Chase Your Money Worries Away

If you hate shopping around for the best rates, this will show you to avoid it - and still get a good deal!

This article was first sent to Fools as an email in our Summer Lolly campaign. 

Here at The Fool, we're always banging on about how you need to shop around for the best deal.

But what if the very phrase "shopping around" sends chills down your spine? What if you'd rather clean a toilet than compare the market? What if bargain-hunting for financial products ranks top of your list of ‘Boring, Boring, Boring Things To Do This Summer'?

Never fear! Despite the fact that, here at The Motley Fool HQ, we enjoy nothing better than constantly hunting down the best of the best buys - I can understand the desire of many Fools simply to pick a product and stick with it.

After all, market-leading rates are often only market-leading long enough to hook you in. Once you've got through all the hassle of changing providers, the rate drops and you have to do it all over again.

There is a lot to be said for accounts and deals which provide long-term value and consistency. They may not always be at the top of the best buy tables, but they can prove better buys overall.

So here's my pick of the deals that reward loyalty over the long-term. Then you need never worry about shopping around for a best buy ever again. (Or at least, not for a long, long time.)

Mortgages

Sometimes, working for The Fool, I can feel my work-life balance slipping. For example, when I find myself discussing mortgage deals in the pub with mates. (Well, I call them ‘mates': they say they are more like random people who deign to be seen in public with me.)

Me: "Why did you opt for a long-term fixed rate, then?"

Him, sipping his lager: "Donna, this may come as a shock, but I find mortgages boring. I never want to wake up in the morning, hear the base rate has changed and care at all. It's as simple as that."

If this is the kind of life/mortgage deal you want, then I'd recommend you look for a five-year fixed rate, or even longer if you are sure you can handle the commitment. You could not only save yourself a fair amount of hassle and anxiety over the years, you could save thousands in remortgaging fees, too. (For more about the pros and cons of long-term fixed rates, listen to this podcast.)

At the moment, my favourite long-term mortgage deal is a 10-year 6.29% fixed rate from Bradford & Bingley, which allows you to remortgage at any time after five years without incurring any penalties. So effectively, it offers the flexibility of a five-year deal with the security and consistency of a 10-year deal. Brilliant!

Savings

At the height of the ISA season in April, I took out a Cash ISA from Barclays. At that time, the rate was a market-beating 6.5%, storming all the Best Buy tables. But a month later, the rate had dropped to 6.25%. 

This sort of behaviour by savings providers gets right up my nose. But let's not dwell on them any longer. Let's take a look at their nemesis: providers who consistently offer good rates over long periods.

Source: Moneyfacts

Of course, past performance is not necessarily an indicator of future performance. If you really want a savings account that is competitive over the long-term, you need to look for a guarantee, preferably one that is linked to the Bank of England Base Rate.

Again, Bradford & Bingley has my vote in this category: a savings account which is guaranteed to beat the Base Rate by 0.25% for the life of the account - so currently 5.25%. (You can find out more details about this account here.)

Credit Cards

If you have credit card debt, the cheapest way to pay it off is to transfer it to a 0% balance transfer card. These cards do not charge you any interest for a set period, usually a year, enabling you to pay off your debt quicker. The best 0% balance transfer card at the moment is the Capital One Platinum Card, which offers 0% on both new purchases and balance transfers until 1st September 2009.

However, after this date, the rate will jump up to 12.9%. So, if you still have outstanding debt, you will need to shop around for another 0% balance transfer card to avoid paying interest - which can involve a lot of hassle and will usually mean paying a 3% balance transfer fee.

An alternative to a 0% balance transfer card is a lifetime balance transfer card. These cards charge you a very low, fixed rate of interest for the life of the balance i.e. until you have paid off your debt. So there is no need to shop around for a new card after a year or so.

Which is the best lifetime balance transfer card at the moment? Depending on how much debt you have, you will either be better off with the Platinum Plus Rate For Life at 4.9%, with a 2% transfer fee, or the Platinum Plus Rate For Life at 5.9%, with no fee whatsoever.

Insurance

The exception to the rule, I think, is insurance. Never, never, never renew your insurance policy - be it home, car, or anything else - without comparing the market. Insurers are notorious for hiking up your premiums if you don't force them to offer a competitive quote (as this article demonstrates).

Cannot face the idea of shopping around, even once a year, for insurance? If so, you might want to consider switching your home insurance over to Halifax. Loyal customers who take out a new buildings and contents insurance policy will receive £50 cashback immediately for choosing Halifax, and £50 again every year when they renew. It still might not prove the cheapest policy (although Halifax claims it will save the average customer £277 over three years), but at least your loyalty/apathy will be rewarded, instead of exploited.

Finally, if you do find yourself with a dud deal or a substandard savings account, don't just put up and shut up. If you move just once more, looking for long-term value in the way I've outlined above, you will hopefully find you won't need to move again for a long, long time.

Now, wouldn't that be nice?

Compare all sorts of financial products at lovemoney.com