New to piggybanking

captainlongtoes

I'm finally debt free and am saving, switching energy suppliers and so on. My main account that my wages get paid into is a Nationwide FlexDirect account that pays 5% interest and a 0% overdraft until October (my aim is to avoid overdraft as much as possible by budgeting well). I have a Santander Everyday current account which I was transferring money to for spending each month. I now have an AmEx Platinum Everyday Cashback card for my usual spending, I was thinking of upgrading my Santander to the 123 Lite and moving my direct debits across to it and using it for that and the £4 a month or so cashback I'd get back for the direct debits. I'd like to hear your thoughts and suggestions for this plan please.

ratechaser

Well done on achieving debt freedom!

1) You've got the right primary CC for cashback. Hope you got it via a referral and will be making the most of the introductory CB rate? May be worth a secondary card for anywhere that doesn't take Amex? And possibly for overseas spending if you travel much (not right now obviously...). Halifax Clarity for example?

2) Definitely do everything you can to budget to avoid regularly dipping into overdraft. May be free now, may not be forever and it can be expensive debt! 

3) If you've done the sums on achievable cashback from 123 Lite, then definitely go for it. It's free money, and right now there's not much of it around in banking...

captainlongtoes

Thanks for your reply! I have a longstanding (18 years!) Barclaycard credit card which I hardly use as it's 22% APR. I was reluctant to get rid of it as it helps with my credit history, but I will definitely consider changing one for travel purposes maybe in a few months. 

I've been using the MSE spreadsheet on a monthly basis and downloaded Yolt and Money Dashboard. I've seen that my spending on lunches and snacks was out of control, and this quarantine has highlighted how much of my spending was truly unnecessary! It's a nice feeling to actually have a little money in the bank just before payday and I want to keep it that way. I'm far more frugal and less of an impulse buyer than I used to be when it comes to things like clothes and electronics. 

I've used the Santander online calculator for the 123 Lite and as it stands I should get £4.94 per month (taking into account the £1 monthly fee) for my direct debits, which is pretty decent. Thanks again for your input