Martin Lewis has shared some tips on how to manage your bank account and potentially earn some extra cash. The savings expert issued some general guidance that applies to customers with any of the big-name banks such as Barclays, Lloyds, Halifax and Santander.
The call to action came in response to a question on his BBC podcast about switching bank accounts. A woman wrote into the show saying she currently banks with Lloyds Bank and but had her eye on some current account switching offers from other banks.
Bank switch offers
Many banks are offering one-off payments if you move over to them. This includes Nationwide Building Society offering £175, Barclays issuing £200 payments, Santander offering £180 and NatWest paying you £200.
HSBC is also issuing payments of £500 and First Direct is offering a £200 bonus. However, in this case the questioner said she didn’t want to move away from Lloyds as they get extra perks with their account, including cinema ticket vouchers.
Club Lloyds customers can choose from a list of Lifestyle Benefits. Extra perks on offer for customers include a Disney+ subscription, coffee and dining offers and vouchers for cinemas including ODEON and Vue.
Her question was whether she could open a spare account just by switching a couple of direct debits and meeting the other criteria, and so cash in a switching bonus, but still keep her Lloyds account as her main account.
‘Absolutely possible’
In response, Mr Lewis had some good news for the would-be switcher. He said: “Everything you say is absolutely possible and is the textbook way for savvy money savers to do this.”
However, he said it does take “a little bit of planning” to cash in on a string of these switch offers. Mr Lewis explained that the idea here is to run a “mule account” or a “burner account” which you move between providers to cash in on these switching incentives, potentially earning you many hundreds of pounds.
Mr Lewis said: “You’ve got to check the terms and conditions each time, but there are lots of people who do this and who make thousands of pounds.” He went on to say that many of his team at Money Saving Expert have “made decent money” through cashing in on these offers.
He advised starting off by opening a basic current account with no added frills or perks, so you can move it over easily when you want to cash in on a switch offer. These switch offers often involve moving over two direct debits, so you will need to have these set up in your burner account ready to move over.
You may also have to pay in an amount as part of your switch to qualify for the bonus.