The kids are heading back to school and parents everywhere are breathing a sigh of relief, but could you do with a bit of extra tuition as well? Financially speaking, of course! Now could be the perfect time to take stock of your finances and teach yourself a thing or two, so here's a quick run-through of the areas you may want to focus on.
Many consumers are steadfastly loyal to their current account provider, even if they don't get anything in return for their fidelity. Isn't it time you got something back? Now that the seven-day switching service is in operation there's no reason not to switch your current account, particularly as there are so many enticing offers out there. For instance, high interest current accounts can pay up to 5% in interest, a rate that easily beats the best savings accounts, so despite a few restrictions, they could well be worth a look.
It's the time of year when many parents look at the credit card bills in vain, and if the summer holidays have taken their toll and you're unable to pay off your balance in full, it may be worth considering a balance transfer deal. Not only could you get up to 40 months of interest-free balance transfers with the top card on the market, but there are currently 13 deals that come with absolutely no balance transfer fees, so you can move your debt at no cost. However, you still need to be organised – the whole balance must be repaid before the introductory deal ends to avoid interest adding to your bill, so remember to make at least the minimum payment each month.
Do you rely on your overdraft to make ends meet? Well, with the average authorised overdraft rate standing at 15.76% EAR, doing so can become a costly affair, so it may be time to look to alternatives. A more cost-effective option could be to use your credit card to top-up your balance: a handful of credit cards allow customers to transfer funds straight into their bank account for a small fee (often known as a money transfer), and if this is done with an introductory offer, customers can benefit from even greater cost-effectiveness. However, as with the balance transfer idea, borrowers must always pay off their credit card balance in full by the end of the introductory deal to make this a worthwhile solution.
Cashback and reward cards can be a great way to earn tax-free cash and rewards on your everyday spending. Some cards offer excellent introductory deals – in some cases up to 5% cashback on purchases – which could be great for those with a big purchase in mind or who are looking to benefit from their Christmas spending. However, if you don't spend during the introductory period you'll miss out on the offer, so this will best suit regular card users.
It's also worth remembering that this will only suit those who use their credit card to manage their day-to-day spending and then pay the balance off in full each month. Fail to do so and the interest charged will completely negate the benefits of the cashback, so make sure you're on top of your game if you want to (literally) reap the rewards.
It can't be denied that the summer holidays can be expensive, but if they still take you by surprise each year, why not prepare for the cost of next summer with a regular savings account? By setting up a direct debit from your current account you can easily build up a sizeable pot, and you may not even notice the funds leaving. Regular savers often trounce other flexible savings accounts, too: our figures show that the average rate paid on a regular savings account is currently 2.27%, which dwarfs the 0.67% paid on the average easy access account.
If you're currently sitting on your lender's standard variable rate (SVR) or are coming to the end of a fixed rate mortgage deal, now is the perfect time to look for a better offer. Mortgage rates are currently at all-time lows but they won't stay that way forever, so borrowers can save a significant sum by opting for one of these low-priced deals before they're gone. It could seriously pay, too: by opting for the average two-year fixed rate of 2.81% instead of staying on the average SVR of 4.84%, you would be £1,996.56 better off after just one year.
So, is it time to send your finances back to school? It could be time to do just that! Not only could you find ways to save money now, but knowing where your finances lie could offer long-term benefits, too. "A well-deserved sit-down to sift through your income and expenditure will highlight any areas you need to tackle," said Charlotte Nelson, finance expert at Moneyfacts.co.uk. "Fixing your finances sooner rather than later will lift a massive weight off your shoulders and make things far more manageable." Start going through your budget to see where you could make some changes, and you too could become top of the class.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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