New to Switching, apart from buying a house soon, are there others reasons to not switch?

Fuel22

I'm new to switching and I read up on the guide on the main page. It says to not switch if you are buying a house soon but wanted to know if there were other pitfalls because clearly the money isn't just free. 

What would be the best way for someone to start today with the offers available?

WillPS

Fuel22 said:

wanted to know if there were other pitfalls because clearly the money isn't just free.

Banks spend tens/hundreds of millions on marketing; even if they personally give you nothing for joining/switching ("converting" in marketing jargon) the calculated 'cost per acquisition' is likely several hundred. They can justify this based on a supposed 'lifetime value' which is statistic which is supposed to indicate how much much benefit an average switcher brings. Of course, whether you provide any value to them at all is entirely up to you, all you're giving them is a doorway to put it through (which you can close at any time after you've received your bonuses).

Fuel22 said:

What would be the best way for someone to start today with the offers available?

It's not a fabulous time, as the recent decent offers from Lloyds, Santander and Natwest Group have all finished. As noted on that page you referred to the only bonus widely available presently is First Direct. Keep an eye on this board is my advice, sometimes there are offers MSE won't feature but can still be lucrative, normally referral deals or deals offered via partnerships with companies other than MoneySupermarket (MSE's owner).

eskbanker

Fuel22 said:

I'm new to switching and I read up on the guide on the main page. It says to not switch if you are buying a house soon but wanted to know if there were other pitfalls because clearly the money isn't just free.

The point they're making is that applying for new current accounts entails a hard credit check each time, and the acquisition of a credit product from any successful applications also leaves a footprint on credit files.  This can lead to issues if the status of your credit files is important to you, such as ahead of major lending activity like a mortgage....

PRAISETHESUN

The recommendation to not switch isn't about switching itself, it's about opening new accounts prior to a mortgage application. Typically new accounts put hard credit searches on your files, which lenders don't like. You can switch existing accounts as much as you like, or open new accounts which don't require hard credit searches (eg. Chase, Monzo, Starling, etc) without any issues here.

Best way to start IMO is to set up a few "donor" accounts with various banks so you are ready to go when new offers drop (recently there have been some very short-lived offers which people missed because they didn't have a spare account to switch). Spread them out as there's a few stories stories on here about people receiving lifetime bans from certain banking groups for taking the mickey and opening large amount of accounts purely for switching. Once you have these, just apply for new accounts as/when offers come available. I have a few set up with token DDs as these are often (but not always) required as a part of the offer.

SiliconChip

One reason for not switching is where an account has been open for a longtime so has considerable history associated with it that would be lost if switched to a new account. The way round this is to keep your old accounts and open new donor accounts to switch from.

Fuel22

Thanks for that, so in a way its not free money, they expect to make it back, which makes me more comfortable on the idea. I'm at a point where im not considering a house in the next few years or buying a car on finance

Plan now is to get a donor account with Monzo and take up the first direct offer. Then maybe the santander offer

steven141

Fuel22 said:

Thanks for that, so in a way its not free money, they expect to make it back, which makes me more comfortable on the idea. I'm at a point where im not considering a house in the next few years or buying a car on finance

Plan now is to get a donor account with Monzo and take up the first direct offer. Then maybe the santander offer

I would recommend opening a donor account with Chase. There have been stories on here of Monzo not taking well to opening and closing an account so quickly. 

If you do get a Chase account, open a second one in the app which will appear straight away. They don’t send any extra cards out for additional accounts with Chase only the first account. 

It is confusing but you can select the account that you want to spend from with your Chase debit card. It can be changed as many times as you want. 

If using Chase keep one account open at all times and you won’t have any issues otherwise people have been reporting that once you close your account you can’t get one again. 

I hope that all makes sense. 

danny13579

Fuel22 said:

Thanks for that, so in a way its not free money, they expect to make it back, which makes me more comfortable on the idea. 

Even if it was free money I would have no qualms whatsoever about taking it from them. When you look at the massive bonuses they pay themselves, any discomfort will quickly disappear.

It's all part of their marketing budgets. To be able to say in such and such a quarter we acquired X amount of new customers and targeted them with Y amount of offers and made Z amount of profit out of them. Of course some will switch and ditch, that's all factored in. They even have names for these people, "carpetbaggers" and "the Martin Lewis crowd"! New customers can be targeted with profitable products such as life insurance policies or loans. It must work for them or they wouldn't keep doing it.

While I used to switch and ditch, in the last couple of years I have tended to keep the new accounts I have opened. Mainly because I rarely qualify for switching bonuses anymore. Some offer reward bonuses every month, some offer debit card cashback, some offer high interest savings accounts, some offer high interest regular saver accounts, some offer goodies like magazine subscriptions or cinema tickets.

WillPS

steven141 said:

Fuel22 said:

Thanks for that, so in a way its not free money, they expect to make it back, which makes me more comfortable on the idea. I'm at a point where im not considering a house in the next few years or buying a car on finance

Plan now is to get a donor account with Monzo and take up the first direct offer. Then maybe the santander offer

I would recommend opening a donor account with Chase. There have been stories on here of Monzo not taking well to opening and closing an account so quickly. 

If you do get a Chase account, open a second one in the app which will appear straight away. They don’t send any extra cards out for additional accounts with Chase only the first account. 

It is confusing but you can select the account that you want to spend from with your Chase debit card. It can be changed as many times as you want. 

If using Chase keep one account open at all times and you won’t have any issues otherwise people have been reporting that once you close your account you can’t get one again. 

I hope that all makes sense. 

This is good advice. Chase is an excellent platform from which to create donor accounts quickly, easily and without need for a hard search.

Just make sure you leave at least one account with Chase open as like Monzo they don't take people back when they completely switch away.

Nasqueron

steven141 said:

Fuel22 said:

Thanks for that, so in a way its not free money, they expect to make it back, which makes me more comfortable on the idea. I'm at a point where im not considering a house in the next few years or buying a car on finance

Plan now is to get a donor account with Monzo and take up the first direct offer. Then maybe the santander offer

I would recommend opening a donor account with Chase. There have been stories on here of Monzo not taking well to opening and closing an account so quickly. 

If you do get a Chase account, open a second one in the app which will appear straight away. They don’t send any extra cards out for additional accounts with Chase only the first account. 

It is confusing but you can select the account that you want to spend from with your Chase debit card. It can be changed as many times as you want. 

If using Chase keep one account open at all times and you won’t have any issues otherwise people have been reporting that once you close your account you can’t get one again. 

I hope that all makes sense. 

There is no issue opening and switching a Monzo account, they can't do anything to you except put you on a blacklist for new accounts. Unless you want to use them again, the blacklist is irrelevant once you switched as you logically then have another account to be able to switch again - or open a second account with the new bank. I did Monzo & Starling to start the switching 2 years back or so, Starling I re-joined end of last year with a joint account that is used still. Monzo I haven't touched since, I got another account from Nationwide for a switch and now I have more than enough to bounce around as needed

WillPS

Nasqueron said:

steven141 said:

Fuel22 said:

Thanks for that, so in a way its not free money, they expect to make it back, which makes me more comfortable on the idea. I'm at a point where im not considering a house in the next few years or buying a car on finance

Plan now is to get a donor account with Monzo and take up the first direct offer. Then maybe the santander offer

I would recommend opening a donor account with Chase. There have been stories on here of Monzo not taking well to opening and closing an account so quickly. 

If you do get a Chase account, open a second one in the app which will appear straight away. They don’t send any extra cards out for additional accounts with Chase only the first account. 

It is confusing but you can select the account that you want to spend from with your Chase debit card. It can be changed as many times as you want. 

If using Chase keep one account open at all times and you won’t have any issues otherwise people have been reporting that once you close your account you can’t get one again. 

I hope that all makes sense. 

There is no issue opening and switching a Monzo account, they can't do anything to you except put you on a blacklist for new accounts. Unless you want to use them again, the blacklist is irrelevant once you switched as you logically then have another account to be able to switch again - or open a second account with the new bank. I did Monzo & Starling to start the switching 2 years back or so, Starling I re-joined end of last year with a joint account that is used still. Monzo I haven't touched since, I got another account from Nationwide for a switch and now I have more than enough to bounce around as needed

...which is all well and good if you presume Monzo's account offer will never change; but that's unlikely. It's not impossible that they too will offer some sort of CASS bonus one day, for example (they haven't yet, for clarity, and it's not something I expect - but who knows what might happen).

Chase is the much easier option, especially if you want to have a set of accounts all ready to switch when the other bonuses return.