How many current accounts should you have?

Jon_J

How many current accounts should you have?
Should you use cash and cheques only or should you use debit cards as well?
Should you withdraw a sum of cash at the beginning of the week to cover everything or should pay for food, petrol, etc by debit card and with draw say £20 for misc spends?

At the moment my salary is paid into one account and I transfer a sum of money to another account which my direct debits are taken from. My parents and grandparents think this is silly! They have always managed with one account per household - plus pay annually or quarterly in many cases to manage their cash flow better.

My two account system works in theory, but I'm always transfering from one to another and vice versa. I seem to get in a mess and go overdrawn and in debt!!

I have a budget spreadsheet, but I think I'm staring the obvious in the face!

What do you suggest? Should I keep two accounts or should I do it the old fashioned way?

cowbopper

I am like yourself, and operate 2 current accounts.
My salary goes into one, and i transfer enough money into the other to cover all the bills that are due to go out between now and next payday. Whatever i have in my main account is mine to spend as i please

"Should you use cash and cheques only or should you use debit cards as well?"

In my experience, your relationship improves with the bank if you use your debit card more (my ex was refused a bigger o/d on the grounds he took too much cash out)

Or you could be like my aunty, and have a jam jar for every expense and keep them in the meter cupboard.

nzseries1

Before I found about this website, I had one current account, one savings account, and one credit card, all with HSBC.

After being on this website a while, I now have 3 current accounts, 8 savings accounts and 3 credit cards!

I don't really see the need personally to have more than one current account (I changed to First Direct to get their £100 bonus then I changed to Alliance and Leicester for their 8.5% interest). But, I think if it helps you to have more than one account, then it's not going to hurt anyone.

cowbopper

I would be careful though.
Having too many current accounts may harm your credit rating as potential lenders see too many active accounts.

nzseries1

cowbopper wrote: »

I would be careful though.
Having too many current accounts may harm your credit rating as potential lenders see too many active accounts.

I guess this applies if you have overdrafts. But do you think, if I have three current accounts and none of them have overdrafts, does it matter then?

robpw2

i have two current accounts and a cashcard account . ii wouldnt have doene before fiding this site but they all offer me a little something different. Halifax a visa elctron usfule when buying at ryanair . a solo card for natwest for those everyday purchases and a visa debit from barclay for buying train tickets et

TrickyDicky

cowbopper wrote: »

I would be careful though.
Having too many current accounts may harm your credit rating as potential lenders see too many active accounts.

Your credit reports only show active credit and loans. They show nothing about any bank accounts with money in them, not even the fact that they exist.. So overdrafts will only show if you are currently using them.

Personally I dont see the need for more than 1. I will change when a better one comes along, but I transfer everything to the new one and close the old one. It helps in future because most banks will only let new customers have the best deals, and to be a new customer usually involves having no accounts with them for a given number of months previous.

YorkshireBoy

TrickyDicky wrote: »

They show nothing about any bank accounts with money in them, not even the fact that they exist.. So overdrafts will only show if you are currently using them.

That's incorrect, in my experience.

I have 6 current accounts showing on my credit report...and only two have an (unused) overdraft facility.

A&L
Nationwide
FD (O/D)
LTSB
Halifax
Yorkshire Bank (O/D)

nzseries1

TrickyDicky wrote: »

Your credit reports only show active credit and loans. They show nothing about any bank accounts with money in them, not even the fact that they exist.. So overdrafts will only show if you are currently using them.

Are you sure? My HSBC current account shows on my credit file and always has - it shows with an outstanding balance of £0. Does that mean I have an overdraft and I just don't know it?

YorkshireBoy

TrickyDicky wrote: »

...I transfer everything to the new one and close the old one. It helps in future...

Doing this will lower your 'score' with many credit providers, because 'time with bank' is one of their key stability indicators.

If you're swapping banks, I'd recommend leaving a long-held current account open.

Paul_Herring

Jon_J wrote: »

At the moment my salary is paid into one account and I transfer a sum of money to another account which my direct debits are taken from.

[...]

My two account system works in theory, but I'm always transfering from one to another and vice versa. I seem to get in a mess and go overdrawn and in debt!!

You might be doing it slightly the wrong way. The method I've used for the past couple of years, and have only been 'unauthorised' OD once. (My fault, and I didn't get penalised fortunately.)

I have 3 accounts (of concern here) that I use:

1) LTSB current account (6%) into which wages go, and direct debits and standing orders leave.
2) NW Current account (dunno, but average balance is too low to bother with,) from which I withdraw cash for going out etc.
3) A savings account (IceSave in this case, but I was lucky to open it and link the two above accounts to it - they only allow new customers only one linked account.)

I also use MS Money (2002) for budgeting.

By the time my wages go in at month end, I already know by that point the total of all SO and DD to come out of LTSB (rent, two CC's, regular savers etc.) Any excess is DD'd to IceSave at the beginning of the month.

Each Tuesday I SO a sum of money from IceSave to NW.

The only cash I spend day to day (papers, pub, busfares etc.) comes from my NW account. I try to withdraw the SO sum minus £10 once per week so the NW balance increases week on week for 'emergencies.' (Shopping goes on credit cards covered by DD's above.)