Be the boss of your finances

Published:
12 December 2012
Topic:
News,Money,Credit Cards,Current Accounts,ISA,Loans,Mortgages,Savings

In two weeks' time we all get a fresh a start, a chance to do things differently and an opportunity to better ourselves, and what better place to start than with your finances?

Maybe the extra spending associated with Christmas has got you looking at your finances a little closer recently, or perhaps it's something you've been putting off - whatever the case may be, New Year is a great time to get your house in order.

From savings and credit cards to mortgages and loans, here's a look at the current crop of the best deals on the market.

Credit cards

The credit card can take a hammering over Christmas as the 'buy now, pay later' mentality sets in. This is fine until the January bill arrives and you survey the damage.

You might have been savvy enough to put all your spending on a new, 0% purchase credit card such as the Tesco Clubcard Credit Card which offers as long as 16 months without charging interest any purchases you use it to make.

If, however, you have a balance on a card that is charging interest, don't delay in transferring it over to a new card that offers 0% on the debt.

Best deals

The Barclaycard Platinum Credit Card with Extended Balance Transfer is the current market leader for balance transfer cards, offering  0% for a massive 24 months, subject to a 3.2% fee. So if you've overspent to the tune of, say, £1,000 this Christmas, you could pay it off over two years without incurring any interest for a one-off fee of £32.

There are some catches though, as you can't transfer a balance from another Barclaycard credit card and you must be over 21 and have an annual income of more than £20,000 to qualify.

Two years is a long time, but you need to make sure you clear the balance within that time or face interest charged at a representative annual percentage rate (APR) of 17.9% (variable).

Alternatively there's the Barclaycard Platinum Credit Card with Balance Transfer with 0% for 23 months, subject to a 2.9% fee. You have to be over 21 and earning more than £20,000 a year to qualify.

There's also the NatWest Platinum Extended Balance Transfer Card offering 0% for 23 months, subject to a higher-than-Barclaycard's 3.5% fee. It also offers 0% on purchases for six months, although you may not want to use this if you're trying to pay down the balance.

Our SmartSearch tool will give you an indication of how likely you are to be accepted for a given card, but if you're not you can compare other cards on our credit cards channel.

Loans

If you have big plans for 2013, or you are looking to consolidate expensive debt, a personal loan is likely to be your best option.

With a loan you get the peace of mind of knowing what your monthly payments will be over an agreed set term. What's great is that loans providers have been engaged in a bit of a rate war recently, each fighting for the top spot by lowering borrowing costs.

Best deals

Derbyshire Building Society marginally came out on top, offering a headline APR of 5.4% on loans of between £7,500 and £15,000 taken between one and five years. As a representative example, if you borrowed £10,000 at 5.4% and paid it off over four years, you'd pay £231.52 each month - meaning you'd end up paying a total of £11,113 over the term.

Sainsbury's also offers 5.4% on the same amounts, but only for between one and three years - and you'll need to be a Nectar card holder.

Be aware that your personal circumstances and/or credit rating might prevent you from getting the best personal loan rates. Fill in your details over on our loans channel and you'll get an idea of what is available to you.

Savings

Savings rates have been on a slippery slope in recent weeks, so if you do have money to put away you'll need to keep an eye on changing rates.

The current market-leading easy access account is the Post Office's Online Saver Account (Issue 8), which pays an annual equivalent rate (AER) of 2.35% on a minimum investment of £1. This does include a 12-month bonus of 0.70% though, after which the rate will drop to 1.65% AER. The account also must be managed online.

You can compare it against other easy access accounts here.

In regular savers accounts, West Bromwich Building Society is offering 4.10% AER on its Fixed Rate Regular Saver account. You'll need to pay in between £10 and £250 each month, but you can miss up to two payments.

The maximum you can invest is £3,000 and withdrawals are not allowed during the fixed term. Applications must be made in-branch.

If you've not yet made the most of your ISA allowance for 2012/13 yet, time is running out as the new tax year begins on April 5.

Top of our ISA tables at the moment is ING Direct's Cash ISA, paying 2.50%, guaranteed and tax-free for 12 months. It can be opened with as little as £1 and can be managed over the phone and online.

You'll need to keep an eye on that rate to see what happens after the 12 months, as you may want to move your money to a more competitive account. This account does not allow transfers in.

Coventry Building Society is offering an attention-grabbing 3.10% AER on its 60-Day Notice ISA (2), but as its name suggests there's a catch. For any withdrawals you make without 60 days' notice, you'll be charged 60 days' interest on the amount withdrawn. The headline rate also includes a first-year bonus of 0.60%, bringing the rate down to 2.50% thereafter.

Mortgages

Speaking of getting your house in order in the New Year, let's look at mortgages.

Best deals

Currently leading the pack, rate-wise, is HSBC's 1.99% mortgage deal, fixed until February 2015. It sounds very attractive, but does require a deposit of 40%, which means a lot of people will be priced out. After the two-year fixed period ends, the rate reverts to the bank's SVR which is currently 3.94% and could change.

MoneySupermarket research shows that switching a £150,000 mortgage from the average SVR of 4.33% to the current market-leading two-year tracker rate from ING Direct at 2.49% also for a 40% deposit, would save you £794 over the course of the year.

Current accounts

If you have been dissatisfied with your bank for years, whether it's customer service, charges or lack of interest on credit balances, voting with your feet and switching is, these days, hassle-free and even lucrative.

Best deals

Switching to a new current account could earn you a welcome gift of £100. The 1st Account from First Direct is offering the incentive right now.

Also, with the average overdraft rate sitting at 19.65%, if you find yourself going into the red each month then switching the First Direct account could save you £46 a year with its 15.9% overdraft rate, according to statistics.

This is not the only attractive option though as Laura Howard explains in her article, Get the best current account for 2013!

Energy

All of the Big Six energy companies have now hiked their prices, but that doesn't mean there's no money to be saved by switching from your current deal, especially as temperatures are falling sharply.

As a rule of thumb, dual fuel online tariffs are cheapest, so if you're paying separate providers for your gas and electricity, or you're not managing your account online, there's money to be saved.

Best deal

Our number-crunching shows that switching from paying quarterly by cash or cheque to the best online dual fuel tariff, households could save an average of £214 over the course of the year with the First Utility iSave v13 tariff.

TV, phone and broadband

If you're paying separate providers for your telephone, TV and broadband, you could save money by bundling them all together.

Our broadband channel will show you which provider is offering the best bundles and how much you could save by switching.

Pile on the pounds this New Year

MoneySupermarket's head of banking Kevin Mountford offers this advice on starting the New Year in good financial shape:

"No matter what your main financial concern is in the current economic climate, it is vital you put your house in order in the New Year to ensure your finances are on the right track for 2013.

"Apathy is rarely rewarded, so taking a few minutes to search the market, comparing the deals you are currently on with what is being offered and switching to a better one, could be the best resolution you make this New Year."

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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Mark Hooson

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