5 tips to declutter finances with simple credit cards, mortgages, current accounts and loans

Simple credit cards, mortgages, loans and current accounts you can use to make managing your money easier.

If you’re looking to strip back and live a more streamlined and stress-free life this year, it's a good idea to look first at your finances.

Many of us are guilty of taking out more products than we actually need over time, wasting energy chasing best buys when there may be smarter alternatives and sticking to short-term deals that run out before we know it.

So here are a few tips on how to declutter your finances in 2016 and the best ‘simple’ products we’ve identified that can help you out.  

Combine deals in one credit card

It’s easy to become overrun with credit cards, especially when you require them for more than one thing.

For example, you might want to spread the cost of new purchases with an interest-free deal, but also shift existing credit card debt onto a better rate with a 0% balance transfer.

Going for the market-leading deals in each case can mean you end with a lot of plastic to manage, with different end dates for the introductory offers and caveats which can catch you out.

You can declutter your wallet and streamline your borrowing with a single all-rounder credit card that combines a variety of deals on things like 0% balance transfers and 0% purchases as well as rewards and cashback.

The Santander 123 Credit Card for example can replace your balance transfer and purchase deal as well as act as a cashback card. It offers 23 months of 0% interest on balance transfers (fee-free) and purchases, as well as up to 3% cashback on certain supermarket, department store and travel spends. You get all this for an annual fee of £24 (this is rising to £36 a year for those that apply after 11 January).

Admittedly no single deal on this three-in-one card is market leading, but they aren’t far off.

The best low fee balance transfer deal is the Halifax 23-Month Balance Transfer Credit Card, which is also fee free for 23 months, but the card itself doesn’t attract an annual fee. While the top deal for a 0% purchase credit card is the Post Office Money Matched Credit Card which offers 27 months of 0% interest, just four months more than Santander’s deal.

Finally the market-leading cashback offer comes from the American Express Platinum Cashback Everyday Credit Card which pays 5% for the first three months on spending up to £2,000 and up to 1.25% thereafter.

So the Santander 123 Credit Card is a decent option to help you perform a variety of tasks without the hassle of getting three separate deals and can replace pretty much all your cards in one go.

Compare more all-rounder credit card deals

Go for a longer fixed rate mortgage

When it comes to mortgages, two-year fixed rate deals tend to be the most popular and often the most competitively priced.

According to Moneyfacts the average two-year fixed rate mortgage charges 2.58% and there are 1,161 products on the market.

But by always going for a two-year deal, over a typical 25-year term, you would need to remortgage more than a dozen times to ensure you don’t end up on a provider’s standard variable rate (SVR) every time it comes to an end.

Not only is this a lot of admin and stress in trying to secure a new deal, it can cost thousands of pounds each time in fees.

With a longer lasting deal like a five- or ten-year fixed rate mortgage, you save yourself the hassle and cost of remortgaging plus lock into a rate you can afford for longer, giving your finances more stability.

The extra peace of mind does mean these deals tend to be more expensive. The average five-year fixed rate deal charges 3.27% and the average ten-year deal costs 3.63%. The other problem is that there are fewer deals to choose from. According to Moneyfacts there are 959 five-year fixed rate and just 80 ten-year fixed rate mortgages on the market.

However, if you are sick of switching every couple of years and are settled in your home, a longer-lasting fixed rate deal may be for you. Here are the top rates for a five- and ten-year fixed rate mortgage right now.

Compare longer lasting mortgage deals with loveMONEY

Use your current account as your savings account

Savings rates have been dismal for a while now thanks to a record low Base Rate. So chasing the best rate in easy access, fixed rate bonds and Cash ISAs has become essential to protect cash savings.

But there’s a smarter alternative. These days there are plenty of current accounts that can double up as a decent savings account paying better rates than the leading traditional deals.

The Nationwide FlexDirect account for example pays 5% interest on balances up to £2,500 for 12 months as long as you pay in £1,000 a month. Elsewhere the TSB Classic Plus account offers 5% interest on balances up to £2,000 with no minimum monthly payment required.

For larger balances there’s also the Santander 123 Current Account, which offers 1% on balance from £1,000, 2% on balances from £2,000 and 3% on balances from £3,000 to £20,000.

In contrast the market-leading easy access account from RCI Bank pays 1.65%, while the top easy access Cash ISA from the Post Office pays 1.51%. In fact, to beat some of the rates on these current accounts you’d need to lock your money in a fixed rate bond for five years or more.

Apart from the surprising top rates on offer, using a current account as your savings account will mean less admin to deal with and help you keep a close eye on your funds especially if it’s used as your main current account.

Compare interest rates on current accounts

Take out a new loan to consolidate all your old ones

If you’ve taken out a few different loans over the years, you might be better off consolidating them into one by taking out a new low rate deal.

Right now personal loan rates are at record lows, so you’ll probably be able to get a much better rate.

The M&S Bank Personal Loan for example charges 3.3% on borrowing between £7,500 and £15,000 over 12 to 84 months. That's the lowest rate ever! The monthly repayment on a £10,000 loan taken out over five years with this deal is just £180.80 a month.

If successful in getting a new loan, your finances will be instantly simplified when you use it to pay your other debts as you’ll only need to pay out one monthly payment instead of several and probably save a packet to boot.

Find a new personal loan today

Combine travel and breakdown cover in a packaged account

If you usually take out an annual insurance policy, breakdown cover and need gadget insurance you could consider a packaged account.

Packaged current accounts come with a range of perks in exchange for a monthly fee.

They won’t be for everyone, but as long as you think you will use all of the benefits on offer, they can be good value and save you the hassle of searching for and buying these policies separately.

One of the best value packaged accounts around is the Nationwide FlexPlus. It offers worldwide family travel insurance, worldwide mobile phone insurance, UK and European breakdown and recovery assistance as well as 3% credit interest on balances up to £2,500 for £10 a month.

It’s been estimated that the value of these perks is around £416 a year, which means the £120 fee can be worth it if you would have bought these policies separately anyway and means you don’t have to go scrambling around for paperwork and policy numbers when you need to make a claim.

Compare packaged current accounts

Get more tips to improve your finances:

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