KEEPING on top of your finances has never been more important, which is why you should avoid these four big banking mistakes.
Budgets are being squeezed to the max and many households are combing through their statements to see if they can cut costs.
Martyn James explains banking mistakes you MUST avoid
But making a few tweaks to the way you’re banking could help you manage your money better, Resolver’s consumer expert Martyn James said.
He’s part of HOAR’s panel of experts on the Squeeze Team – here to help you through the worst cost of living crisis seen in decades.
If you’re worried about making ends meet, are struggling to pay off your debts or don’t know how best to manage your cash, get in touch by emailing [email protected].
Mistake one – missing out on bank switch deals
Banks often offer incentives to new customers to switch with the aim of getting new business in.
Currently, First Direct are offering £150 to new customers, and Nationwide’s FlexDirect is paying up to £125.
Meanwhile, Virgin Money is offering 20,000 Virgin Points to spend with Virgin Red.
Customers can choose between a host of rewards when spending points, including a return flight to the Caribbean, Sofar Sounds tickets, 100 Greggs sausage rolls and more.
Switching deals can be a great way to get free cash – but you’ll want to look into whether it is worth it first, Martyn said.
“All you need to do is a bit of research on the best bank deals out there, find a bank and apply, pick a switch date (it takes seven working days) and your new bank will do the rest.”
You can then find the deal that best suits your needs using a comparison site such as Uswitch or Compare the Market.
Be aware of all the terms and conditions – you often have to deposit a certain amount of money into your new account.
To switch, you’ll need information like income details, proof of address and proof of identity – then the bank will usually handle things from there.
Mistake two – having one current account
Most people use their current account as their main, and only, bank account.
But it could mean you’re missing out on what other banks are offering – or be left unable to access your cash if there’s a tech fail.
Sometimes, banks will experience outages, which leaves customers unable to log into their accounts, make transactions, or get their salary on time.
When Nationwide went down in January for the third time in just a matter of weeks, one mum was left with no money to pay for her shopping for her two disabled sons.
Having just one current account could put your cash in danger if you fall victim to a scam.
“If you have just one account you’re more at risk if fraudsters get hold of your details,” Martyn said.
It’s worth remembering that having lots of accounts with credit could also damage your credit score, so you need to strike the right balance.
Mistake three – not going through your bank statements
If you’re struggling for cash or behind on bills, it can be tempting to stick your head in the sand and not look at your bank balance.
But leaving your bank statements unopened is a missed opportunity to rework your budget or figure out ways to save cash.
Sitting down and going through your finances in detail can help you see whether you’re paying for something you don’t really need.
You might ditch that gym membership or cut down on takeaways after looking through your transactions – and it could save you hundreds, Martyn said.
“Go back 13 months through your bank statements and note down anything that you don’t recognise,” he said.
“The reason for this 13 month timeline is because many businesses sign you up to annual payments that might have slipped under your radar.
“So go back a year and overlap by an extra month and you should
Mistake four – not being clued up on chargeback rights
Many of us have had a delivery nightmare where our package arrives broken, we’ve got the wrong order, or it’s gone missing.
In these situations, you can ask your card provider to “charge back” your money.
It means that your bank withdraws funds deposited into the retailer’s bank account and puts the cash back into yours.
“This is not the law, but it is a scheme operated by the main banks and card providers to help you out if things go wrong,” Martyn said.
“There is a time limit on making a claim though, so seek help as soon as it’s clear that something goes wrong.”
You have 120 days from making the purchase to make a claim.
Chargebacks come in handy if you paid for your haul via debit card.
It can also be used if you paid via credit card for a purchase under £100 – if it’s over that amount, you’re covered under Section 75 of the Consumer Credit Act to claim a refund.