Considering Switching Banks...

MSM78

Hello All,

Currently mine and wife's banking is a little scattered and I'm considering moving us, most likely to First Direct, as the customer service gets good reviews and the incentive to switch is also attractive.

When we got married my wife banked with Lloyds and I banked with Natwest. She decided to move over to Natwest as well, however, this did not go smoothly, and after various issues at Natwest, we took it as a sign of things to come and both moved to Nationwide each opening a single account together with a joint account which we've had for about five years now. Still with me? Great. When we moved to Nationwide we used their switching service but I was weary of having our wages automatically transferred from our employers, and after never getting around to sorting this, both our original Natwest and Lloyd accounts remain. On top of this my wife's original Lloyds account is now TSB account after they splintered off.

So, at this time we have various current accounts open with Natwest and TSB, which our wages are paid into, and Nationwide accounts where our direct debits go out, as well as e-saving accounts open with Natwest and Nationwide. A bit of a mess.

So what am I asking?

Firstly, I doubt the online switching service is going to accommodate for switching from more than one bank? In terms of myself, wages from Natwest and DD's from Nationwide?

Secondly, if we both move to First Direct I'm assuming the switch incentive would only apply to the opening of the single accounts and not the third joint account?

Thirdly, I'll be mortgage shopping in July as our current product comes to an end. Should I wait until after this to avoid lot's of activity on the old credit file? If we move now and close all the other accounts the obligatory 'time with current bank' question is going to be only months.

Thanks All

YorkshireBoy

MSM78 wrote: »

Firstly, I doubt the online switching service is going to accommodate for switching from more than one bank? In terms of myself, wages from Natwest and DD's from Nationwide?

There's no limit on the number of accounts that can be switched. You'd simply ask for two switches. Note you can't switch a joint account into a sole account.

Secondly, if we both move to First Direct I'm assuming the switch incentive would only apply to the opening of the single accounts and not the third joint account?

No need to "assume". That's what it says in the switching T&Cs on their website.

Thirdly, I'll be mortgage shopping in July as our current product comes to an end. Should I wait until after this to avoid lot's of activity on the old credit file? If we move now and close all the other accounts the obligatory 'time with current bank' question is going to be only months.

So, in your case, switch only the account that you've had the shortest time for the FD incentive. Move the credits or debits from the long-held account yourself, thereby keeping the old account open (for its credit rating benefits).

July is 6 months away. I'd be happy to incur a few current account credit searches now.

colsten

MSM78 wrote: »

When we moved to Nationwide we used their switching service but I was weary of having our wages automatically transferred from our employers,

there is now a guaranteed switching service that makes things a lot less risky for you

MSM78 wrote: »

and after never getting around to sorting this, both our original Natwest and Lloyd accounts remain. On top of this my wife's original Lloyds account is now TSB account after they splintered off.

You are sitting on several hundred pounds there. I wouldn't switch all those accounts to FD. Instead I would go round all the other offers, and keep at least some of the switched accounts in reserve for future switching offers.

YorkshireBoy

colsten wrote: »

You are sitting on several hundred pounds there. I wouldn't switch all those accounts to FD. Instead I would go round all the other offers, and keep at least some of the switched accounts in reserve for future switching offers.

With the payout times though, they could be fast approaching remortgage/product switch time in July by the time the 'activity' ceased. Worth bearing in mind I'd imagine?

colsten

Very true, I had ignored that for no good reason. May be just wait until after July. I am pretty sure there will still be switching deal about then.

MSM78

Thanks,

That's all very helpful, I was looking to simply move accounts and close everything else but it makes sense to keep the longer standing accounts open for credit rating purposes. The idea of doing the rounds and taking advantage of numerous switching offers is something I hadn't really considered but, I'm a little hesitant of moving things around too much. I'm hoping switching will be fairly straight forward but I won't be surprised if something goes wrong!

Slight inaccuracy in that I forgot my wife actually closed her Lloyds / TSB account just before Christmas after being messed around with accessing her account online.

So currently our accounts are as follows:-

Me
Natwest Single 20yrs £5000 overdraft
Nationwide Single 5yrs £750 overdraft

My Wife
Nationwide Single 5yrs £750 overdraft

Joint
Natwest Joint 5yrs No overdraft
Nationwide Joint 5yrs £750 overdraft

Other than something going wrong and DD"s becoming missed or overdrafts becoming used, my main consideration will be our credit files and mortgage shopping around July. We have no adverse histories and we've never used our overdrafts but I know time with current bank and credit available to credit used ratios are used by lenders. We have several credit cards each with high limits and low balances so I'm not sure if the rather modest overdrafts would make much of a difference if they closed?

I'm thinking, in regards to me, using the Nationwide for the switch and then manually updating my employer to pay my wages into the new account. I'll keep the Natwest single going as I've had it a long time and it has a £5000 overdraft. I'll then close my Nationwide single or does the switching process do this automatically? If not, I could leave it open but wanted to slim down the amount of accounts we have.

For my wife, as the Lloyds / TSB is no longer open, the only account we can use for her switch will be her Nationwide single so I'm thinking we should keep the Nationwide joint account open for the credit file? In terms of her banking history, if her Nationwide single is closed, would a joint account be as good as a single for time with bank? I did want to keep a Nationwide account open as a bit of a safety net in case come re-mortgage time their mortgage deals are competitive.

The only other thing is for the last five years the only accounts we've actually used for all our bills and day-to-day expenses is my Nationwide single and our Nationwide Joint. All our direct debits come from my Nationwide single so as my wife has no direct debits to speak of, will the switching service still work as there's not much to switch?

Thanks for all the advice so far!

colsten

I would not close any of the accounts (keep them for switching bonuses, as I said before) but I would consider reducing the overdraft facilities quite considerably.

Every ££ of overdraft facility counts as available credit, and reduces the amount of money you can borrow through a mortgage or a loan or a credit card. It will also reduce your chances of getting accepted for current accounts.

MSM78

Ok, keeping all the accounts open, at least for now, seems like the sensible thing to do so thanks for that.

In regards to reducing the overdrafts on the current accounts, I appreciate that all lenders have their own criteria but I don't know whether reducing these would have much difference?

Fortunately, neither my wife or I have never had adverse credit or experienced any problems with obtaining loans, credit cards, mortgages etc. When we both had Experian running a little while ago we were both rated 999, again I appreciate this is only Experian's in house rating system and probably more of a vanity thing to keep you paying for their service!

Not counting the above overdrafts we currently have three credit cards each with combined limits of just over £53000. I have considered cancelling a couple of these as we only really use one but I like knowing we have access to these should we ever require them and also the flexibility of using a credit card for larger purposes then swapping the balance around on the 0% offers until it's paid off.

When it comes time to re-mortgage I'm hoping to be comfortably within the 70% LTV and our mortgage is well within our borrowing limits.

colsten

If you are certain that your borrowing requirements will be met by the lenders, there is nothing to worry about.