10 tips to whip your summer finances back into shape

10th Aug 18 | Lifestyle

As budgets feel the strain from summer spending, here's how you could rein yours in.

Pink piggy bank with beach items and money being put in

It’s easy to over-indulge over summer. Whether you’ve already overspent or are in danger of doing so, why not try and give your budget a summer workout?

For many people, the summer can be just as expensive, if not more so, than Christmas. So if you’ve got a bit of spare time to sort your finances, it’s worth taking some time out from the sun to work out ways to make summer spending a little less painful.

Here are some tips from Brian Brown, head of insight at financial information business Defaqto:

1. Get a cashback credit card
Use it for major purchases and get money back off your shopping. Remember, you should always pay your card back on time.

2. Look for balance transfer credit cards with no fees
If you have credit card debt and can’t pay it off all at once, you might want to consider taking out a new card with 0% interest, which also lets you transfer the balance with no extra fee. Offers for introductory 0% balance transfer deals with no fees include deals from Barclaycard, Sainsbury’s Bank and Lloyds Bank.

3. Borrow on a money transfer credit card
If you’re making a big purchase such as a car, or new kitchen and need to take out a loan to pay for it, consider instead using a money transfer credit card. You transfer the money you need into your current account and pay a fee, but then pay no interest for periods as long as 32 months. Depending on individual circumstances, this can often work out cheaper than the cost of a personal loan. Watch out for special offers – sometimes card providers have special deals offering money transfers with lower fees.

4. Switch your current account provider to get a reward
For example, M&S Bank has been offering a £125 M&S gift card for switching and up to an additional £60 when you stay for 12 months, while Halifax has been offering £75 cash for people to make the move.

5.  If you need a personal loan and are getting a quote from your lender, check to see if you can get a lower interest rate by taking a larger loan
Some lenders charge lower interest rates if you borrow more, so the total amount you repay might be lower if you borrowed more money. This might seem counter-intuitive, but the savings can be very big.

6. Watch out for the exchange rate if you are considering buying foreign currency from your bank
Banks’ exchange rates can be less generous than those from high street retailers.

7. Many people are used to using their debit cards for small contactless payments. But if you do that while abroad, it could be very costly
A large proportion of accounts charge a flat fee – typically £1.25 to £1.50 – for debit card transactions in Europe. On top of that, they will charge a further currency exchange fee, typically 2.99%.

8. Similarly, taking out small sums from ATMs while travelling abroad in Europe can be very expensive
Some banks charge a currency fee for the cash – and in some cases there can also be an additional fee of as much as £1.50 per withdrawal.

9. Many home owners with a mortgage are sitting on their lender’s standard variable rate (SVR) because they have come to the end of a fixed deal
Often, these are much higher than the best fixed rate from the lender. Customers on SVR mortgages should consider moving to a decent deal whenever their current deal ends.

10. Join a cashback website
Websites such as TopCashback and Quidco have links with many retailers. Before you buy, check if these websites have a link to the retailer you’re buying from. If you follow the links from the cashback websites and make a purchase, you can often get a sizeable amount of cashback on your spending.

© Press Association 2018