Archive: MoneySavingExpert's Money Tips Email

Urgent. FREE £125 to switch bank ending
Martin: 'If you want to be paid for your custom, stop bitching, start switching'

The biggest bank switching bribe around is about to end. So if your bank isn't bending over backwards and giving you fiscal foot-tickles on request, why not check if you can at least get paid for your custom, and at best, get an improved deal too?

And I'll shout that even louder to the nearly 20% of people who rate their bank as 'poor' - it's time to stop bitching and start switching. To help, let me break it down for you...

Some banks want your custom so much, they'll (legally) bribe new customers to switch to them. To get the reward you'll need to pass a not-too-harsh credit check, and use their official switching service, which...

- Switches you in 7 working days
- Moves all standing orders and direct debits for you
- Closes your old account and auto-forwards payments to the new one

1. Ends Mon. FREE £125 - biggest cash bribe. Newbies switching to the HSBC Advance* account get £125 plus access to a linked 1% regular saver where they can put up to £250/month in. But it doesn't fare brilliantly in our customer service poll.
   
   - How to get it: You must have at least 2 direct debits or standing orders to move across, and meet the £1,750 min monthly pay-in (its way of saying you need £25,600+/year salary going in).
   
   To count as a newbie you can't have had an HSBC bank account since Jan 2018. Or, if you are/were a customer of its sister bank First Direct, that account must have been opened before Jan 2018.
   
   
2. FREE £100, top service, 0% overdraft - best all-rounder. Slightly less cash here, but First Direct* has a far higher customer service rating - 85% 'great' in our poll that closed yesterday. And while that's lower than it's scored before (more info and results below) it's still the top non app-based bank.
   
   Like HSBC it also gives access to a linked 1% regular saver where you can put up to £300/mth in, plus many also get an ongoing £250 0% overdraft.
   
   - How to get it: Switch and pay in £1,000 within 3mths of opening the account - you can withdraw it the next day if you choose. To count as a newbie you can't have ever had a First Direct account before, or if you are/were a customer of its sister bank HSBC, that account must have been opened before Jan 2018.
   
   
3. Free £150 experience-days, 2% interest on up to £1,000, top card for spending overseas. Virgin Money* has a different approach that may appeal. It gives a £150 Virgin Experience Days gift card, which you can redeem on activities such as hot-air balloon rides, driving days and sushi classes.
   
   It also pays 2.02% AER variable interest on up to £1,000, and for those who like to go abroad, it has a top-pick debit card for overseas use. Like HSBC though, Virgin doesn't fare brilliantly in our customer service poll.
   
   - How to get it: Apply online, then switch with at least 2 direct debits to move across, register for its app and keep £1,000 in its linked 0.35% savings account until you get the gift card email (which usually takes less than a fortnight). To count as a newbie you can't currently be a Virgin, Clydesdale or Yorkshire Bank current account customer or have had a Virgin current account switch reward before.

Many ask if switching bank hurts their creditworthiness. In the short term it can be mildly negative, but unless you've a major upcoming application, such as a new mortgage, I wouldn't be unduly put off. Detailed info on all accounts, including eligibility, in Best Bank Accounts.

PS: If you don't have a bank account and struggle to get one, don't feel forced to pay for a prepaid account - see my help to get a bank account info from the weekly email a fortnight ago.

Twice a year we poll MoneySavers to check how their banks have treated them recently - 'great', 'OK' or 'poor'. Our summer poll closed yesterday. It's always surprising how well banks do generally compared with other sectors - here are the results, with links to banks that feature in our top picks...

Since the last poll, First Direct has lost a little ground on Monzo and Starling. This echoes the bank's own apology that its call waiting times have increased, due to misjudged demand as lockdowns lifted.

Its Trustpilot rating has plummeted far further - likely as those who have had problems have probably seen that as a destination to vent - while most customers in our poll still really rate it. One to keep an eye on.

Not every bank requires you to use its switching service to get its benefits. This means that while you can switch, you can also choose to open it but keep your main account, and use the new one as a 2nd (or 3rd or 4th) account for a specific purpose, and that may be worth it.

• APPy clappy banking. Many people's prime banking interaction is via an app. While some big banks such as Barclays and Lloyds have decently rated apps, there are two star app-based players.
  
  Starling Bank* was rated 97% 'great' in our customer service poll. It gives real-time notifications when you use your debit card (which is top for spending abroad), insights into spending, lets you set savings goals, and pays a tiny amount of in-credit interest. Runner-up is Monzo's 92% 'great', with similar features, though slightly stronger savings options. More in Digital Banking.
  
  
• Get PAID TO PAY BILLS - great for joint accounts. Santander 123 Lite* pays cashback on bills you pay from it via direct debit, incl 1% on council tax, 2% on energy and 3% on water. Perfect for joint bills accounts, which I know many couples have.
  
  There's a £2/mth fee but those with mid-to-large household bills should still make a profit of about £40-£80/yr. To get it, you need to meet the £500 min monthly pay-in, so just put that or more in to cover your bills - you can always withdraw any excess.
  
  
• Get £500+ mobile, breakdown & travel insurance for £156/yr - great for families. Packaged bank accounts are those where you pay a monthly fee, and lots of insurance products are thrown in.
  
  I call them the Marmite of banking. Make an active choice and they are a great way to get £100s of needed insurance for a fraction of the usual cost. Yet many were upsold or mis-sold unsuitable policies - if so, you may be able to reclaim £1,000s.
  
  For those who need insurance, Nationwide FlexPlus* at £13/mth (£156/yr) is the top pick. Its most powerful cover is for all the family's mobiles - which many separately spend £100/yr on each - plus worldwide family travel insurance up to your 70th birthday, and UK and Europe breakdown cover for all account holders.
  
  Alternatively, there's the Halifax Ultimate Reward account. While Halifax has a higher £17/mth fee, it currently pays switchers £100 to join - factor that in and it's just £104 in the first year. The insurance is similar to Nationwide's but the breakdown cover is UK only and mobile cover is only for the account holder(s) - so it's best for couples getting a joint account. More options in Best Packaged Bank Accounts.

Credit cards are always seen as the bad guys, yet debit cards are debt cards too if you're overdrawn. And a regulation change a little over a year ago means overdraft interest rates have exploded to a typical 40%, DOUBLE the rate of a high street credit card.

So actually for most the priority is to use spare cash to clear the overdraft first, and just pay the minimum on credit cards. There are some options - more info in Top Overdraft Accounts - though as always you will need to pass a not-too-harsh credit check.

• Owe less than £350? Get paid to switch to a 0% overdraft. First Direct* offers new switchers a £100, and many get a £250 0% overdraft. So if your overdraft's up to £350, the £100 pays some off and the rest is at 0%. Above that you'll pay the 40%, like elsewhere. Full info: First Direct.
  
  
• A year's potentially bigger 0% overdraft. Nationwide FlexDirect* can offer a far bigger 0% overdraft, though the limit depends on your credit history. However, it's only 0% for a year - then it's the standard 40% like most providers. So plan to clear the debt within that time. Full info: Nationwide.
  
  
• Do a 0% money transfer. These are specialist credit cards you can use to clear your overdraft. Quite simply, you apply, then ask it to pay money into your bank account, so you owe it instead at 0% for up to 18mths. You need to be careful though. Our Money Transfers guide will take you through it, including top deals.
  

It's not just about making it cheaper though - I've some quick overdraft tips that can help, and far more in 10 tips to cut your overdraft...

- Aim to repay a fixed monthly amount. Eg, if you're £500 overdrawn, 'paying' £100 means aiming to be £400 overdrawn. A budget will help.
- Consider moving direct debits to just before payday. The idea is you're overdrawn for less time, so costs are lower.
- Got savings? Use 'em to clear it. See Repay debt with savings?
- Can you reclaim past bank charges? See bank charge reclaiming.
- Struggling with all debt? Get free help from Citizens Advice, National Debtline or StepChange. It can make a huge difference. 

PS: And it's a goodbye from me... Starting some time next week, I'm taking a summer sabbatical, to put on my 'daddy' hat, and recharge my batteries, in prep for a big run of my TV show from Sept and lots more MoneySaving at MSE. That means for the next few weeks, this email will be in the hands of MSE's Editor-in-Chief Marcus, and the rest of the very talented MSE team. Ta ta.