Are you in the habit of dismissing your post? Here's why you need to get out of that habit... now!
When you get home from work and find a pile of post sitting on your doormat, do you pick it up immediately and start ripping into each envelope, desperate to see what’s inside? Or do you simply dump it all on the table/in a drawer and tell yourself you’ll look at it some other time, knowing full well you’ll forget all about it?
If the latter scenario sounds more like you, you’re certainly not alone. In fact, according to research from MyVoucherCodes.co.uk, half of Britons ignore letters from their bank, with 62% claiming they think the post is from the sales department.
However, if you’re one of the many who don’t open their post, you could be putting your finances in danger. Here, I’m going to show you why.
Interest rate changes
Many of us (including me) are quick to moan that banks are terrible at keeping us informed when interest rates change on our savings accounts. However, some lenders will personally notify you by post or email to inform you of any interest rate changes on your savings account. And that means if you are interested in your interest, you really should be opening your post.
After all, if you want to keep on top of things and keep earning a competitive rate of interest, there’s no point tossing your post in the bin when it could be informing you that the rate on your savings account is about to plummet.
And of course, it’s not just savings accounts. Credit card interest rates can easily change, and how will you know if you’ve stashed your post under a pile of other ‘junk’?
For example, if you have a 0% balance transfer credit card or a 0% on new purchases credit card and you’ve forgotten when the interest-free period comes to an end, reading your post is going to help you remember! If you simply don’t bother, you’ll miss any warning letters that that 0% period is coming to an end, and you could suddenly be paying an interest rate of around 16% without even realising.
Fiendish fees
If you don’t open your bank statements, you’re not going to know what situation your finances are in. And that means you’re less likely to know if you’ve got enough money in the bank to cover that cheque you need to pay, or those monthly direct debits.
If you don’t have sufficient funds in your account, your bank could charge you an unpaid item fee - or fees. And if you don't open your post, you're not going to know about these fees. What's more, if you don’t know you’re being charged and this pushes you into an unarranged overdraft, you could end up forking out a significant amount more.
Research from MyVoucherCodes.co.uk revealed that 19% of people said they had missed charges through not opening bank correspondence, with 4% saying this had cost them more than £100 in total.
Of course, if you do have a habit of slipping into the red, shoving that piece of correspondence in the drawer means you're less likely to know if your bank decides to increase its overdraft rates and/or charges, or if your bank decides to lower the size of your overdraft.
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New benefits
As I said earlier, some lenders will drop you a line to inform you of any changes to your account. However, this doesn’t always have to be bad news.
Customers who have the Nationwide FlexAccount, for example, have just been informed that they will now receive free European multi-trip travel cover, worth up to £80 a year. For some customers, this could be a really handy benefit. But if you’ve tossed your post to one side, how will you know about it?
That said, for any added benefits such as this, it’s always a good idea to read the terms and conditions carefully. For something like travel insurance, it’s important to ensure you will be fully covered for everything you need to be covered for - if you’re going skiing, check you’ve got winter sports cover, for example. If not, make sure you shop around carefully for a travel insurance policy that will cover you.
Mistakes
These days, fraud is a big worry for many of us. However, by keeping a close eye on your bank statements, it’s easy to spot any dodgy transactions. So if you’re still receiving statements in the post, make sure you don’t ignore them. Check them carefully for any suspicious-looking transactions, and if you spot anything you don’t remember paying for, inform your bank immediately.
Of course, you can also easily do this online with lovemoney.com’s very own online banking service! This tool allows you to manage your money by keeping all your bank accounts and credit cards in one place, so you can keep track of your income and expenditure easily. So it's a great way to keep an eye on all of your transactions.
However, it’s not just bank statements that can contain errors. If you receive your mobile phone bill, credit card bill, gas and electricity bill, or broadband bill in the post, check them all thoroughly. It’s not just fraudulent activity you need to watch out for - companies have been known to make the odd mistake here and there and charge you for something you shouldn’t be paying for.
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So make sure you check carefully and inform that particular company if you spot anything you’re not happy with.
In a similar vein, you should also check whether your gas and electricity bill is an estimated reading or actual reading. If it’s an estimated reading, take a reading of the meter yourself and phone your supplier to correct it. After all, you don’t want to be paying more than you have to, do you?
Automatic renewal
If you’re paying for anything by direct debit, watch out for automatic renewal policies. Some insurers operate such policies - although here at lovemoney.com, we really don’t advise that you pay for your insurance by monthly direct debit as you’ll end up paying more.
However, if you’ve paid for your insurance on an annual direct debit, or you have an annual magazine subscription, or you’ve become a member of an organisation such as the National Trust and paid by annual direct debit, you really need to be aware of this.
Most of these firms will automatically renew your subscription or insurance policy the following year unless you tell them otherwise.
This means that if you’ve not checked your post for a while, you may not have realised that your subscription/insurance is even up for renewal. As a result, you could end up forking out for something you no longer want or need.
Or, in the case of insurance, you might end up paying far more for your renewal quote than you would have done if you’d simply told the company you didn’t want to renew and shopped around for a better quote elsewhere.
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Debt problems
Finally, the My Voucher Codes survey also revealed that of the quarter of people who said they left bank statements unopened, 42% feared what they would find and admitted they would rather not know the state their finances were in.
If you’re one of these people, please don’t ignore your post. It won’t make the problem go away. If you're really worried about how much debt you’ve racked up and you can’t see any way out, contact a free independent debt advisory service such as Citizens Advice, National Debtline, the Consumer Credit Counselling Service, Payplan and Advice UK. These charities will be able to provide guidance on a range of options to help you sort out your debt problems, and you won't have to pay anything for this advice.
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