Switching banks for rewards and then switching again

jimmymoon

I'm looking to switch banks but I'm torn between those offering money to switch, and those who have good rates and savings account etc. It got me thinking - is there anything stopping me from switching to a bank that'll give me money for switching, staying with them for however long is required, and then switching again? Would it affect my credit score or something having switched banks in quick succession?

YorkshireBoy

jimmymoon wrote: »

I'm looking to switch banks but I'm torn between those offering money to switch, and those who have good rates and savings account etc. It got me thinking - is there anything stopping me from switching to a bank that'll give me money for switching, staying with them for however long is required, and then switching again? Would it affect my credit score or something having switched banks in quick succession?

Keep your oldest current account.
Use donor/sacrificial accounts for switching incentives.
Any specific requirement to stay for a period of time will be detailed in the respective switching incentive T&Cs. Read them carefully!
Cease all account applications 3-6 months before any mortgage/remortgage application.

jimmymoon

I only have the one account and I'd need to switch from that to get the rewards. Is it worth opening a new account with my current bank and then transferring?

eskbanker

jimmymoon wrote: »

I only have the one account and I'd need to switch from that to get the rewards. Is it worth opening a new account with my current bank and then transferring?

Yes, that's exactly what YorkshireBoy was suggesting by "Keep your oldest current account. Use donor/sacrificial accounts for switching incentives."

Mchambers

jimmymoon wrote: »

I only have the one account and I'd need to switch from that to get the rewards. Is it worth opening a new account with my current bank and then transferring?

I have switched loads of times; to get switching bonuses and interest rates with M&S, Coop, Halifax. Lloyds, N/wide. etc.

Before I switch, I create a new current account with Nationwide, create d/debits (enough to get the rate or bonus) payable to myself via my 2 Tesco savings accounts, then transfer my N/wide account to the new bank or building society. It has worked every time. I am mortgage free (paid off years ago), have no loans, pay my credit cards off in full each months, etc. and I have an excellent credit rating. As others have said, be careful if you are about to get a new mortgage or loan, as this approach may impact your credit rating and so your chance for a mortgage or loan.

I have already created a new N/wide account for the next 'must-have'.

HTHs.

jimmymoon

Thanks for the advice everybody. Would it make more sense to create a new account with the bank I'm with now, or doesn't it make a difference?

eskbanker

jimmymoon wrote: »

Thanks for the advice everybody. Would it make more sense to create a new account with the bank I'm with now, or doesn't it make a difference?

It's generally recommended to open a second account with your existing bank because you'll already be known to them and so are unlikely to have to go through ID verification, etc, as a new customer would, so it should be a more straightforward process for you, but there's nothing to stop you opening a sacrificial account elsewhere if you don't think that's a significant benefit.

jimmymoon

I've just opened a "sacrificial" account. What's a good amount of time to leave it to rest before I start switching? I can only assume alarm bells will ring if I start trying to switch too soon.

eskbanker

jimmymoon wrote: »

I've just opened a "sacrificial" account. What's a good amount of time to leave it to rest before I start switching? I can only assume alarm bells will ring if I start trying to switch too soon.

The key thing is to make sure that the account to be switched is compliant with the terms of the incentive, so, for example, some such deals are dependent on switching an account that has a certain number of active direct debits in place - in these circumstances the usual recommendation is to ensure that each DD has been used at least once before switching.

Apart from that though, you can crack on as soon as you're ready, there's no arbitrary bedding-in period after which it suddenly becomes OK to switch an account!

jimmymoon

It seems there are terms that make this easier said than done.

What are actually the dangers of using my main current account for switching and getting incentives?

genieuk

We had two accounts with Barclays, switched one to First Direct last year this month just switched the remaining one to Halifax once I had DD's going from it.
First Direct was a breeze to switch to. Halifax took a little longer and a few more calls.
We had been Barclays customers since early 90's.
I wouldn't switch at the time of applying for mortgage or other credit etc.