In your overdraft? Martin Lewis says this bank will pay you to switch accounts

Martin lewis explains the student finance deadline approaching
In your overdraft? Martin Lewis has some advice for you (Picture: Ken McKay/ITV/Shutterstock)

As just about everything remains hellishly expensive, many of us end up in our overdrafts at the end of the month – but it can be stressful to be constantly living out of it.

Now, Martin Lewis’ Money Saving Expert (MSE) has revealed how you could claw back some of what you owe simply by switching bank accounts.

In his weekly newsletter, the nation’s beloved finance guru revealed that First Direct’s 1st Account offers a free £200 sign-up fee, split between £175 cash and a £25 Amazon voucher.

Overdraft usage remains a point of stress for many Britons, as in April 2024, data from YouGov Finance found that over the previous year, three in ten (30%) went overdrawn at some point during the month.

So, how does it work? If you’re already in your overdraft with another bank (and owe less than £425), First Direct will pay you that fee to sign up for their £250 interest-free overdraft.

In layman’s terms: the free £175 switching fee will pay off some of what you owe and because the rest is at 0%, you’ll have longer to catch up without doing damage to your wallet.

The account also allows you to save £300 each month into its linked one-year 7% fixed-rate regular saver, allowing you to stretch out your savings a little further.

If you’ve got a summer holiday planned, there are travel benefits too. When paying by card abroad, the account doesn’t add a foreign exchange fee, so you’ll be entitled to the same ‘near-perfect’ exchange rate as the bank. How’s that for no nasty shocks on your holibobs?

Be warned, though: Martin notes that the deal might not be around for long. And, since it’s an online exclusive, you’ll need to apply via MSE’s link specifically to access the deal.

Within the first 30 days, you’ll also need to pay in a minimum of £1,000 (which you can then withdraw or transfer elsewhere, if you need to), use the debit card more then five times, and log into your online banking account at least once.

You’ll then need to switch over more than two direct debits or standing orders to qualify.

One final caveat: only First Direct newbies not switching from HSBC (and who haven’t opened an HSBC current account since 2018) are eligible for the deal.

Ready to enter your overdraft-free era? Go forth and prosper.

Martin Lewis explains why you should avoid paying in pounds on holiday

The summer holidays are just around the corner and even if you booked your trips months – or even a year – in advance, you can still save money and put it towards making memories.

Martin Lewis’ Money Saving Expert (MSE) recently explained that cost control is as much as a priority as ever, and it’s important to constantly check prices to make sure you’ve scooped up the best deal.

One important trick you’ll need to know after demolishing your plate of food at a tasty restaurant or once you’ve purchased souvenirs is whether to pay in pounds or the local currency.

Martin wrote a blog post about the pitfalls of spending pounds if you’re using a card abroad, such as a Visa/Mastercard or a cheap travel credit card.

When paying in euros, the bank does the conversion for you which includes a 3% load. This means £100 worth of euros will cost you £100. However a travel credit card will give you £100 of euros will cost £100, Martin explains.

But if you decide to pay in pounds when using your card, expect to pay what is known as ‘dynamic currency exchange’. When paying or withdrawing money on a cash, the foreign bank does the conversion for you.

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