A&L Current Account

tomewer

Hello,

I've been looking for a current account that would be ideal for me, and I think it is the A&L account (min £500 in per month with 8% on balances up to £2,500).

I currently use a Natwest graduate account with a £1000 overdraft (reducing to £500 in June). I'm not keen on the idea of using the limit of my overdraft (I just like to be in the black!), so I would like to earn interest on my earnings as they are whittled away during the month then put the remainder in my ISA (or mortgage) at the end.

Does this make sense?

Cheers

Richard019

Coincidentally I've just gone through that exact thing.

The account I got was the Abbey one (reading on here you might be better sticking with the A&L one) and the interest rate only applied to £2,500 if you switched the account. If you just opened a normal one it applied to the first £1k with a 2.5% after that.

The reason I mention it is that the student overdraft could cause problems. Someone can correct me on it as I might be totally wrong but I worried about hitting the new account with a £1k overdraft if I switched so I did it manually for the lower benefit. The limit wasn't an issue as I could have had that, just the interest on it. In effect I'm not getting a lower benefit because the money above £1k is going into ISA's when I earn it and I'm getting 6.5% on them (8% = 6.4% after tax in the curret accounts).

Once you've got your new account open and have confirmation that everything has been moved to the new account set the balance of your Natwest account to -£500 (you'll be near enough at the reduction date by then) and leave it in the Abbey account for some deficit banking. Your Natwest account can sit there for a year not doing anything at all whilst you make £30+ for sitting their money elsewhere. Just make sure you repay that £500 on time (You could set up the transfer now)

When you're earnings go into the other account you'll get your 8% on the first £500 and 2.5% on the rest (using mine as an example). How you manage "your" money will depend on what comes in and out and when it does it which you'll know better than me.

Incidentally, it's the end of June the interest starts getting charged on the excess Natwest OD. Last year I was a touch over the £1k mark and my first interest payment was at the end of August, meaning it was notified on the 5th August statement date which covered July.

tomewer

Richard019 wrote: »

Coincidentally I've just gone through that exact thing.

The account I got was the Abbey one (reading on here you might be better sticking with the A&L one) and the interest rate only applied to £2,500 if you switched the account. If you just opened a normal one it applied to the first £1k with a 2.5% after that.

The reason I mention it is that the student overdraft could cause problems. Someone can correct me on it as I might be totally wrong but I worried about hitting the new account with a £1k overdraft if I switched so I did it manually for the lower benefit. The limit wasn't an issue as I could have had that, just the interest on it. In effect I'm not getting a lower benefit because the money above £1k is going into ISA's when I earn it and I'm getting 6.5% on them (8% = 6.4% after tax in the curret accounts).

Once you've got your new account open and have confirmation that everything has been moved to the new account set the balance of your Natwest account to -£500 (you'll be near enough at the reduction date by then) and leave it in the Abbey account for some deficit banking. Your Natwest account can sit there for a year not doing anything at all whilst you make £30+ for sitting their money elsewhere. Just make sure you repay that £500 on time (You could set up the transfer now)

When you're earnings go into the other account you'll get your 8% on the first £500 and 2.5% on the rest (using mine as an example). How you manage "your" money will depend on what comes in and out and when it does it which you'll know better than me.

Incidentally, it's the end of June the interest starts getting charged on the excess Natwest OD. Last year I was a touch over the £1k mark and my first interest payment was at the end of August, meaning it was notified on the 5th August statement date which covered July.

Very cunning...the interest is actually 8.5% so I'll earn more on my first £2,500 then I would in my ISA after tax. So if I keep a balance of around £2,500 at all times with the rest going into my ISA/mortgage, I'm set to go! Thanks!

Richard019

tomewer wrote: »

Very cunning...the interest is actually 8.5% so I'll earn more on my first £2,500 then I would in my ISA after tax. So if I keep a balance of around £2,500 at all times with the rest going into my ISA/mortgage, I'm set to go! Thanks!

I will take the credit for that one as I thought of it myself (not claiming to be the first but I didn't get the idea from someone else), but the main site is even better. You should look at things like the stoozing page in particular an MBNA or Virgin card and/or joining Egg Money.

If you're going into that side of things though you should go into Natwest and get them to reduce your overdraft allowance to just the 0% bit. The rest of it is credit you're never going to use but which will affect how much you can get elsewhere. I did it yesterday and walked out with £1,700 less available credit against me. Although I've not had any problems getting credit yet it is possible it's reduced the credit limits I've been offered elsewhere.

tomewer

Richard019 wrote: »

I will take the credit for that one as I thought of it myself (not claiming to be the first but I didn't get the idea from someone else), but the main site is even better. You should look at things like the stoozing page in particular an MBNA or Virgin card and/or joining Egg Money.

If you're going into that side of things though you should go into Natwest and get them to reduce your overdraft allowance to just the 0% bit. The rest of it is credit you're never going to use but which will affect how much you can get elsewhere. I did it yesterday and walked out with £1,700 less available credit against me. Although I've not had any problems getting credit yet it is possible it's reduced the credit limits I've been offered elsewhere.

I've looked into stoozing, and the kind of credit limits I get don't really make the effort worthwhile in my opinion (my credit rating will be flawless as I've never had debt problems, but I image that the lack of my regular usage of a credit card hasn't helped when it comes to credit limits?)

I have applied for the Amazon Mastercard (for the free £15 voucher and 6 mo. 0% interest free) and the Amex (for £25 cashback and 5% cashback on purchases for 3 mo.). I assume that the more I use credit cards, the better credit limits I will get in the future.

Richard019

tomewer wrote: »

I've looked into stoozing, and the kind of credit limits I get don't really make the effort worthwhile in my opinion (my credit rating will be flawless as I've never had debt problems, but I image that the lack of my regular usage of a credit card hasn't helped when it comes to credit limits?)

I have applied for the Amazon Mastercard (for the free £15 voucher and 6 mo. 0% interest free) and the Amex (for £25 cashback and 5% cashback on purchases for 3 mo.). I assume that the more I use credit cards, the better credit limits I will get in the future.

You would think. I have a perfect credit history. My applications for credit cards aren't as good as my play the system banking in that I had no planning until a couple of months ago. It does show that it's more important who you apply to than almost anything else though:

My first credit card I applied for at a football game because they were there doing what they do. I applied as a part-time worker to avoid the negative effects of being a student (see NatWest card). That got me an MBNA card with a 2k limit.

A year or so after that I applied for a Natwest one (for ease of them being linked to my current account online) and was given £400 which is frankly useless.

Time went on and I used the MBNA card a lot and paid off in full every month, went for my mortgage and they were shocked at how much I could borrow compared to my earnings (I don't think being dressed in sports gear helped first impressions).

Another year went on and I asked Natwest for a credit increase (knowing I was preapproved for a £7k loan with them) and they told me I could have an extra £50 (yes that's a total of £450). The following week I went to MBNA and got my limit increased to £4k (for a balance transfer), opened the new bank account where they said they'd give me £1kOD (which I declined) and applied to HSBC for a credit card for purchases and got given £3k. I have to assume NatWest are holding it back because of my student history as nobody else is.

If I were you I wouldn't apply for any more cards just yet due to the build up of checks, but the benefit of stoozing isn't really seen at the start. You need to build it up. I'm only making £300 this year (maximum transfer from MBNA and buying for 7 months on the HSBC card). After that I need to transfer those balances to new cards (which is why I only use 7 of the 12 months on the HSBC) rather than paying them off. Then next year I do the same with a new purchase card and another balance transfer from MBNA (cash in current account/ISAs). Having a big credit limit is only good for stoozing if you can get the cash elsewhere.