Ask Andy #23: 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 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 this week with even more!

Watch the latest Q&A

Watch my answers to questions in the weekly Q&A on YouTube, including

• How do I avoid spending money on takeaways?
• When should I clear my credit card?
• How do Chip and Plum know how much money to take from my account?
• and much more.

Should I close my credit card?

Do you think the Barclaycard rewards card is better than the Natwest Reward card as an Amex back up. I mainly use my Amex for everything but need a back up.

I also have a Nationwide credit card that I opened in 2014 but don’t use as they stopped the cashback. Would it do any harm in closing it and opening a Barclaycard reward credit card.

Just didn’t know if my credit rating would be negatively impacted.

Andrew, via Instagram

Hey Andrew, yes, def on the Barclaycard. Since the benefit of the Natwest Reward credit card is the 1% at supermarkets, you can match that with the Amex Nectar.

In terms of closing the Nationwide account… it depends! Sometimes it’s a boost to close old accounts (less access to credit overall), other time it could hit your score (closing a longheld account).

If you have a decent credit score right now and there isn’t a major application coming up (eg mortgage) then you’d hope any dip (if there is one) has very limited impact❤️

Will switching away hurt my credit score?

Hi Andy,

I had a question about the new HSBC switching bonus. I’ve had a TSB current account since I was 16 (Now 23). It’s my oldest account and I’m looking to switch. I meet the criteria for the HSBC account but I’m concerned closing my account might affect my credit score? I do have a Monzo account but it’s not used much only for spending in other currency.

Is switching a good idea?

Charlotte, via Instagram

Hi Chantelle, so there is a chance that switching away from TSB will cause your score to drop as it sounds like the longest account you’ve had.

If you don’t use the Monzo account much then perhaps use that to switch for the free cash, and then use the HSBC account to switch for more free cash on future offers.

You could open up a Starling current account (no credit check here) when you do next decide to go abroad as that’s even better for overseas spending.

Where should I save my £20,000?

If you had say £20k sat in a bank isa not doing much how and where would you invest it ? I’m such a newbie and finding it a mindfield.

Enduro, via Instagram

Hey Enduro. So £20k in a cash ISA… If this was your only savings then I’d keep some of it in easy access cash. The rule of thumb is to hold three to six months of essential expenses like this in case of emergency. Here’s my guide to the best savings accounts.

Beyond that, and if you don’t need to access the money for at least five years, then you could look at investing. I’d play it safe here and go for an index fund, so you’re splitting your money across different companies.

Do I need another account?

I have a quick question. I’ve recently moved to UK (less than a year) and I plan stay here for a long time. Is it essential to open a bank account in one of the high street banks, such as Barclays? I’m currently using Monzo as my primary account, but I don’t know if it’s enough in order to try to buy a house in the future.

Rodolpho, via Instagram

So yes, I’d say it’s worth having a current account at a different bank – for a number of reasons.

First, if something goes wrong with your main account, you’re completely stuck. Second, there are some great extras you can get from extra accounts such as cashback on bills or free cinema tickets. There’s more here.

Also, in terms of Monzo, they actually only report to two of the three credit reference agencies. You can’t tell which one lenders will check, and they might think you don’t have a current account if they go to the one without Monzo. So I’d def get an extra account to combat this.

How do I cancel my Very credit account?

I want to cancel my very Credit account I made it by accident I want to cancel it how do I cancel it I need help to cancel.

Glasgow Rangers, via Instagram

Hi, it’s so easy for this to happen when using Very. It takes just seconds to have this credit approved but cancelling can be a pain.

You’d expect that you would be able to do this in your Very account, but it seems you have to either email [email protected] or call them.

Make sure you ask for confirmation in writing that it is closed, and check your credit report to see it has happened (it could take a few months to filter through).

Can I get a joint overdraft with Monzo or Starling?

Dear Andy

I have just discovered your you tube channel and am enjoying it a lot.

I would love to move my main bank to Monzo or starling but I have a joint account with First Direct and dip into our OD towards the end of the month which is helpful.

Monzo and starling don’t allow an overdraft on joint accounts. Do you think that this will change or is there a good way around it?

I also have a Smile account which does not connect to Plum or any other open banking. Any comments – apart from moving from Smile?

Thanks a lot

Nick

Nick, via email

Hi Nick. So glad you’re finding the content useful!

So, I’d say that if  you are dipping into that overdraft each month (I assume it’s not more than the £250 interest-free buffer) then I’d stick with First Direct. 

You could perhaps manage your finances a little differently, and use the First Direct account to fund a personal or joint Starling account. You can set alerts or use the app to make sure you’re not going to go below zero, and if that looks likely, transfer a little more over from FD

Sadly, re Plum and Smile… yes I think you’d be best changing the bank!

Hope this helps.
Andy

What is a good percentage for credit utilisation?

Hi Andy, as always love watching your videos, quick question, what should be the %average utilisation of credit on your credit limit, would it impact your credit score if you under use your credit card e.g. £3000 credit limit per month however spending just £400 on the credit card? Will this have a negative impact on my credit rating & score? Hope my question makes sense.

S.I.D, via YouTube

Hi SID. So there are a few numbers out there, but when I had someone from Experian on the podcast last year he said around 30% is a good figure to use as a baseline.

I think it’s a more important metric if you are trying to build your score up. If things are generally OK I don’t think it’s worth worrying too much about.

Yes if it’s significantly less or more it might have an impact, but you shouldn’t be spending money you don’t have just to increase this figure.

If you are particularly worried about it you could ask your credit card company to reduce your credit limit.

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.