Boost The Family Budget When You Work Your Money Harder
CHESTER, England, January 29, 2013 /PRNewswire/ --
- Maximising savings, current account rates and cash back cards combined could add almost £900* to your household budget
With petrol prices predicted to rise this week, and energy bills starting to land, MoneySupermarket.com shows how households can give themselves a welcome boost to the household budget by making three simple switches, according to new analysis. Consumers could earn an additional £884* in a year - £74 extra a month - by making the three switches across their savings account, current accounts and credit cards.
Someone with £5,000 sitting in a low paying savings account with an average Bank of England interest rate of 0.26 per cent would only see a return of £13 in a year. However, savers could achieve more than nine times this amount, by simply making the most of their tax-free allowance in an ISA. Each tax year, savers can put up to £5,640 into cash ISA account and won't be charged tax on the interest earned. Households could make their savings work harder by using a top-paying cash ISA with First Trust Bank at 2.5 per cent, and gain £125.
Taking advantage of cashback on offer from current account providers could also earn households extra money. The Halifax Reward current account pays £100 cashback when you switch and join**, plus £5 cashback each month. This simple move would bring in an extra £160 over a year.
Consumers who use their credit card to pay for everyday expenditure and clear the balance in full each month could boost their money by a staggering 2,300 per cent. By switching to a market leading cashback card such as the American Express Platinum Cashback card, which offers five per cent on up to £2,500 in the first three months and 1.25 per cent thereafter, the total interest for a credit card user spending £1,000 or more a month across groceries and petrol in a year would be £600.
Kevin Mountford, head of banking atMoneySupermarket.com, said: "It can be very hard to make ends meet while the cost of everyday living is still high and the latest suggestion that the cost of fuel will rise will add further pressure to stretched budgets. Consumers need to make the most of any available returns they can make to their income, and they can take action to help boost the family coffers by taking advantage of a range of offers currently available.
"Using a cash back reward card, a high interest savings account and a market leading current account is a clever way to make your money do the overtime so you don't have to. However, I would advise anyone thinking of doing this to ensure they are aware of the full terms and conditions of any products they apply for. For example, not paying in the minimum amount to a current account or making a late or missing a payment on a credit card balance would lead to interest being charged, effectively cancelling out any cash back benefit you have earned."
Notes to Editors:
*MoneySupermarket.com calculated the interest based on the following:
- £5,000 in a First Trust Bank Cash ISA 2.5%= £125
- American Express Platinum Cashback card over a year [five per cent on up to £2,500 in the first three months and 1.25 per cent thereafter when spending £1,000]= £624.10 - minus £25 annual fee = TOTAL £599.10
- Extra savings when opening Halifax Reward current account (£100 on opening and £5 monthly cashback) = £160
Total savings: £884.10
**Until 3rd March 2013
MoneySupermarket.com compares (at 27th Dec 2012)
- 134 car insurance brands and 97 home insurance brands
- 9 broadband providers and 20 energy providers
- 31 unsecured loan and 5 secured loan providers
- 62 mortgage lenders and 26 credit card providers
- 63 savings providers and 38 current account providers.
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