Unlock £100s of savings with Martin's five-minute wallet workout
Get your purse or wallet out for Martin Lewis. No, thankfully he’s not going to take his clothes off, our Money Saving Expert wants to inspect it – he believes a five-minute wallet workout can speedily unlock £100s of savings…
1. Pull out your debit card – do you have a winner?
A debit card shows where you bank. So here are my key questions to see if you’ve the right account...
Do you pay a monthly fee? If so, work out its annual cost (£15/month = £180) and then ask yourself if the 'extras' the bank gives are worth this. If not, cancel it. Plus, if you were flogged it or told you had to have it, you may be able to reclaim all packaged bank account fees.
Does your bank make you happy? If not, then First Directis worth considering switching to. It’s a free account (as long as you pay in £1,000 a month) and gives newbies £100 to switch to it, and 92% of its customers rate its service as 'great'. Plus you also get access to a 6% regular savings account. If you want more, then Co-op Bank – rated 70% ‘great’ – is giving £150, plus up to £5.50 a month if you qualify for its Everyday Rewards scheme.
Are you overdrawn?Debit cards can be debt cards too. For small overdrafts you can switch again to First Direct which gives a £250 0% overdraft, and the £100 switch bonus will help clear some of it. Or Nationwide FlexDirect gives a 0% overdraft for the first 12 months.Do you have savings? Bank accounts nowadays also pay the highest interest on savings. The top picks are Santander 123which pays 3% on up to £20,000, Club Lloydswhich pays 4% on £4,000-£5,000, and TSB Classic Pluswhich pays 5% on up to £2,000 plus up to £5-a-month cashback on contactless purchases.
If you’re put off by switching bank accounts, don’t be. Switching account these days is quick and easy for most, and can be very lucrative, as Janet emailed: "Been with our old bank for 50 years, we were nervous about switching but it all went perfectly, plus we got £100 to spend on holidays. Ta."
2. Pull out your driving licence – is it valid? They only last 10 yearsA whopping 2.2 million licences are out of date. To check yours, look at section 4b on your photocard licence, it’ll show the expiry date. If you don’t and it’s expired you risk a fine of up to £1,000. You can renew it online (£14 fee), post off a form which you can get online or at most post offices (£17), or do it in person at some post offices (£21.50).
3. Got a credit card(s) that you pay interest on? STOPIt’s possible to cut £100s or even £1,000s by getting a 0% balance transfer credit card – that's where the new card pays off debt on old cards for you, so you owe it instead, but at 0%. This means more of your repayments clear the actual debt rather than just paying the interest, making you debt-free quicker.
The new longest 0% card that’s just launched is Virgin’s 40 months 0%, with a 2.54% fee, just pipping MBNA’s 40 months 0% with a slightly higher 2.55% fee. Or if you can clear your card quicker, Halifax gives up to 23 months 0% with no fee to transfer debt.
To find the very best deals – and most critically which’ll accept you – don’t just apply in hoMartin’s ‘Full best balance-transfers’ guide includes a free eligibility calculator which gives card-by-card odds of which you’re most likely to get – so you can home in on your winner.
Savings can be huge as Victoria tweeted me: "I got my fiancé to transfer his credit card balances to a 0%, saved £1,500 interest”.
Always follow Martin’s Balance Transfer Golden Rules
a) Never miss minimum monthly repayments, or the bank can end your 0% deal and charge far more.b) Clear the card or balance transfer before the 0% ends, or the rate rockets to 20.9% APR (MBNA) or 18.9% (Virgin Money and Halifax).c) Never withdraw cash or spend on the card. It’s not at the 0% rate. It’s often far more, and just doing it can hurt your credit file.
4. Do you have a donor card? If not, it's worth a thought
It's a big decision, but joining the Organ Donor Register could mean you save or improve up to nine lives. If it's for you, sign up online or call 0300 123 23 23.
5. Got a credit card and always repay in full? Make it PAY YOU
Every time you use a card, the retailer has to pay the card firm a transaction fee. With a cashback card you effectively get this put back in your pocket. As new regulations have cut these fees recently, cashback's been cut too, yet Amex cards are mostly exempted, so still pay a good whack.
The fee-free Amex Everyday pays 5% cashback (max £100) for the first three months, then tiered up to 1.25% after. The best non-Amex is Asda Mastercardwhich pays 0.5% cashback (1% in Asda). As Anna tweeted me: "@MartinSLewis Glad I read about Amex cashback card: I'll get over £200 paid".
Yet only do this if you'll set up a direct debit to repay IN FULL each month or you'll pay 22.9% (Amex) or 18.9% (Asda) rep APR interest, which more than wipes the cashback gain.
6. Sign up for a myWaitrose card for FREE daily tea and coffee Get the myWaitrose loyalty card and keep it in your wallet/purse, then when you swipe it in most stores you can get a totally free takeaway hot drink every day from the self-service machine without buying anything. Or if you spend in the cafe, you can sit down in it and get a barista-made cappuccino-type drink for free.
7. Not got a credit card…? You're less protected
Pay using a credit card and you get extra protection under the ‘Section 75 law’ – which means buy something costing between £100 and £30,000 on a credit card, and pay for any of it (even 1p) on it, and the card firm's jointly liable with the retailer for the entire amount.
This get-out-of-jail-free card is hugely powerful if the retailer goes bust or won't play fair, as Michelle found. She tweeted: "SuccessfulSection 75credit card claim, refunded £125 for non-delivery of phone order, used template on your website, thanks".
PS: If you've been burnt with credit cards in the past, or have little financial discipline, then ignore this point; better safe than sorry.
Or if you use a debit card, you’ll get a similar protection under the chargeback scheme, but it’s not as good and banks don’t have to legally cooperate.
As for cash – it’s far less secure. If you're going to use cash, always keep receipts in case you want to return items.
I remember being contacted by an old gent (in his 90s) who'd paid a big deposit at a restaurant for a planned birthday bash. The restaurant went bust and he asked me what he could do. As he’d paid cash, the answer was nothing. On debit or credit card, there would've been options.