However, VAT is added on top and cashback doesn’t cover this. So you’re looking at paying around £14, though I know some people have said they’re based in the US or Guernsey to avoid this.
Bank switching deals are thin on the ground right now, and one will end soon!
You can get £50 from Metro Bank if you are referred by a friend (don’t worry I’ve got a link too).
The deadline to take advantage is the 18th December, but if you have an account and want to share it with friends you have to register for a link by tomorrow.
Though I’m avoiding Amazon I know many of you will be regular users, so this is a good way to get a free tenner.
The smart card Curve is giving customers £10 in rewards if they spend £100 at Amazon before Monday. That can be across a single or multiple transactions. It can even be a gift card or top-up if there’s nothing you need right now.
Plus if you’re new to Curve then there’s a code to get £5 when you sign up.
From security to crowd funding, I’ve taken a look at the pros and cons of the digital payment company in this review.
PayPal can be a handy way to pay. For a start you don’t need to have any cards on you for quick online payments.
For many the main reason for having one was to sell on eBay. But that’s changing, and by the end of 2021 all private sellers will be using a PayPal free system.
Plus, from 16th December 2020 you’ll be charged to have a PayPal account you aren’t using.
And with so many other advancements in the ways we pay, such as Apple Pay and Curve, do you still need PayPal?
I’ve taken a look at the good and the bad of PayPal in the video review below, or keep reading for the full article.
PayPal is essentially a digital wallet. You can connect your bank account and as many of your debit and credit cards as you want. You can also keep cash in there, either money that’s sent to you or money you withdraw from your bank.
There are two main PayPal accounts – personal and business – the focus here is on the personal accounts. This personal account is free – though as I explain below there is a new charge for inactive accounts.
Once you’ve got your PayPal account you’ll probably use it for one of three reasons:
You can use it to buy things
You’ll mainly see PayPal at the checkout for online shops. It’s the most common way to pay outside using your debit or credit card.
But you can also use it to pay out and about. Generally the retailer would produce a QR code for you to scan which then gives you the details to pay with from your PayPal app.
You can use it to send money
As long as who you want to pay has a PayPal account you can send them cash via your wallet. If they don’t have an account they’ll have to set one up.
This is obviously quicker and easier than typing in all their account details to your banking app – though services like Paym also get around it.
You can use it to request money
Asking for money works the same way. You just put the email address they use into PayPal and how much they owe you and send it across.
Pros of PayPal
You can use cards without sharing your card details
I think most people will have used PayPal because they had to (on sites such as eBay) or because you didn’t want to put your card details into a website.
The merchant will never see your connected card details when you use PayPal, so it’s a good way to pay when you’re not sure about the security of a website.
It’s a quick way to pay
It’s also pretty fast and convenient method of payment. If I’m at home on the sofa using my laptop there’s a good chance I won’t have my wallet with me. But a few clicks via PayPal and I’m able to pay and add my delivery details for a speedy checkout.
Using PayPal with an American Express card
This is a great work around for people wanting to earn cashback and rewards at retailers that don’t accept Amex credit cards but do take PayPal.
Very simply you pay with PayPayl and use your underlying Amex to fund the transaction. It’s a good fix, though do read some of the downsides of using any credit card on PayPal below.
You can crowdfund
I didn’t know about PayPal Money Pools until the other week.
It was my brother-in-law’s 40th during the lockdown so celebration plans were cancelled. Instead, my sister set about crowdfunding contributions from friends and family to help buy a special present. She used Money Pool and it worked great.
It’s free to set up, free to make contributions and free to make payments from! It could be handy for anything from wedding lists through to group holiday funds.
It’s launching a virtual card
So far virtual cards have been something you only see on Fintech banking apps – and often only with paid for accounts like Monzo Premium. well, PayPal is launching its own one – PayPal Key.
Essentially a virtual card is as it sounds. There’s just a long number, expiry date and three digit CSV. No plastic (or metal) to go in your wallet.
This has a few benefits. First, It means you can use your PayPal accounts even on sites which don’t have a PayPal button.
And it also provides an added level of security. You can generate a new virtual card whenever you want. So if your details are compromised, you can just create a new one to replace it.
At the moment it’s only in the USA, but hopefully we’ll see it here in the UK soon. This link should help you enrol when it is live.
PayPal has extra offers
From time to time you’ll see special deals to earn you a little back on your purchases. Most aren’t great, but it’s worth looking at from time to time as there can be some winners.
To find these you need to log in to your PayPal account and hit the offers tab.
These change regularly. At the time of writing there’s a £10 referral bonus offer if you invite new customers and £20 back on £90 of shopping at select retailers. You can find out more about the latest offers in my PayPal deals page.
The Cons of PayPal
You lose Section 75 Protection
Using PayPal with a credit card breaks the direct connection between you as the buyer and the retailer as the provider. You are instead paying PayPal who then pays the retailer.
This, in turn, means you lose Section 75 protection – a law that means credit card companies are equally liable with the the shop or business that’s sold you to you if something goes wrong, such as a delivery not arriving.
Section 75 only works for items or services costing more than £100, so if you have something you want to protect above that value, use a credit card instead.
Instead, you can claim via Chargeback or PayPal’s own Buyer Protection Promise. Neither are a legal consumer right to your money back.
If something you buy isn’t what you expected or doesn’t arrive you’ll be able to make a claim (in most cases) via PayPal Buyer Protection. You’ll be covered for the full purchase price and packaging.
PayPal is free for buying things and sending money, right? Well yes. As long as you use it. If your account is classed as inactive there’s a new £9 annual fee starting on the 16th December 2020.
Fortunately it’s easy to avoid this. The charge is only added to your account if:
You’ve not signed into your account for 12 months
You’ve not used your account for 12 months
So very simply you just need to put a note in your diary to log-in once every 12 months. Or if you’re not going to use it at all just close it down.
If you do forget the £12 will be deducted from the funds you have in your account not your connected card or bank account. And it won’t take more than the amount you have there. So if there’s just £8 in your PayPal account, you’ll only lose £8. So it makes sense to not leave any cash in there – just in case.
You’ll also get reminders 60 and 30 days before a charge is due.
Scammers love pretending to be from PayPal
One of the most common scam emails I get is from someone pretending to be from PayPal. No doubt that’ll increase on the back of the new dormancy fee.
These can look professional, so the best way to check if it’s a legit message from email is to look at the sender’s actual email. If it’s not “@ PayPal.com” then it’s not real. Here’s more on how to spot a fake email.
If scammers do get access to your account and use it without your authorisation you should be covered by PayPal’s protections.
But if you send them money, then your rights in terms of getting the money back are much reduced.
Watch out for businesses asking you to pay as “friend”
If you are selling something, either yourself or as a business, then PayPal takes a fee. You’ll have seen this if you’ve sold on eBay.
Sometimes if you’re using PayPal to buy from a brand they’ll ask you to send the money via the “Sending to a friend” option. This will save them fees, which they might promise to pass on to you.
But doing this instead of the “Paying for an item or a service” option will mean you lose the purchase protection. So if something goes wrong or it doesn’t arrive you’ve nowhere to go to get your money back.
It’s hard to use in-store
Though you can use PayPal in participating shops, it’s rare to see it accepted. And it’s not really any easier or quicker than just tapping your card to pay. But I doubt anyone would want to use this to replace paying with cards so it’s not much of an issue.
It encourages you to take out credit
It can be very easy to get credit from PayPal. Which can be dangerous.
Don’t get me wrong, it could be useful. 0% credit to spread out the cost of something expensive can make things you need more affordable. But it’s not all 0%. And even if it is, you need to make sure you can afford it.
But what I really don’t like is that it’s pushed at you when you checkout, and that’s about to get worse.
PayPal is trying to compete with the like of Klarna via a new service called Pay in 3. It works in the same way as the others, letting you split the cost of something across three payments with 0% interest.
I’m not a fan of this type of borrowing. There are moves to bring in regulations to cover Buy Now Pay Later lenders, but for now you need to be careful of using them too readily.
The currency conversion rate isn’t great
If you are someone who sends money internationally you can use PayPal. But my limited experience of this (when buying things in US dollars) has seen a worse exchange rate than I’d get elsewhere.
I’ve not looked into this enough to recommend the best alternative, but it’s worth checking the exchange rates and charges elsewhere to see if you can get a better deal.
Conclusion: Should you use PayPal?
Though the negatives listed above outweigh the positives in number, I still think PayPal is a decent option if you are aware of the risks.
It’s certainly not going to be the main way to pay, but I don’t think anyone would want it to be. It’s simply a choice you’ve got.
Just remember you do need to be extra careful with the scammers, so always check a PayPal email really is from PayPal. And make sure you log-in once a year to avoid that annual fee.
I recently asked listeners of the show as well as followers of my blog and social channels to share the questions they have about credit report and credit scores.
For this episode of the podcast I’ve put as many of them as I can to Experian’s James Jones.
Competition
To celebrate 200,000 downloads and 150 episodes I’m offering listeners a chance to win a one hour video chat with me to talk about your finances.
To enter you need to leave a review of the podcast on Apple Podcasts and send me a screengrab. Full details here.
From Saturday and running until Sunday 20th December American Express card holders can get £5 back when they spend £10 at participating small retailers. There’s a cap of £50 back per card. More on how it works in my guide.
Until the 6th Nectar cardholders who’ve connected their account to eBay can get 20% off. It’s at selected retailers, but includes Office, Currys and The Entertainer.
Though I’m avoiding Amazon I know many of you will be regular users, so this is a good way to get a free tenner.
The smart card Curve is giving customers £10 in rewards if they spend £100 at Amazon in the next fortnight. That can be across a single or multiple transactions. It can even be a gift card or top-up if there’s nothing you need right now.
Plus if you’re new to Curve then there’s a code to get £5 when you sign up.
Brew By Numbers is a decent craft beer company based out of Bermondsey and Groupon is offering 50% off its monthly beer subscription, making it £19. For a dozen beers, that’s decent value. But you can get it cheaper still!
You can stack this with a Groupon code offering up to 30% off. When I used it I was offered 15% off – you might get higher.
Remember it’s a subscription so you’ll need to cancel if you don’t want to pay full price in subsequent months.
Buy a real Xmas tree from Ikea for £29 and you’ll get a £20 voucher to use in January and February. As long as you’d normally spend £20 at Ikea that effectively makes it a £9 tree.
From 2nd December 2020 the interest rate drops from 1.5% to 0%.
For a good few years, the TSB Classic Plus current account has been one of my top picks for your savings. Though the days of 5% are in the distant past, it still offered 1.5% on totals up to £1,500 – far better than most other options in 2020.
This makes it a useless bank account. It’s probably one of if not the worst accounts to have when compared to the alternatives.
So what should you do? I’ll take you though my picks for your savings and for your banking.
Where to move your savings
If you had the full amount in your account, you’ll have £1,500 that no earns zero interest. But you could have more.
It was possible to have both a personal and joint Classic Plus, doubling your savings. And depending on when you opened your account you might have been eligible for two of each account. Between me and Becky, we’ve six accounts!
So here are a few options for you, no matter the size of the deposits. If you are eligible for all three you can put £7,500 in them per person.
If you’ve not had Nationwide’s FlexDirect current account you can get a 2% fix for 12 months on savings up to £1,500. Again, you can have a joint account in addition to a personal account. You don’t need to switch to get this rate, you can just open up a new account.
Virgin Money’s current account offers 2.02% on £1,000, though it is a variable rate and could change. Again, there’s no need to switch, though more in a moment on benefits if you do.
Beyond this you could look at the new Chip +1 account offering 1.25% on up to £5,000 – though you need a VIP code to access this. For new Chip customers, you can use BCLEVER21. Existing customers will need to refer a new customer. Here’s more in my review.
There’s hardly any point keeping the account once you’ve moved your savings out. And TSB’s replacement account – The Spend & Save – isn’t that special.
So it makes sense to switch. You’ve a few options here, and it depends largely on whether the Classic Plus is your main bank account or an extra one you used just for savings.
Keep reading or watch my recent round-up of the best UK bank accounts.
If it’s your main account
Let’s start with options if it’s your main account. I’d say there are a few important factors that take priority. Click the bold bank names below for my full reviews.
First, ease of use for online and app banking. I’d go with Monzo or Starling here, the top digital “challenger” banks. You don’t have branch access though, so bear that in mind.
Personally I’d rank how ethical the bank is just as high. Nationwide does very well here, though I have issues with the app. Alternatively consider Starling, Monzo or Co-op.
Beyond these options, I’d look at accounts offering regular rewards. Club Lloyds and Halifax Rewards are both decent for a freebie each month, while Santander 123 Lite will give cashback on your bills. The former two often offer switching bonuses (more on this is a second), so it might be best leaving these for later.
You can switch over from TSB to automatically move over your direct debits, standing orders and future payments into your account. More on how switching works here.
If it’s a spare account
Right, if you aren’t even using the Classic Plus from today then it’s perfect for switching. And then switching again. And again, until you’ve run out of switching offers.
At the time of writing there aren’t many options. Which makes it easier to choose a bank! Hopefully more offers will return in the new year, likely with cash incentives of £100 or more.
But for now, your choices are one of these two.
The biggest bonus is with Virgin Money. You can get £180 worth of wine (though I value it closer to £100). You’ll need to have two direct debits in your TSB before you switch, and when you open the Virgin account, you’ll need to put £1,000 in the linked saver (paying 0.5%). Once you’ve got the wine you can cancel the direct debits and move the wine. You’ll also get that 2.02% rate on £1,000 kept in the account, as mentioned above.
Your alternative for free cash is Metro. You’ll need to be referred by an existing customer, then once the account is open pay in £500 a month for two months and use your debit card 10 times in the same period. Do this and both you and your friend will get £50 each.
Whichever you go for you should be well placed to switch again for new offers in early February 2021.
A staggering 21 million people currently hold at least one Premium Bond, with the total fund approaching £100 billion! But with a recent cut to the prize rate, and therefore a smaller chance of winning, are they worth it? Or can they actually beat easy-access saving rates elsewhere?
To discuss all this I’m joined by my friend Helen Saxon, who also happens to be the Banking Editor for Money Saving Expert.
Competition
To celebrate 200,000 downloads and 150 episodes I’m offering listeners a chance to win a one hour video chat with me to talk about your finances.
To enter you need to leave a review of the podcast on Apple Podcasts and send me a screengrab. Full details here.
What you need to know about recent purchases, returns and gift cards.
It’s a sad week for the high street with news that brands such as Topshop, Dorothy Perkins and Debenhams could be about to disappear.
If all the stores close that’s 25,000 people who will lose their jobs – not to mention the impact it’ll have on suppliers and high streets. If you’re affected and worried about redundancy, check out this episode of my Cash Chats podcast.
The focus of this article is to help shoppers – whether you’ve recently spend cash there or are thinking of making a purchase in the coming days and weeks.
First though, here’s what is happening to both Debenhams and Arcadia.
* Update 2/12/20 – Bonmarche has also gone into administration. The same principles apply as with Debenhams and Arcadia, though I’ll add extra below if needed *
What’s happening with Arcadia group?
Arcadia is the retail empire set up by Phillip Green and contains big high street names such as Topshop. It’s fallen from it’s late 90s heights, and the decline was sped up by store closures during lockdowns this year.
Administrators have been appointed, which basically means external consultants have been brought in to run things and try to find a new buyer for the group. If that can’t happen, they’ll overseas the sale of stock and close things down.
At the moment online sales will continue and most shops will reopen on 3rd December when lockdown restrictions ease in England.
Arcadia brands:
Burton
Dorothy Perkins
Evans
Miss Selfridge
Outlet
Topshop
Topman
Wallis
What’s happening with Debenhams?
The department store brought in administrators back in April 2020, and had been negotiating a sale with JD Sports in the hope it could survive.
However, Arcadia brands make up a large part of the concessions in Debenhams stores. Without Arcadia, you have a lot of empty space in already struggling shops. So sadly, the sale has collapsed, and the administrators have moved ahead with liquidation.
Firms in administration don’t have to accept gift card payments. Essentially they owe you money, along with other creditors. If they choose to refuse payments you’ll enter a long list of other people owed money. Ifyou make a claim to the administrators you might eventually get a portion of that money back.
So it’s best to not let it get to that stage.
As the time of writing both Arcadia and Debenhams are saying they are accepting gift cards, but that could change at any time.
* UPDATE 2/12/20: Arcadia has experienced issues processing gift cards. When that is solved gift cards can only be used for 50% of your purchase. So they’ll retain their value, but say you have a £10 gift card, you’ll need to spend at least £20 to use it all *
And obviously, don’t buy any new gift cards for those brands.
If you’ve bought anything recently
Anything you have purchased from the retailer recently that you don’t want then return it straight away to get your money back or exchange it for something you do want.
Don’t accept anything other than a refund back to your card or in cash. Store credit is risky as you can only spend it while shops remain open.
It’s worth thinking too if you’ve bought any Christmas gifts from either retail chain. Is there a chance the person you give it to would need to change the size? If so you could return it and buy from somewhere else, or perhaps let them know early so they’ve a chance to try it on.
The same goes if you picked up a gift card to give to some one – either spend it now or give it early so they can spend it themselves.
If you’re waiting for an online delivery
Both retailers have said all existing online orders will be fulfilled. Of course, if it’s not yet been dispatched you could see if it’s possible to cancel the order.
If you buy anything new
The websites are all still taking orders and the plan is for shops to reopen this week.
You could argue that any money spent in the stores could help keep them going – but I don’t think it’ll make much difference at this stage especially with Debenhams.
Still, if the thing you want is being sold from these shops at a price you like, it’s not necessarily a reason not to buy. However, you need to think carefully, and be sure that it’s exactly what you want.
Though returns are permitted right now, that could change. And if the shops close for good, you won’t be definitely won’t be able to return your purchases.
In many ways it makes sense to shop in actual stores rather than order online. Not only do you have it in your hands, reducing the chance for online orders to not get sent out, but you get to inspect it properly or try it on before purchase.
However, this isn’t a normal year. When shops do reopen on the high street I’d imagine there could be a lot of people heading to these shops to do the things I’ve listed above.
So if you do decide you’d rather shop online, just be aware of the risks.
Finally, if it’s something expense, a kitchen appliance from Debenhams for example, then pay with a credit card as then the credit card provider is equally liable if there’s something wrong with your purchase. This only works for individual items costing more than £100, not the total spend.
If it’s less than £100 and things go wrong with your orders you could try chargeback via your bank, though that’s not a legal requirement for your bank.
Here’s my monthly update on the best current accounts in the UK.
In this December 2020 edition, I talk about a new switching offer from Virgin Money that’ll give you free wine and a referral scheme from Metro bank.
I also recommend alternatives to the TSB Classic Plus account, especially for savings, and my picks of the best accounts for overdrafts, rewards, cashback, ethic and budgeting.
