A new way to save money on the internet

Some firms not only want your custom - they let you decide just what you should be getting for your money...

The last four weeks have seen a lot of calls for us all to play a part in the running of the nation, with the Conservatives’ ‘Big Society’ idea. And while David Cameron et al would like to see us play a hands-on role in the running of our schools, police force and hospitals, it’s a model that is already used in some areas of the financial world.

At the risk of sounding like Citizen Smith, here are three firms that embody the ‘Power to the People’ message.

#1 giffgaff

I love surfing the net on my mobile, but I am always a bit paranoid about it. Not because of security issues or anything like that, but because the ‘unlimited’ access that I shell out extra for each month isn’t actually unlimited!

There is a ‘fair usage policy’. Basically I can surf the net on my phone to my heart’s content up to a certain limit – which is never outlined explicitly – but if I surpass it I risk being charged. Sneaky.

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However, one mobile network is a bit different in this respect, and it’s all down to their customers. giffgaff is a mobile network that employs a community outlook – if you have any issues with your connection, then you can get help from fellow users on the firm’s website, who have the opportunity to earn cash by helping.

The users also played a part in the design of giffgaff’s ‘goodybags’ – tariff bundles you can buy which look like incredible value to me. So for example, a £5 goodybag will get you free text messages for a month, while a £10 goodybag will also boast unlimited internet use as well as 100 free minutes, in addition to the texts.

And they really do mean unlimited - a big part of the feedback giffgaff received from its users while it was designing the goodybags regarded that precise point - which is why they have made it clear there will be no fair usage policy.

Because giffgaff is completely community oriented, they encourage further user suggestions on how to improve the service, and reckon they are currently implementing (or planning to implement) 25% of the ideas they receive. It's a brilliant service, and once my contract ends I'll definitely be giving them a try.

#2 Zopa

Let’s face it, the last few years have been a bit of a write-off for savers. The interest you can earn on all those pennies you’ve put aside has been utterly pitiful. However, there is an alternative way to get a far better return on that money you’ve put aside – become a lender yourself!

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Zopa is a very nifty little site which allows us to lend thousands of pounds to each other, neatly sidestepping the banks.

If you have some spare cash that you fancy making some money out of, you can go to Zopa and specify how much you would like to lend, over what period, at what interest rate, and to what standard of borrower.

Whenever a potential borrower signs up to Zopa, they are credit checked, so you can be sure that your money will only go to the exact sort of borrower you want it to. Unsurprisingly, you tend to get a higher rate of interest if you lend to those borrowers who are not quite the best of the best.

Your money is further protected as it will not be lent in whole chunks to a single borrower. So for example, if you lend £500, it will be spread between at least 50 different borrowers.

Obviously there will be a fee involved - Zopa charges lenders a 1% annual servicing fee, while borrowers must stump up a £124.50 transaction fee.

So what sort of return can you expect on that cash? According to Zopa, lenders last year made an average return of 8.1% (before bad debt) which is far higher than you can expect elsewhere. It’s clearly a pretty popular way of making some cash too – at the time of writing a whopping £1,249,900 was available to borrowers on the Zopa markets!

#3 Groupola/My City Deal

I’ve grouped these two together because they essentially do the same thing, though Groupola and My City Deal are actually two separate sites. However I reckon it’s well worth signing up to both – I have!

Both sites operate on a simple premise – group buying power is better than buying on your own.

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So each day the sites will have a specific discount offer for your city. For example, on the day of writing, Groupola users in London could benefit from half price tickets to the Golf LIVE show at the O2, while on My City Deal there was 60% off a meal at a Brazilian restaurant in Pimlico.

If you want to take advantage of the deal you then go through the purchasing process. This is where the community aspect comes in. The discount on offer is only actually available if a certain number of people sign up to the deal.

So if you really want to take advantage of the deal, it’s up to you to spread the message to your friends and family (social networking sites like Facebook and Twitter are obviously pretty useful in this respect).

If enough people sign up to the deal, only then will the cash leave your account and you’ll all be enjoying your collective bargain. If not enough people sign up, then sadly you miss your chance at the deal, but your money stays in your account.

I love the concept and will definitely be giving it a go. In fact, if you are particularly active on My City Deal you can even MAKE money out of it! Get a friend to buy a My City Deal voucher and you’ll receive £6 in credit, while you can even earn cashback on deals that go through if you go to the site via Quidco!

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