| | | Martin's Weekly Briefing: For more tips, alerts & puns, follow Martin on Twitter If you ever even dip into your overdraft, act now - you could save £100s
The competition watchdog's set out plans to cap fees for busting your overdraft limit. This should help, but don't wait. Overdrafts are a debt like any other - the key is to cut the rate, repay faster and avoid any penalties. Most people's overdrafts aren't huge. My snap Twitter poll yesterday found 46% are under £250. Yet even then fees can be horrid - with some accounts a constant £200 overdraft would cost you £365/yr. So even if you only dip in, it's worth sorting. | 1. | Get PAID £100 to get a 0% overdraft. Best for overdrafts under c. £500. First Direct* has won every customer service poll we've ever done, 89% of its overdrawn customers rate it 'great'. It offers accepted new switchers £100 (paid within around 28 days) - that'll clear some overdraft to start with.
It also gives a standard £250 interest-free overdraft (above £250, but within your limit, it's 15.9% EAR, still relatively cheap). It's a clear winner for those with overdrafts that never go over £350, and still likely best even if you owe a little more but intend to clear it.
Do you qualify? You need to pay in at least £1,000/mth (equiv to £13,100 salary) to get the bonus and ensure there's no fee. Like all banks, First Direct does a credit check when you apply. Full info & eligibility in First Direct review. | | | | | 2. | Just dip into your overdraft? You could get a free £150. If at the end of the month you occasionally slip into overdraft, then the Co-op Bank* (70% rate it 'great') is a decent alternative. Don’t spend the £150 switching bonus, let it act as an extra buffer. If that's enough to prevent you going overdrawn again, winner - especially as you can also get up to £5.50/mth on its Everyday Rewards scheme (you need to fulfil some criteria). If not, its authorised overdraft is 18.9% EAR, so be careful.
Do you qualify? You'll need to pass its credit check, then pay in at least £800/mth (equiv to £9,850 salary) and switch at least four direct debits to get the £150 bonus. Full info & eligibility in Co-op review. | | | | | 3. | Bigger overdraft? 12 months 0%. New customers with Nationwide's FlexDirect* (77% rate it 'great') get a year's fee-free overdraft. There's no set limit - it depends on credit score - but it can be decent.
As these two tweets I got on it show: @mattboliver: "Matched my old one - £1,200. Implied I could have asked for more but the point was I wanted to pay off" and @bigbossblues: "I received £2,100, saving me £36 a month on my Lloyds overdraft for 12mths" - so that's £430 saved.
After a year it's 50p/day - still less than other accounts charging daily fees - even so, use that time to budget to clear the overdraft debt. Nationwide doesn't require a min pay-in for its 0% overdraft, but you need pay in £1,000/mth if you want its 5% in-credit interest (equiv to £13,100 salary). Full info & eligibility in Nationwide review. | | | | | 4. | You can SHIFT overdrafts to special 32mth 0% credit cards too. A few specialist money-transfer cards let you pay cash in to your bank, to pay off your overdraft, then you owe them instead. This is useful for big overdrafts.
My top pick is Virgin Money (eligibility calc / apply*) which gives accepted customers 32mths 0% for a one-off 1.69% fee (min £3) of the amount shifted. Need longer? Tesco (apply*) is 40mths 0%, but with a higher 3.94% fee.
Follow the Money Transfer Golden Rules:
a) These are special cards - most don't allow this, so be careful. Get step-by-step help in Money Transfers.
b) Always repay the monthly minimum or you'll lose the 0% deal.
c) Plan to clear by the end of the 0% period or they jump to the full rate - 20.9% & 20.6% rep APR. (See APR Examples.) | | | | | 5. | Bank-charge reclaiming isn't dead - 'I got £865 in unfair bank charges back'. Overdraft charges for busting your credit limit are the only thing that give payday loans competition for the most extortionate cost. With fees of up to £6/day or £15/transaction, they can mount up to £100s or £1,000s a year.
Reports of the death of bank-charge reclaiming have been exaggerated. It can still be done, though now you need to be in financial hardship to claim. Full step-by-step help & template letters in Reclaim Bank Charges for FREE. Claire emailed: "I'll get 6 years of charges back and a goodwill £70 on top... total £865. Thanks Martin." | | | | | 6. | Bust your overdraft limit & have a poor credit score? 0% respite. If you're facing bank charges, even if you're planning to reclaim, you need to sort it asap. Yet chances are your credit score ain't great either, so the switching options above won't help.
For short-term respite to help you repay, used carefully a poor-credit 0% spending credit card deal can help. The Aqua card (eligibility calc / apply*) offers 4mths at 0% on spending even to some with CCJs or defaults over a year old. After the 0% it's a horrid 34.9% rep APR. Full help on what to do in Aqua Help (APR Examples), but in brief...
- Do normal spending (after budgeting) on the card - just ensure you pay the monthly minimum on it and stay within your limit.
- As you're not spending from your bank, any income going there should reduce your overdraft to stop the bank charges.
- The fact you've had no charges should give you breathing space - use it to reduce what you owe.
- Aim to clear the card before the 0% ends, or it's 34.9% APR (though it's worth seeing if that's still cheaper than bank charges).
- Also talk to your bank about extending your authorised overdraft and see our Debt Help guide. | | | | | 7. | Manage your way back into credit. Whatever your overdraft, being in credit is better. To do that look wider than just banking products...
a) Budget. You need to know what comes in and what goes out. Then reduce spending accordingly. That means doing some work - yes, it's a chore, but it's worth it. Use the Free Budget Planner Tool to work through it and my piggybanking technique to help you stick to it.
b) Do a Money Makeover. While we're at it, are you paying over the odds? If so, ensuring you've got the best deal on EVERYTHING can save £1,000s and change your financial life. My full Money Makeover guide takes you through it.
c) Minimise fees. Ask companies you pay to shift your direct debits to just before you're paid. Eg paid on the 25th, aim for the 20th. This artificially boosts your balance so you're in the red for less time, meaning fewer charges - but budget carefully and don't forget those bills are coming. | | | | | 8. | Compare overdraft debt rate to the other debt, repay highest interest first. If you've multiple debts, write a list of what you owe, then see which costs most, adding up interest and fees for true costs.
If your overdraft's the most expensive, make minimum payments on all other debts, and focus on using incoming cash to clear that. If it's not the costliest, stay in your overdraft (but never bust your limit) and use spare cash to pay as much off the costliest as you can.
Once the most expensive debt is cleared, you're ready to tackle the next, and so on. See full Debt Repayments info. | | | | | 9. | Savings usually pay you less than an overdraft costs. I often meet people who have both overdrafts and savings. This isn't sensible.
A £1,000 overdraft costing £20/mth equals £240/yr, but the same in easy-access savings earns a paltry £15 at best. So repay debt with savings and you're £225 per £1,000 up each year.
You may think: "But I'll have no savings if the boiler packs up or the roof falls in". True, but if an emergency strikes, you can go back into overdraft and you'll be no worse off. To beat the fear, read my Repay Debt With Savings? guide. | | | | | 10. | Struggle to control spending? Shift to a no-overdraft account. Basic bank accounts provide a no-frills, no-overdraft current account service. So clear your current overdraft and you could move to one.
They used to charge fees if you spent more than you had, eg, for unpaid direct debits, but since January those have stopped. And if you spend when you've not got money, it'll still be rejected, but now there's no charge. Full info & best buys: Basic Bank Accounts. | | | |
A quick PS about my TV show: For the first time it's been nominated for a TV award. If you like it, then pls do vote here (page 11, then click through to submit). It'd be amazing to show that money programmes can compete in prime time. | | | | | | | | | | | | | | | | | | Specialist overseas credit cards give stonking rates in every country, so just pay off IN FULL and you win
The summer countdown's started. Yet if you overpay for holiday money, in effect you overpay every time you spend abroad. Some add £100s to holiday costs by getting costly euros, dollars or dong. But, bizarrely, one of the cheapest methods to spend abroad is also the easiest, as you can sort it now then use it in every country, for every holiday... -
 2mins to bag top rates every time you go away. Most plastic adds a 3%-ish exchange fee when you spend abroad, but a few specialist overseas credit cards market themselves as 'no fee', so you get the same near-perfect rate the bank gets, on the day that you spend (spending on them is cheaper than ATM withdrawals).
Our long-term winner is Halifax Clarity (eligibility calc / apply*) as it's a Mastercard (the underlying rate tends to beat Amex & Visa) and has low ATM withdrawal costs. New-ish card Creation Everyday's (apply*) ATM rates are a smidgeon cheaper but we've little feedback (let us know if you try it). Only do this if you repay IN FULL each month, or they're 18.9% and 12.9% rep APR respectively. For €1,000 (5 x €100 ATM withdrawals, 20 x spends)...
- Using Halifax Clarity (paid off IN FULL each month) costs: £778
- The cheapest bureau pick-up rate (London-only bureau) via our TMM comparison: £781
- Cash from the Post Office: £788
- Using a debit card from hell: £831
- Buying cash at the airport: £877
Will you get one? Use the Travel Cards Eligibility Calc. Full help & options: Overseas Cards (APR Examples).
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Can't get / don't want a credit card? Prepaid cards are available to all. You load cash on them in advance, so you usually get the rate on the day you load up, not spend, meaning for good or bad you're at the mercy of currency moves. Top picks are WeSwap and Revolut. Or, if you're buying £600+ of euros or dollars, FairFX adds £20 credit. Full info & more options in Cheap Prepaid Cards. -
Going away sooner? If you're jetting off for half-term and don't have time to get one of the cards above (allow 1-2 weeks), use our Travel Money Comparison to find the best rates for cash. Also see the full 15 cheapest ways to get travel money, and for the big question on everyone's lips, see Martin's Buy euros now before EU vote? blog. | | | | | | | | | | | | | | | Typical savings of £150/year for those on most standard prepayment tariffs - worth 5 minutes to check
Disgracefully, those on key, card or online prepayment meters, who include some of society's most vulnerable, pay massively more for energy. Lots of bull's been spoken by energy firms & politicians about how things have improved - nonsense. While still far from ideal, now two cheap fixes (not in NI) at least allow many to save a realistic chunk... -
 Cheap prepay fixes. The new cheapest tariff on the market is from iSupply and it's fixed for a year, so the price can't rise in that time (though your cost depends on usage). If you want to ensure no price rises for longer, there's also a cheap EDF fix till Oct 2017. With both you need to top up gas via card; elec via key.
Here's how they compare on typical usage. The links go via our Cheap Energy Club comparison which means you can double-check YOUR cost, as rates vary with use and region. Plus you get £30 dual-fuel cashback that you don't get direct (£15 gas/elec-only).
- iSupply 12mth fix average price: £1,020/yr + £30 cashback (via Cheap Energy Club)
- EDF fixed till Oct 2017 average price: £1,040/yr + £30 cashback (via Cheap Energy Club)
- Big 6 (E.on, EDF, Brit Gas, SSE, Scot Power, Npower) standard prepay tariff average price: £1,140/yr
As this shows, switching can typically save c. £150 including cashback. Neither of these tariffs has exit fees if you choose to switch again. iSupply is a new provider - only 28 voted in our last poll on it, but 64% said service is 'great' - EDF was 55% 'great', so both pretty reasonable. Vote on your energy firm's service.
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The 3 need-to-knows about switching energy. Full info in Cheap Prepaid Gas & Elec, in brief:
1) There's no downtime when you switch. Your electricity and gas stay on.
2) It's the same gas, same electricity, same safety. Only customer service and price change.
3) You can switch if you've debt, as long as it's under £500 per fuel (many are switched to prepay due to debts). -
Save typically £300/yr MORE if you can switch to a billed meter. The cheapest direct debit dual-fuel tariff on the same usage as above is just £735/yr. If you're with a Big 6 provider you can switch meter at no cost, as long as you're not in debt & pass its credit check. See Can I ditch prepay energy? for full pros & cons. | | | | | | | | | They can get this email free every week | | | | | | | | | NEWS: Airlines could now be more likely to settle, as if they don't, they face a bill of £150 if you take it further
If your flight's been delayed by 3hrs+ any time in the last six years, you could be due up to £460/person - we've a free online tool to help you claim. Plus, from 1 June, if the airline rejects you and you take it to the Civil Aviation Authority for a ruling, it'll now cost most of 'em £150 (those that haven't played ball with ombudsman schemes). This might spur them to settle legit cases earlier. All you need is in our Flight Delays guide, but for a quick briefing, fasten your seatbelts... -
 Flight delay compensation - the basics...
- You can claim for any delay, whether recent or dating back to 2010.
- You must've arrived 3hrs+ late (see how to check past delay lengths).
- All flights from EU airports count, or to EU airports if it's an EU airline.
- Compensation's fixed, based solely on delay & journey length. What am I due?
- It must be the airline's fault - eg, strikes don't count. See What counts?
- Airlines may offer vouchers, but go back to 'em - you're entitled to cash.
- Is it fair to airlines? Not always, eg, a £10 flight gets £460 compensation. See Martin's Legal vs moral concerns.
Daily we get success reports, eg, Marian emailed: "Followed MSE instructions for 4-year-old delay. Posted on the Friday and had an email the next Tuesday that my husband and I would receive £470 EACH."
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Free online reclaim tool. Our Flight Delay Reclaim Tool is a collaboration with complaints site Resolver, matching our template letters & experience with its tech. It auto-drafts your complaint, sends it, keeps track & escalates it if necessary. Feedback's usually good, eg, Deanne emailed: "Got back £3,300 from BA for 7 of us. So quick & easy." David emailed: "We received over £477 each by using Resolver to state our case. Very straightforward as they did everything for us." See our Resolver guide for how we work with it. | | | | | Two 'free' Legoland tickets via newspapers. Spend £6ish on papers, get up to £100ish of tickets. Legoland
Lastminute.com 50% off spa breaks + 15% extra off code. MSE Blagged. We've got you early access to its sale (on till Tue) for 42 venues + 15% off on £25+ spend (till 10am Thu). Lastminute
SUCCESS OF THE WEEK: (Send us yours on this or any topic)
"Thanks to MSE, we eventually got round to putting a PPI reclaim in with Barclays. Really easy and this week we received a refund of £2,520. Would encourage everyone else to do it."
Sainsbury's Tu 25% off EVERYTHING. In-store & online clothes discount, incl summer range & school uniform. Tu
£10 off £25 at local hairdressers, spas or salons. New Treatwell (formerly Wahanda) custs, ends Sun. Treatwell | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Thu 26 May - Good Morning Britain, ITV, Deals of the Week, 7.40am. View previous
Fri 27 May - This Morning, ITV, Martin's Quick Deals, from 10.30am. View previous | | | | Thu 26 May - BBC Radio Manchester, 4.20pm
Tue 31 May - BBC Radio Cambridgeshire, 2.20pm | | | | | | | Q: Is it correct that if goods bought online aren't faulty, the return postage has to be paid by the consumer? Shannan, by email. MSE Megan's A: In a nutshell, yes - if you're returning goods simply because you've changed your mind, then by law you DO have to pay return postage (unless the online retailer has a policy which goes above and beyond the legal minimum and says it'll pay). If you're returning something, your refund should include the original delivery charge, though if you paid for a more expensive delivery you'll only be refunded the cheapest option. See Web buying rights for more info. However, if the goods are faulty, your refund will include the delivery charge AND the retailer will have to pay any reasonable costs of returning them. Remember if you bought something in a shop, rather than online, you don't have a legal right to return it simply because you've changed your mind (though some shops will allow this). For more details see our Consumer Rights guide. Please suggest a question of the week (we can't reply to individual emails). | | | | | | | That's it for this week, but before we go, check out this thread from the forum: Bad prizes. When you start out, winning any competition may feel like winning the lottery, but old hands are more discerning. From pink-glittered wine glasses to bungee jumps, our forumites have compiled quite a list of undesirable prizes. What would you really rather NOT win? We hope you save some money,
Martin & the MSE team | | | | | | |
