Money isn't typically the first thing couples think about as they prepare for Valentine's Day, but it's important to consider how gifts will be paid for at short notice, especially if money is tight. After all, you may still be getting over an expensive Christmas, so we're here to help: we've compiled a breakdown of the latest tips and best deals around to help make this year's celebrations even sweeter.
"A little bit of planning can go a long way, and right now customers could give themselves some breathing space on their purchases by using a credit card with an introductory interest-free deal," said Rachel Springall, finance expert at Moneyfacts. Sainsbury's Bank currently has the best offer around, with a 29-month interest-free term on its Nectar Purchase Credit Card MasterCard. "This is an ideal card for large purchases, such as an engagement ring, which could cost up to £3,000," said Rachel.
The savings could be marked – our calculations show that if you put that same purchase on a standard credit card charging a typical interest rate of 18.9%, without an introductory offer, you could end up paying £409 in interest, even if £200 was paid off each month. Some debt would even carry over beyond next Valentine's Day, as it would take a year and six months to pay back*.
"It's odd to consider the gift of a savings account, but for some couples it really could help their future to start thinking about saving for high net worth purchases, especially if they are strapped for cash this Valentine's Day," said Rachel.
A regular savings version could be ideal, and Saffron Building Society has the market-leading offering: a fixed term account that pays 3.50% for 12 months with a maximum monthly investment limit of £200, you could save as much as £2,400 over the year, which could perhaps be used for a romantic getaway. Or, if you want a bit more interest, you could switch your current account to HSBC, first direct, M&S Bank or Nationwide Building Society, all of whom offer linked regular savers paying 5%.
"Current accounts can also help customers rack up a bit of extra cash, with upfront cash perks as well as extra cashback," said Rachel. "Given how easy it is to switch accounts
these days, there is little reason not to consider moving." If you want to take the plunge and get something back when you do, Halifax are offering £100 if you switch to its Reward Current Account, but only until March – after that the cashback will drop to £75, so you'll need to be quick! That said, you'll still get a £3 monthly reward and can get up to 15% cashback on your shopping, no matter when you make the switch.
There are plenty of other options too, and some current accounts can even help kick-start a savings habit, being viable alternatives to savings accounts. Nationwide Building Society, for example, pays 5% for 12 months on its FlexDirect account on balances up to £2,500, while Tesco Bank pays 3% on the first £3,000 saved, which they have promised will remain unchanged for the next two years. Check out the top interest paying current accounts for more options.
Then it's time to get really savvy and focus purely on money-saving tricks for Valentine's Day, and here, research is key. "Savvy shoppers could earn cashback when using cashback sites like TopCashback when they buy gifts or experiences," said Rachel. "Using vouchers is also an easy way to save a little bit of cash here and there, which can all add up to a decent saving, without in any way diminishing the sentiment."
So don't spend a fortune this Valentine's Day – a bit of forward planning can make all the difference, whether you want a cash injection by switching current accounts, start planning for the future with a regular saver, or simply want to save a few pounds on a romantic dinner with your loved one.
"It's easy to neglect your finances when you want to express your feelings with expensive gifts, but the gesture can come back to bite when the bill comes through," concluded Rachel. "With just one week to go until Valentine's Day, now's the time to work out how to afford it."
*Credit card cost based on a £3,000 debt with a fixed monthly repayment of £200 until the amount owed becomes less; thereafter a minimum payment of 1% of the debt plus monthly interest or £5 per month will be made, whichever payment is higher. Based on 18.9% APR it would take one year and six months to clear the balance, with £3,409 repaid in total.
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