Halloween is nearly upon us again – and when it comes to money, there are some horrors definitely worth avoiding.
Keen to avoid any financial frights? Here are some financial nightmares to keep an eye out for this autumn and beyond…
1. Paying more interest than you need to on debts
Several current accounts charge around 40% in annual interest for going overdrawn, so sitting in your overdraft for long periods can be very expensive.
While borrowing costs are generally on the increase as interest rates rise, it may be cost-effective to move some existing debts onto a 0% balance transfer card.
MoneySavingExpert.com has an eligibility calculator that enables people to see how likely it is they may be accepted without it affecting their credit score.
2. Leaving money sitting in poor-paying savings accounts at a time when rates are improving
Cash savings rates have been on the rise in recent weeks. While rates may not be high enough to beat inflation, they may at least offset some of the impacts.
Rachel Springall, a finance expert at Moneyfacts.co.uk, says: “Savers will find some attractive rates to choose from right now, the majority of which come from challenger banks and building societies.”
She adds that savers should be proactive in chasing down a better deal – “especially if they have seen little benefit from the back-to-back base rate rises,” notes Springall. “Some deals may not last very long if they are in high demand, so speed is essential.”
At a time when interest rates are rising, splitting cash between accounts where money is locked in for a set period, as well as accounts with more flexibility around withdrawals, could be helpful. This way, savers can potentially benefit from both higher interest rates and be able to get their hands on some cash when they need it, Springall suggests.
3. Overstretching yourself with buy now pay later (BNPL) schemes
BNPL schemes can be a handy way for some people to spread the costs on purchases, without paying interest – but there could be a danger of becoming over-stretched. It may be tempting to buy more items than you would have done otherwise, meaning debts quickly pile up.
If you’ve got several items sitting in your online basket, it may be worth taking a bit of extra time to consider whether they’re all really worth it.
4. Allowing money to ‘leak’ from your bank account with long-forgotten subscriptions
It’s so easy to sign up to a subscription or free trial period, only to stop using them and forget they’re there – and end up leaking money on nothing.
So, sifting through your bank statements or checking your banking app to weed out and cancel any subscriptions you no longer use could be time well spent.
5. Not claiming support that you’re entitled to
The website gov.uk/cost-of-living has information on a range of benefits and support that are available, while ofgem.gov.uk has information about getting help with your energy bills – search for their ‘getting help if you can’t afford your energy bills’ page.
Ofcom also has information on dealing with your phone provider if you’re unable to pay a bill. Visit ofcom.org.uk and search for ‘unable to pay a bill?’.
