% Money Transfers Card Finder to see which the best card you're likely to be accepted for is. Up to 18mths 0% is available.
   
   These are specialist cards, where you pay a one-off fee of 3-4%, and the card pays money into your bank account, so you owe it at 0% instead. Once the money is in your account, use it like you would've done with a loan. Step-by-step help is in 0% Money Transfers.
   
   - Important tips for doing this safely. As with any loan, it should be for a one-off, needed, planned, budgeted-for purchase. If not, don't do it. And only use it for that, nothing else (put it in a bowl of water in your freezer to ensure you don't use it).
   
   One disadvantage of cards compared to loans is the payments aren't fixed, which is bad for financial discipline. So set up a direct debit to repay a fixed monthly amount that will clear the debt within the 0% period. If you don't think you can stick to this, then even though it's costlier, it's safer to go for a traditional cheap loan.

10. How a couple may be able to get 5% cashback on all spending for SIX months. Cashback credit cards pay you for spending on them. The big payer is the Amex Platinum Everyday* card (best to use our eligibility checker first), which gives 5% cashback up to £100 for the first 3mths, and up to 1% after. Yet there's a route for a couple to get it for 6mths...
    
    - Step 1: Apply and add your partner as a 2nd cardholder (it's not a joint account, they just spend on your account). Both use it for all normal spending, to max out the 5% within the 3mths.
    - Step 2: As the 5% ends, your partner applies for the same card, and you become their 2nd cardholder to bag another 3mths at 5%.
    - Step 3: Return to your own cards to ensure you hit the £3,000 annual min spend to get the cashback. After that, just use one card, as it pushes you up the tiers you get cashback on.
    
    Of course, ensure you set up a direct debit to repay IN FULL each month to avoid the 22.2% rep APR interest, which would wipe the gain. Full help & options in Credit Card Rewards (APR Examples).