Get revenge on your bank

Use your current account to your advantage and you will gain access to the best deals on the market.

One of the reasons I love working for lovemoney.com is that I get to analyse and expose the tricks that banks use to manipulate their customers - so that you don’t fall for them.

The latest trick banks are using to lure in new customers is to make their best deals exclusively available to certain types of customers.

Not new customers. Not existing customers. They’re more subtle than that nowadays. This time, it’s all about their current account customers - both new and existing.

It’s a clever strategy

While most of us are keen to get the best savings account or apply for a new mortgage if it saves us money, the thought of switching your current account may send chills down your spine.

The hassle of telling your employer your new payroll details, getting new bank cards and pin numbers, locating your new local branch, signing up for online banking, switching over all your direct debits and setting up new standing orders – not to mention the potential cash flow and credit problems that can incur if any of the switching process goes wrong – well, it probably just doesn’t seem worth it.

Indeed, current accounts are the number one financial product that we most hate to switch. According to research by both Age Concern and Santander, you are actually more likely to divorce your spouse than you are to divorce your bank. How sad is that?

You can see why it makes sense for the banks to focus so heavily on bringing in new current account customers – and retaining their existing ones. After all, once you’ve got your current account with a bank, that bank is likely to be your first port of call for a mortgage, a savings account or a credit card.

Plus, they know you, so they can offer you pre-approved credit and shove all sorts of rubbish products in your face by slotting their marketing literature in with your bank statements. For many people, it’s easier and simpler to take what’s offered on a plate than to go out looking for the very best deal.

The banks like this. They know that if they succeed in prying you away from your existing current account provider, they will make thousands and thousands of pounds off you during your lifetime as a customer.

Get revenge

Personally I think it's time all of us consumers fought back. That's why I'm calling on all of you to take revenge on your bank by switching accountsto get the best deal – but at the same time, you should always remember that your new bank is not your friend. It does not deserve your loyalty.

When you want a new savings account or a new mortgage, shop around as you always would to find the most competitive deal from the whole of the market.

That way, you can get access to the best deals available, without getting caught in the banks' sneaky traps. Take that, you greedy bankers!

The top deals

OK, so what exactly are the top deals? And which current account do you need to open them? Do you actually have to switch your main current account, or can you just open the account and not use it? And most importantly of all, what are the nasty catches the banks use to try to stop you from the playing the system?

Here’s everything you need to know!

Top mortgage

At the moment, First Direct is offering some of the best variable rate mortgages on the market: lifetime trackers with no early repayment charges (ERCs) if you want to switch at any time.

The low fees and the fact that there aren’t any ERCs means that if the base rate starts to rise, you can switch your mortgage immediately from the First Direct deal into a safe fixed rate without paying through the nose for the privilege. But while the base rate is low, you benefit from the low tracker rate.

So what’s the catch? You need to open First Direct’s market-leading current account, the 1st account, in order to access these deals because the mortgage must be paid by direct debit from this account.

The icing on the cake is that First Direct will actually give you £100 cashback if you deposit £1,500 into the the 1st account each month – and the lender’s reputation for customer service is second to none.

Top instant access savings account

The top instant access savings account at the moment is actually a current account. The Lloyds TSB Vantage account, to be specific. It pays 4% on savings between £5,000 and £7,000.

The catch is that you need to deposit £1,000 a month into the account, but because it is a current account, you have instant access to your cash. So you could set up a standing order to put £1,000 in and out again each month.

Or – here’s a novel idea – use the account as it is intended (i.e as a current account) and keep your savings in there as well!

Top credit card for spending abroad

The top credit card for spending abroad at the moment is the Halifax Clarity card. It doesn’t charge any foreign transaction fees, so it’s free to use anywhere in the world. Unfortunately, the Nationwide Flex Account – previously a favourite of travellers – will be introducing charges for non-UK transactions from November, making the Halifax card doubly attractive.

What’s more, Halifax will pay you £5 a month as long as you spend £300 over the course of that month. That’s £60 a year!

So what’s the catch? You need to open or have a Halifax Reward Current account to get the card. This account will pay you another £5 a month each month that you pay in £1,000 – again you could set up a standing order to send the money straight out again.

Your credit rating

Some lovemoney.com readers have told us they are concerned that switching their current account frequently will affect their credit rating. So we asked credit reference agency, Experian whether opening multiple current accounts or switching accounts repeatedly could force your score down. They said any impact is likely to be very minor and is no real reason why you shouldn't switch or transfer your money between a range of current accounts to make the most of your savings or get the best deal available. 

What do you think?

Is it worth switching current accounts to get access to these deals? Have any of you actually done it and how have you found the switching process? Do you think it’s right that banks offer better deals to their current account customers? Let us know using the comments box below!