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Holy moly it’s been a sweet minute.
With everything else being automated and being unable to top up my LISA until next year, I’m going to do something I’ve been threatening to do for a while: play the debit switching game.
What is it?
These are essentially incentives offered by banks for moving your debit account to them.
These died a death during the lockdown, but are starting to creep back with a few nice rewards enticing people to switch.
How does it work?
You open a ‘ghost’ debit account – one separate from where my pay goes into so I don’t have to keep changing direct debits or account details with HR. This can be with your current main bank or different one.
You switch this account – using the current account switching service – to another bank account that offers some sort of cash incentive.
This usually has conditions attached to it so you’ll need to read the T&Cs carefully, but they’re usually not too difficult to qualify for.
You do this every few months (again depending on the condition of the account switch), switching between accounts that offer rewards for doing so.
The result? You end up with a few nice cash rewards and maybe some other additions along the way for little to no cost (the only cost may be a few small direct debits required to qualify).
What’s the plan?
Now these account offers open and close down all the time, so this initial plan may change as one disappears and others start to replace it.
I’ll start by opening a basic Monzo accounts my ghost account. Why Monzo? If they’re anything like Starling they’ll be quick and easy to set up and get started with.
I’m going to first switch to the First Direct 1st Account for the £150 switching offer. You only qualify for this if you have’t owned an HSBC or First Direct current account on or after 1 January 2019. Note – you could also use this as your starting point by opening this account without switching as they offer £20 just to open it, but it would mean missing out on the £150 when switching from an account outside First Direct/HSBC.
The next good option would to switch to Club Lloyds who are offering £125 incentive. You can either pay in £1,500 or the £3 a month fee to qualify. This incentive also offers one of four perks per year: six cinema tickets, 12 digital movie rentals, a Gourmet Society membership, or an annual magazine subscription. Note – this switch incentive is only until the 27th June so a little too short notice for me this time I think.
Nationwide up next with an incentive to switch to their Nationwide FlexDirect account. Existing Nationwide customers can switch for a £125 bonus, while new members a ‘paltry’ £100. I have a debit account with them anyway so I may take advantage of this through this route. You also get 2% fixed interest on up to £1,500, but this is negligible so I won’t be bothering with this.
So, circling back to my First Direct account, I’ll now switch this one to the Virgin Money M Plus* account. This one isn’t a direct cash bonus, but comes with 20,000 Virgin Red points. These points can be spent on a great many trips out and experiences. To qualify you just need to pay in £1,000, use the mobile app and have two direct debits.
Finally I’ll switch to the Chase current account not for any referral bonus but to qualify for the 1.5% interest through its linked easy-access savings account. Despite being lower than Nationwide’s interest offering, it allows for amounts of up to £250,000. This is a little better for a sizeable cash sum for an emergency fund of lump sum.
There are a few other account switch offerings (Natwest and Halifax for example), but they’re pretty crap so I won’t be bothering with those.
Overall… I’ll be left with £270, 20,000 Virgin red points to spend on some trips out, and an account offering 1.5% interest which I haven’t had since probably before the Brexit vote (I wrote this as a joke, but I actually don’t think it is as I’ve come back to proof this post…eesh).
A sign of things to come?
Hopefully tis is a sign of things to come.
Bank current account switching offer used to be so commonplace that there were stories of people making a tidy sum from them.
During and post-pandemic, they’ve become few and far between, but these few now available will hopefully get the banks to start competing with each other again for our business.