Ask Andy #17: Your money questions answered

My regular round-up of your personal finance questions.

I love hearing from you, whether it’s on the blog, social media, YouTube or on email. Often you’re asking me questions about your finances, and I’m always glad to help if I have the time.

But I realised that my answers could also be useful to other followers. So I’ll be putting my responses to the best questions into regular articles here on the blog.

Keep reading for some of the questions I’ve been asked, plus the video live from last week with even more!

Watch the latest Q&A

Watch my answers to questions in the weekly Q&A on YouTube, including chat about Amex reward points, savings account books and the best place to save £100,000 for 18 months.

What do I do with £10k in savings?

Big fan of the content you release, and always grateful for the tips provided. Just wanted your opinion on my financial position. I’ve currently got a Santander Everyday Saver account, but the interest rate is a horrendous 0.01%. There is only around 10k+ saved, but I feel it could be at better use elsewhere.

Having watched your videos and checking your blog for the past few months, it looks like there are a handful of accounts available. Although, I’m unsure if they would be beneficial to my situation.

The accounts I’ve noticed in particular, are the 5 which offer a 1% fixed rate. However, out of the 4 on your blog, it seems a current account needs to be in place before moving to savings. The Nationwide ‘Start to Save’ is the standout, and looks easier to join but, the website mentions it is not designed for savers looking to put more than £100 month.At the moment I’m currently putting away £700-£1100 a month, and would be happy to have this at a set figure going forward.

Finally, you mentioned Chip+1 and Premium Bonds in your videos. Do you feel this is a better suited option?

I understand this is a pretty heavy message! But any help would be appreciated.

 LJ via email

Hi LJ,
So there are a few options here. You can certainly beat the 0.01%!

A lot depends on if and when you need to access the money. If you can lock it away for a year you can get a fixed rate of 1%(ish) from a few places. But you can’t take the money out if you need it or if rates increase elsewhere.

The Chip+1 isn’t a bad shout, but you need to factor in the monthly fee if you want to earn interest above £2,000. If you put the full £10,000 you’d get a rate closer to 1.06% (variable), and that drops the less you have in there. You also won’t earn interest on the interest. But it’s hard to beat this and you can take the money out when you want. My review has more information.

Or you could consider Premium Bonds. There’s no guarantee you’ll win anything, but with average luck and £10k saved you’d get prizes which are the equivalent to a rate of 0.75%. So probably less than with Chip, but you never know – it could be more!

The regular / monthly savers are as you say mostly linked to current accounts, but there are some which aren’t. You can get 1.05% (variable) with Coventry and 1% fixed with Principality which would allow you to save £750 a month. I’m assuming this is new income rather than moving money from that initial £10k? 

If you’re willing to open a few new accounts, the best way (right now) to maximise the interest is to open more than one Virgin Money M Plus Current Account which offer 2.02% on the first £1,000 saved.

Can I pay rent with a credit card?

 wonder if you can aswer my dilemma. So i just got approved for my first ever credit card and intend to use it as a Debit card for my everyday spending and bills. Can I use it (BA Amex Card) to pay rent to my landlord (his bank account) and pay it off along the rest of the statement.

In short, can I set a direct debit to someone else’s bank acc from my credit card? I’m trying to collect all avios points that I can. Thanks in advance. 

Thatgirl, via Instagram

Hi! So sadly you won’t be able to use it for rent. Some other bills might let you pay by a card rather than direct debit, and in that case you should be able to use the credit card – but do check. And sometimes there’s an extra charge if you don’t pay by direct debit!❤️

Which credit card should I get for university?

Andy,

I want to get a credit card because I will need one for student loan because I’m entering university this September. I was also told by summer job that I need to open my own bank account. 

I do have a credit card but it’s under my dad’s name. It’s a junior card. Personally, I’ve been finding it easier to use a card instead of carrying wads of money. Which is another reason why I want to apply for a credit card.

I’ve been looking into student cards and I keep seeing p.a. and APR. I looked it up online and I’m still confused with what it is. I really hope you can help me because my parents aren’t good at explaining it to me.

Thank you so much for taking time to read my email

Franchesca via email

So I don’t think a credit card is going to be the best option for you to help pay for university. As well as the student loan, student bank accounts come with interest-free overdrafts for while you’re studying. These will be far cheaper ways to borrow money than using a credit card.

If these aren’t enough then you could consider a credit card – but only after booking at bursaries and grants.

With the bank account, you can have more than one of these, so you could open up a normal one now and wait until August/September to get a student one (with the overdraft and sometimes freebies like rail cards).

Something like Monzo could be really good. You open via an app and it has all sorts of features to help you track your spending and save. Here’s my review 

Does First Direct’s switching offer require a salary payment?

Hi Andy,

First direct switch – 1000 pay in, does this need to be paid externally (salary) or can it be a transfer from another personal current account?

Usmann, via YouTube

Hi Usmann, yes it can come from another current account, and it doesn’t need to come in one go either. You can break it into smaller payments if you want.

Here’s more on the switching requirements.

Is the BA Amex good for Nectar points?

What do you think of the British Airways Amex card? It lets you collect avios, but those then can be converted into nectar points at 250 avios to 400 nectar points. Is this a faster way to collect nectar points?

Marri, via YouTube

So you get 1 Avios per £1 spent with the BA Amex. This (once you’ve got 250) will convert to the equivalent of 1.6 Nectar points per £1.

But the Nectar Amex gives 2 points per £1, so it’ll earn you more points (IF your ambition is to collect Nectar points). There is the £25 fee with the Nectar Amex is year 2, so you might need to factor that in to your annual spend to see which would work out best.

What’s the best joint business account?

Me and my brother are starting an Airbnb we need a join account what’s the best bank we should go with?

Bos, via YouTube

If it’s all digital and you don’t need access to a bank I’d recommend going with Starling or Monzo. And if you’re not a limited company you can just open up the personal accounts which are much easier to sort. Here’s more on business accounts.

Do I always need to make a minimum repayment?

Hi this is probably a stupid question but say if I don’t use my credit card one month will I still have to pay the monthly min payment say £5?

Jessica, via YouTube

Hi Jessica. There are no stupid questions! The minimum repayment is just on the amount you owe. So if the balance is zero, then there’s nothing to pay and no minimum payment.

But if you owe from previous months, say £100, then you will have to pay to avoid penalty charges. It’s best to clear the card completely every month to avoid any interest or risk of these fees.

How to ask me questions

The best ways to get in touch is in the Andy Clever Cash Facebook community

Just post your question any time, or ask me live in my weekly Q&A each Wednesday (which is on Instagram and YouTube).

You can also comment on individual blogposts and videos or ask me questions via these channels:

• Twitter @AndyCleverCash
• Instagram @AndyCleverCash
• Email Andy[at]BeCleverWithYourCash.com

I can’t promise I’ll be able to answer all questions but I’ll do my best.