New graduate job

Ulti

Hi MSE,

Firstly forgive me if this thread is in the wrong place!

I've just started a graduate job after coming out of uni and wanted some general advice for how to save/invest my money. I'm currently living at home with parents due to rents being stupidly high.

Currently I am with two banks:

1) Santander:
123 Current Account

2)HSBC
Bank Account
Help to Buy ISA
Loyalty ISA

I have a bit of savings as I've been working part time. Most of it is in the Santander account and my salary is paid into that account. I then have a some sitting in the HSBC B/A for online purchases as I find HSBC generally have pretty good customer service. The Help to Buy ISA is a recent addition where I will "max" it every month (I.e. have £200 put in).

Now my current plans are to:
1) Open a TSB Classic Plus 555 Account & Saver
2) Obtain a credit card from one of the 3 banks (HSBC, Santander or TSB)

Reason for TSB is because of the 5% interest on £2000 plus ability to save with their saver account. I would set up a standing order from Santander to TSB Classic then to Saver. Is that the correct way of doing things? My lunch is all paid via contactless too so on average with a spend of £2-4 a day, that's £40-80 a month from contactless payments alone I assuming I eat 5 days a week, 4 weeks a month.

I believe I should start building my credit history but I am not sure which bank to go for in terms of a credit card. I won't be able to get it immediately I believe as I will have to prove my income which I assume can only be done several months into my new job.

My question is are my two decisions correct and which bank CC should I go for? I know I can open more bank accounts but banking with 3 different banks is enough for me and I don't wish to bank at any more than 3.

Thank you!

grumbler

For a credit card you normally just declare your income, not have to prove it (this doesn't mean that it's acceptable to lie).

First CC is usually either with the bank you have a longstanding current account with or one of so called Credit Cards for Bad Credit. I suggest trying to get Aqua Reward as it pays cashback and is good for spending abroad.

Re savings, I think short-term 5% is much better than any 'Loyalty ISA'. There are few banks paying 5% on limited balances and there are few regular savings accounts, top one paying 6%. Unless you are getting cashback on your S123 DDs exceeding £5, it's worth switching it to some better account, possibly for a bonus, e.g. to Halifax.

Archi_Bald

grumbler wrote: »

Re savings, I think short-term 5% is much better than any 'Loyalty ISA'.

That is generally the case but with the HSBC "Save Together" option it has definitely been worth putting £25 a month (or a £300 lump sum) into the Loyalty ISA. I would agree there is no point in putting any more than that into the HSBC ISA, or any other normal cash ISA.

Here's a good summary of best rates: https://forums.moneysavingexpert.com/discussion/5374614

book12

For credit cards, try your existing bank first before trying somewhere else. If they don't accept you try a Barclaycard.

Ulti

Thanks for the replies so far. I had the loyalty ISA from a while back and don't actually plan on doing anything with it now that I have the Help to Buy ISA. I like the Santander account as it pays a decent amount of interest on a large sum whereas to maximise the interest on up to £20k I would have to open up a lot of accounts which is a pain.

In terms of CC I was planning to open it either with HSBC or Santander but I've heard you get much better customer service at HSBC but it doesn't seem like I get many benefits from their CC whereas with Santander they do cash back and some other stuff. Haven't looked at TSB yet.

Tl;Dr - Basically I am with HSBC and Santander and want to open one more bank account with a high interest component and then also open a credit card with either of those 3 banks.

book12

Ulti wrote: »

Thanks for the replies so far. I had the loyalty ISA from a while back and don't actually plan on doing anything with it now that I have the Help to Buy ISA. I like the Santander account as it pays a decent amount of interest on a large sum whereas to maximise the interest on up to £20k I would have to open up a lot of accounts which is a pain.

In terms of CC I was planning to open it either with HSBC or Santander but I've heard you get much better customer service at HSBC but it doesn't seem like I get many benefits from their CC whereas with Santander they do cash back and some other stuff. Haven't looked at TSB yet.

Tl;Dr - Basically I am with HSBC and Santander and want to open one more bank account with a high interest component and then also open a credit card with either of those 3 banks.

Bank accounts with high interest here - http://www.moneysavingexpert.com/banking/compare-best-bank-accounts?_ga=1.117735241.1372727462.1450113012#interest

colsten

Ulti wrote: »

Tl;Dr - Basically I am with HSBC and Santander and want to open one more bank account with a high interest component and then also open a credit card with either of those 3 banks.

Which, in a nutshell, means you are not maximising the interest potential.

Ulti

Just a quick post-Christmas update. Hope everyone had a good Christmas!

I applied for a Santander 123 Credit Card as HSBC didn't seem to offer any rewards with their CC and I've just joined TSB so doubt they would accept me. Unfortunately I was declined by Santander so I've requested a credit report from Experian. The last time I checked with Experian using their free 30 day trial in May 2015 I had a good credit report with 972/999 so I was rather surprised to get rejected. I will see what the report says when I receive it and may try to argue it in a Santander store.

As mentioned, I did open a TSB account which was really simple to do online and didn't take more than a few minutes. I decided to close the HSBC Loyalty ISA as it's not worth having that around at all.

I also made a little but basic spreadsheet to see how much interest I can get. It's not 100% accurate but it gives me a rough indication of which banks to go for next and how much interest I can gain.

(Not allowed to post pics/links yet)

Not sure it's worth opening a few more accounts just for an extra £40-60 a year per account.

colsten

I think you absolutely got the right idea but you aren't necessarily using the right accounts. E.g. why use a 2% HTB ISA when you can get a 4% one? Why use a 3% Santander 123 with a £60/yr charge for £17,000 when you can get 3% with no charge for £21,000?

https://forums.moneysavingexpert.com/discussion/5374614

On the other hand, if an extra £40-60 a year per account doesn't matter to you, you might as well not bother with anything "money". For most people it will matter that they get the very best return from their savings and investments.

MDMD

Ulti wrote: »

I applied for a Santander 123 Credit Card as HSBC didn't seem to offer any rewards with their CC and I've just joined TSB so doubt they would accept me. Unfortunately I was declined by Santander so I've requested a credit report from Experian. The last time I checked with Experian using their free 30 day trial in May 2015 I had a good credit report with 972/999 so I was rather surprised to get rejected. I will see what the report says when I receive it and may try to argue it in a Santander store.

Bear in mind the Santander benefits are due to be cut from next month and the fee raised for new application. HSBC have a £25 cashback offer for taking out a card with them at the moment

http://www.hsbc.co.uk/1/2/credit-cards/credit-card

Credit scores are usually regarded as meaningless with each provider deciding whether to accept you on their own criteria.

Ulti

@colsten

I'm young so I don't have the credit rating to hop around and open a billion bank accounts, or at least I don't think I can without it affecting my credit score.

Yeah I know, it's "free money" in effect and I'm not making the most of it. I'm kind of a half way person - I wouldn't like to miss out on something, but I wouldn't bother to make the most/exploit the opportunity either.

@MDMD

Yep, that's why I was hoping to get a CC from Santander as it's free for the first year for their 123 Current Account customers if applying for a CC before Jan 2016.

£25 cashback as a one off doesn't really entice me as much as constant cashback tbh. Although it seems I wouldn't get much cashback from the Santander card anyway.

Would it harm my credit score a lot if I applied for the HSBC credit card too even though I was only rejected from Santander a week ago?

How important is it to build credit using a credit card anyway? I.e. if I just go about my daily life using debit cards and save up money to get deposit for a mortgage, is it more likely I'll be declined for not having credit history from using a credit card?