Ditch Your Dogs For These Stars!

Why put up with Don't Buys when you can enjoy Best Buys? We've found great deals for banking, borrowing and saving...

It really drives me crazy when I discover that I've been ripped off. In fact, I'm so suspicious about being fleeced that it's just about impossible for financial firms to convince me to buy anything nowadays. Indeed, I suffer from what I call FAB: "financial advertising blindness"!

Of course, things weren't always this way. In fact, I only began rearranging my finances for the better in the late Nineties. Until this point, I grabbed whatever financial products I could get my hands on. Alas, in the midst of a long borrowing binge, I ended up with three personal loans, thirteen credit cards, and a debt burden which came close to £50,000. Ouch!

These days, I'm a lot pickier when it comes to choosing financial items. After almost two decades of working in financial services, I find it relatively easy to find products to suit me. On the other hand, I feel sorry for other people, who have to sift through thousands of different bank accounts, credit cards, savings accounts and so on in order to decide which are right up their particular street.

Anyway, to help you to swap your dirty dogs for shining stars, I've trawled through the database of independent financial researcher Moneyfacts (which powers the Fool's search engines for credit cards, personal loans, savings accounts, etc.) in order to find the cream of the crop. So, without further ado, here is my pick of the best products for banking, borrowing and saving:

1) CRACKING CREDIT CARDS

With over 1,300 differently branded credit cards to choose from, British borrowers are completely spoilt for choice. Hence, it's important to narrow things down, with the acid test being whether you always pay off your monthly credit-card bills in full.

Full payers should go for cashback: if you never borrow on your credit card, then you should switch to using a Best Buy cashback credit card, which pays you an annual cash rebate based on your level of spending. What's more, you can combine your cashback credit card with your favourite store loyalty cards in order to reap even greater rewards. Here's the first list:

Best Buy cashback credit cards

Card	Cashback offer	Purchase interest rate (% APR)
American Express Platinum	0.5% on first £3,500 1% on £3,501 to £10,000 1.5% on £10,001+	12.9
Egg Money MasterCard	1% on £1+, guaranteed until 31/01/07 Minimum cashback earned must be £5+	7.9
Leeds BS MasterCard	0.5% on all spending	16.9
Morgan Stanley Platinum MasterCard	Triple cashback until 01/02/07: 3% on first £2,000; 1.5% on £2,001+ Normal cashback: 1% on first £2,000; 0.5% on £2,001+	15.9

On the other hand, if you owe money on existing credit- and store-cards, you stand to save a king's ransom by transferring these debts to a credit card which offers 0% on balance transfers for an extended period. Here are the best of the balance-transfer deals:

Best Buys for 0% balance transfers

Card	0% transfer deal	Transfer fee	Purchase interest rate (% APR)
Virgin MasterCard	12 months from transfer date	2% (Min £3)	15.9
MBNA Platinum Plus Visa	12 months from date account opened	2% (Min £3)	15.9
Marbles MasterCard	12 months from date account opened	2% (Min £5)	15.9
GE Money Transformation MasterCard	12 months from date card issued	2.5% (Min £5)	12.9
Barclaycard Flexi-Rate Visa	12 months from date card issued	2.5% (Min £6.25)	14.9

Lastly, if you're planning lots of purchases, or a single large purchase, and would like to spread the cost over as long as possible without paying any interest, then these cards are for you:

Best Buys for spreading the cost of purchases (0% on purchases)

Card	0% on purchases deal	Purchase interest rate (% APR)
GE Money Transformation MasterCard	0% for 12 months	12.9
Halifax One MasterCard	0% for 12 months	12.9
Marks & Spencer Money &More MasterCard	0% for 12 months	16.9
Sainsbury's Bank MasterCard	0% for 10 months	15.9

2) CLASSY CURRENT ACCOUNTS

So, you've found a first-class credit card, now how about a brilliant bank account to go with it? Your ideal current account will depend on whether you stay in the black (in credit) all the time, or whether you occasionally or often slip into the red (go overdrawn). Here are the top accounts for those who stay in the black:

Best Buy current accounts for credit interest rates

Account	Credit interest rate (% AER)	Notes
Alliance & Leicester Premier Direct	6.10	You must pay in £500 a month. 0.10% paid on excess balance over £2,500.
HSBC Bank Account Plus (this is a packaged account)	6.00 (for one year)	0.1% paid on excess balance over £2,500. Monthly fee: £9.95 for 6 months, then £12.95.
Coventry BS First	5.35 (on up to £250k)	You must pay in £1,000 a month. Includes a bonus of 0.85% for one year.
Halifax High Interest Current Account	5.12	You must pay in £1,000 a month. 0.1% paid on excess balance over £2,500.

If you can pay in £500+ per month, but don't keep a credit balance in excess of £2,500, then the Alliance & Leicester account is the clear winner. For those with large credit balances, Coventry BS leads this pack.

Then again, for customers who sometimes or frequently find themselves overdrawn, it's important to keep overdraft interest and charges to a minimum. These are the top current accounts for customers who spend some or all of their time in the red:

Best Buy current accounts for overdraft interest rates

Account	Interest rate for authorised overdrafts (% EAR)	Interest ratefor unauthorised overdrafts (% EAR)
Alliance & Leicester Premier Direct	0% for 12 months on up to £2,500, then 5.9%	5.9
Nationwide BS FlexAccount	7.75	24.9
Halifax Moneyback	On transferred accounts, fee- and interest-free overdraft of up to £2,500 for 120 days, then 7.9%	28.8

As you can see, the Alliance & Leicester account is the knockout winner for borrowers!

3) PERFECT PERSONAL LOANS

Before you choose an unsecured personal loan, you need to learn the tricks of this trade. Otherwise, choosing the wrong loan could cost you thousands of pounds more than it should, so be sure to read my twelve tips to choosing the perfect personal loan. Here are the cheapest deals at present:

Best Buy unsecured personal loans without payment protection insurance (PPI)

(for £5,000 over three years)

Lender	Total amount repayable (£)	Typical APR (%)
Moneyback Bank	5,435.28	5.6
Masterloan	5,439.96	5.7
Abbey (online)	5,447.52	5.8
Northern Rock	5,455.44	5.9

If you need to borrow a larger sum, for example, to buy a car or pay for home improvements, here's the table for a loan of £10,000 over five years:

Best Buy unsecured personal loans without payment protection insurance (PPI)

(for £10,000 over five years)

Lender	Total amount repayable (£)	Typical APR (%)
Moneyback Bank	11,460.60	5.6
Masterloan	11,476.20	5.7
Abbey (online)	11,502.60	5.8
Alliance & Leicester	11,529.00	5.9
Northern Rock	11,529.00	5.9

4) SUPERB SAVINGS ACCOUNTS

Finally, there are over four thousand different savings accounts to choose from in the UK, which means that it's fiendishly difficult to find your ideal choice. In short, the first £3,000 of cash savings each year should go into a cash mini-ISA, which is a savings account that pays tax-free interest, often at market-beating rates. After this, you should pop the rest of your emergency fund, nest egg or rainy-day money into an easy-access account which pays the very highest rates of interest. Here is the cream of this crop:

Best Buy easy-access savings accounts for £250+

Account	Interest rate (% AER)	Notes
Icesave Easy Access	5.45	Rate guaranteed to be at least 0.25% above base rate to 01/10/09 and then at least equal to base rate to 01/10/11.
ICICI HiSAVE	5.45	Rate guaranteed to be 0.25% above base rate until 31/12/07.
AA Phone & Save Bonus Savings 2	5.35	Includes 0.84% bonus for a year; only four withdrawals a year permitted.
Citibank Flexible Saver Issue 2	5.29	Includes a 0.56% bonus for six months. AER guaranteed to equal base rate for eighteen months. Card provide for cash-machine withdrawals.
Birmingham Midshires Internet Easy Access Issue 6	5.20	Includes 0.65% bonus for a year.

If you need instant access to your money via cash machines, then the Citibank account is the clear winner. Otherwise, if you're prepared to wait at least three working days to transfer money into and from your savings account via payments system BACS, then Icesave and ICICI will rock your world.

Here's hoping that this article helps you to dump your dogs and seize more stars!

More: Use the Fool to find great credit cards, current accounts, mortgages, personal loans and savings accounts!