Now is the ideal time of year to clean up our personal finances.
Just one morning spent cleaning, scrubbing and polishing your personal finances could save you £000’s in a year – maybe enough to pay for your summer holiday!
Here at MoneyExpert we’ve put together a few ideas on where to begin:
Cleaning up your credit cards may feel like a chore but the savings you’ll make by avoiding paying interest on any existing balance could run into hundreds of pounds and take a significant amount off your monthly outgoings.
Transferring your credit card balance should be top of the list of your financial priorities if you’re coming to the end of an interest free deal. There are a number of great deals available, but be sure to check whether the transfer fee is capped, this way you’ll know whether you’re going to incur a big initial charge or not.
Forgetting to move your money could cost you big. With most credit card APRs starting from around 16% you could find yourself repaying as much as £480 a year just in interest on a £3,000 debt.
If you use your card regularly and pay it off, then look at a card with freebies, or cash back.
There are a whole range of rewards on offer from air miles, retailers ‘clubcard’ points, football cards, cash back and even cards that reward charities.
In these days of free banking you shouldn’t have to pay a charge for your current account unless of course you want to benefit from an account with plenty of perks.
But if you’re after somewhere to stash the cash and not much more then make sure you research the market carefully because many accounts pay interest on credit balances so check the details on your current account. If you are on a low interest rate then by moving your money to an interest paying current account, you could earn extra money for doing nothing!
Beware the small print, there may be a minimum amount that you have to put into your account each month, or the interest rates may be tied to a maximum balance.
There are also some excellent packaged accounts available, offering benefits from worldwide travel insurance to car breakdown services, but you need to make sure they’re suited to your needs. An account offering an AA breakdown service is useless if you don’t drive.
These packaged accounts will charge you a monthly fee and you need to carefully do the maths to see whether you would be better off with a free current account, shopping around for the best deals available on whatever benefits have been offered.
Take five minutes to write down all your debts and repayments for credit cards, store cards, and any personal loans.
It’s likely with these different forms of debt you are paying different rates of interest and at different times of the month. It can become very confusing and seem like you have no control over when you repay these debts and by how much.
Now, consider consolidating all these debts into a single loan with one repayment per month. As the interest rate is often less that on credit and store cards you could actually end up saving money. At least you will be cutting your outgoings each month, still repaying what you owe and giving you more cash each month.
Use MoneyExpert to compare the market for you to get you the lowest possible interest rate for your consolidation loan. This will mean lower interest repayments and will keep total you repay is as low as possible.
If your credit rating prevents you from getting an unsecured loan, then an option would be to secure your loan against your home. But don’t forget with a secured loan your home could be at risk if you don’t keep up the repayments.
You should look to pay your debts off as quickly as possible as the longer you borrow money for, the more interest you will pay.
Banks, building societies and financial service providers are becoming increasingly strict when it comes to choosing who they lend money to.
So there has never been a better time to polish up your credit rating.
Firstly you need to get a copy of your credit file, they only cost £2. These files contain information on all the credit agreements you have had over the past six years. All your cards, loans and mortgage will be listed along with your payment history, so any missed or late payments will be flagged as will more serious debt problems such as county court judgements or bankruptcy. If you spot any mistakes then contact them and get them corrected.
The banks are increasingly putting mortgage, loan and credit card applications under the microscope. So even one or two late payments could count against you, ensure you don’t miss a credit card payment or energy bill by setting up standing orders and check you banks statements regularly to make sure you haven’t missed any bills.
By closing down any old credit and store cards accounts you don’t use as this shows the banks that you are treating credit responsibly and it also stops you from being refused because the bank thinks you already have too much credit.
Don’t apply for too many loans and credit cards as each time you are leaving a footprint that a bank or building society has checked. Too many of these and the bank may think you are on a borrowing binge.
Finally, requesting a copy of your credit file can also help you guard against identity theft. You will be able to see if anyone has obtained, or attempted to obtain, credit in your name. If you see any requests for credit on your file which you know are not yours then contact your bank and credit card providers, as well as the credit agency. They should be able to remove any fraudulent applications from your record.
Interest rates are currently relatively high as many banks and building societies try to attract savers, to recover cash liquidity.
Organising your savings may mean transferring money to get the best deals, you can save £3,600 into a Cash ISA from 6th April 2008, which pays interest on which you are not charged tax. So if you have a couple of old saving accounts why not consolidate them into the best savings account.
If you have a reasonable amount of cash, which you can put away for 6 months or more, you may want to consider a fixed rate bond.
As with all financial products, check online at MoneyExpert for the best deals.
When was the last time you took a look at your mobile contract?
How many calls and texts do you actually send in a month? Looking at your most recent bills will highlight whether you need to change your current contract for a different tariff. Or, if you are not even using the full allowance on the lowest call tariff then you may be better off converting it to pay as you go.
If you are making the most of your current contract, have you looked to see if you could get a better deal, or newer handset? With our sister company SimplySwitch you can compare the latest handsets and deals available in the marketplace.
If you want to change your network and keep you existing number, then you should call your service provider and ask for a Porting Authorisation Code (PAC). The network will issue the PAC by phone or by post within 2 working days of your request.
As well as all the savings you can make on your financial products with MoneyExpert you can also save money on your shopping.
Check out the internet before you buy and you’ll often find you will save money. Shop at your favourite supermarket online and you only buy the things you want and are not tempted by anything else as you walk down the aisles. Even better they deliver it to your door, no heavy bags to carry!
There are a host of voucher sites, which will save you money, check out www.hotukdeals.co.uk or www.myvouchercodes.co.uk for the latest deals, money off, and discount vouchers available.