Is there anything better than free cash? Getting a much-needed injection of funds into your account without having to put in too much effort feels good, and can help get rid of lingering debts or bump up your Christmas budget.
We’ve got two great banking tricks that many financially-savvy people swear by. Switching accounts is quick and easy – ideal for novices – while stoozing is a bit more complicated, but with the potential to yield better results.
Switching accounts
Banks want you as a customer. More than that, they want you to ditch your existing account and bring all your transactions over to them. And they’re often willing to pay you to make it happen.
Many different banks are now offering switch incentives to new customers who are willing to change their main account. Usually in the region of £100 – £200, all you need to do is complete the paperwork and wait for your funds to roll in. Their may also be some criteria, such as paying in a minimum balance – but for most people the criteria will be fulfilled simply by paying in your salary and carrying out normal day-to-day banking activity.
One word of caution: make sure you’re happy with the service offered by your new bank before you switch. This includes checking things like where your nearest branch is, and reading up on online reviews. Changing to a bank that doesn’t offer the service you require will give you a headache, and that may not be worth the extra cash!
Becoming a ‘stoozer’
It might sound like some kind of futuristic jargon, but stoozing is actually the name given to using 0% credit cards to earn interest. It’s only recommended to people who are debt-free, with a good credit score and a decent grasp of their finances. While the risks should be low, those who forget to make payments when they should (or who get carried away with credit card spending) should probably look away now, as you need to be on the ball.
So how does it work? First of all, you’ll need to bag yourself a 0% credit card that offers zero interest on new spending. You want the 0% period to last as long as possible. This means that you can use your card for day-to-day spending without having to pay any additional money.
Once you’ve got the new card, start using for all of your spending. Groceries, birthday presents, trips abroad… it should all go on the credit card. This will allow you to take your monthly salary and stick it in a high interest savings account. The idea is to only make the minimum payment on your credit card each month, until the 0% period is over. Your savings will quickly add up, and you’ll be able to earn interest that wouldn’t have been possible otherwise.
When your interest-free period is about to come to an end, simply use the savings you’ve built up to pay off the balance in full – and pocket the interest that you’ve earned. The key tip here is to make sure you’re only spending your usual amount, covered by your income, as it will all need to be paid off eventually. Most people will want to play it safe by putting the cash into standard savings rather than stocks and shares, so you’re not at risk of losing any money.