Why Switching Banks Could Be Costing You More Than You Think—And No One’s Telling You Why
Ever tried switching bank accounts only to feel like you’ve just volunteered to skydive without a parachute? That’s how I felt when I finally gave the Current Account Switch Service (CASS) a whirl—despite being knee-deep in the financial blogging world for years. It’s almost like admitting you’ve never held a paintbrush while hosting a home makeover show—awkward, right? Yet, here I am, still clinging to my student bank account (for reasons that hindsight likes to mock), alongside a motley crew of others I’ve juggled over time for their sweeter perks. After juggling a dozen or so since the heyday of Egg Banking, I’d always been the DIY switching type. But leaning on the confidence of my girlfriend, a seasoned CASS user, I took the plunge and, surprise, surprise—the transfer was smoother than I’d dared hope, almost cinematic in its precision. But of course, what’s a financial adventure without a twist? A sudden dip in my credit rating gave me pause, prompting me to question: Is banking loyalty just a harmless quirk, or a sneaky landmine in the credit jungle? Stick around as I unpack this saga, the unexpected lessons it tosses up, and why sometimes, hands-on experience is the best kind of teacher—even if it ruffles the pristine edges of perfectionism. LEARN MORE
What caught my eye this week.
I used the Current Account Switch Service (CASS) for the first time a few weeks ago.
As the founder of a financial blog, I guess this might make me sound like one of those presenters who sheepishly admits in the middle of a TV makeover show that they’ve never held a paintbrush.
It’s not quite that bad. While I confess I still have my student bank account – for all the good such loyalty did me when I needed a chunky mortgage – I’ve always had a couple of other accounts on the go for their higher rates or perks.
There must have been a dozen since the Egg days. It’s just I’ve always done any switching between them for myself.
I’d read enough to know the CASS would probably work fine. But it was still nice to hear my girlfriend’s confidence as a several times user of the service.
Sure enough, the cash and scheduled payments appeared to be transferred away from my dying Santander 123 Lite account in good time, like those diplomats being airlifted off the roof of the US embassy in Saigon in 1975.
And as best I can tell a month later, they were. Everything seems to have gone super smoothly.
The snag
What was surprising though was to get a ping from Monzo this week saying my credit rating was down with one of the reference agencies.
Quite the plunge, too. From nearly 1000 to a good-for-normies 800.
Huh. Nothing else has changed with my personal finances recently except for this switch. And as I say it wasn’t even from my oldest bank account.
The move did see me close down the account that has handled the lion’s share of my direct debits for years though, due to it once touting excellent cashback. So I presume the agency’s computer was alerted to this and cried “shenanigans!”
It’s no biggie. The downgrade doesn’t hurt anything except my sense of perfectionism. The other agencies haven’t raised an eyebrow, and I presume this one will come good soon enough, too.
That said our recent post on stoozing did get me thinking I should ramp up my interest-chasing efforts again, just for the fun of it.
Also now I’ve used the CASS, it’s easy to envisage swapping around a dedicated switching account with a couple of non-core direct debits attached, just to collect the bonuses.
Such cash freebies would be welcome enough. But to be honest they wouldn’t move the dial much at my stage of the game compared to the faff involved.
However this whole episode has been a good reminder of how useful hands-on experience is. I write much more about investing than money matters, but still – perhaps I should keep a toe in these waters? Just like those TV presenters might want to have a bash at doing up their spare room.
Whether the credit agencies would endorse such resurgent vigour is another question!
Have a great weekend.
From Monevator
Low-cost index funds – Monevator
Catastrophe bonds: Getting paid to weather risks – Monevator [Mogul members]
From the archive-ator: Personal time management for fun and profit – Monevator
News
Egg and butter prices are driving up UK inflation – Guardian
UK energy bills to rise by more than expected ahead of winter – BBC
Property tax threat slowing down the housing market [Who knew?] – Guardian
Middle-Eastern buyers swoop on cheap prime London property – City AM
Bank shares swoon on fears new windfall taxes to come in the Budget – This Is Money
LSE gets the go-ahead to run new Pisces private stock market – City AM
There are now more ETFs in the US than stocks – Bloomberg via FA Mag
Wall Street ‘mocks’ idea of London listing, says UK fintech boss – City AM
Unemployment will rise to Covid heights, says think tank… – This Is Money
…with half of UK job losses so far in hospitality, say bosses – BBC
Corporate bond investors have a razor-thin safety net [Paywall] – Bloomberg
Products and services
Energy bills to rise with Ofgem price cap hike in October – Guardian
Four ways to keep your energy bills down – BBC
Get up to £1,500 cashback when you transfer your cash and/or investments to Charles Stanley Direct through this affiliate link. Terms apply – Charles Stanley
Private medical insurance perks: are they worth it? – Which
‘Rent a room’ scheme: how to earn extra money by getting a lodger – Guardian
How Santander’s new ‘blur app’ feature could save you from scammers – Which
Get up to £100 as a welcome bonus when you open a new account with InvestEngine via our link. (Minimum deposit of £100, T&Cs apply, affiliate link. Capital at risk) – InvestEngine
Apple hikes TV streaming fee – Money Saving Expert
Why travellers are flying abroad… for day trips – BBC
Mid-century homes for sale, in pictures – Guardian
Comment and opinion
Reasons to be bearish about US stocks – Of Dollars and Data
Vanguard defends its controversial 70/30 stocks/bond call – Morningstar
Bitcoin is built to fail – The Small-Cap Strategist
Where have all the contrarians gone? – A Wealth of Common Sense
How to [not] beat the market – Humble Dollar
What National Insurance on rental income could mean for BTL – This Is Money
Do you have 600 years for house price growth to deliver? – Propegator
Why wait? Mini retirements and living a big life [Podcast] – Boldin Your Money
Return factors for REITs [Research] – Alpha Architect
Working late mini-special
Save the UK state pension by taking it away from the under-75s – The Times
Why we’ll all be working into our 70s – This Is Money
Naughty corner: Active antics
Why the bond market is fertile ground for active management – Morningstar
Which bond funds held up the best in the post-pandemic bond rout? – Trustnet
The ‘sell America’ trade was basically only in April – Axios
Yet another look at big tech concentration and valuation – Novel Investor
Strategy’s sagging Bitcoin strategy – FT
Kindle book bargains
Too Big to Fail by Andrew Ross Sorkin – £0.99 on Kindle
50 Economics Ideas by Edmund Conway – £0.99 on Kindle
Mastering the Business Cycle by Howard Marks – £0.99 on Kindle
Or read one of the best investing books written – Monevator shop
Environmental factors
Heat pumps could halve heating bills with energy system reform – Guardian
How to work out whether you should get solar panels – This Is Money
Japan has opened its first osmotic power plant – Guardian
London’s ‘wet wipe island’ just got bulldozed [With video] – ABC News
Collapse of critical Atlantic current is no longer ‘low’ likelihood – Guardian
Robot overlord roundup
General Partners: AI investors are navigating ‘peak ambiguity’ – FT
How to argue with an AI booster – Ed Zitron
One in ten UK banking jobs at risk from AI… – City AM
…and more claims AI is taking jobs from young people – Derek Thompson
…though job churn is nothing new – Seth Godin
US Intel – Stratechery
Getting an AI impersonator to teach your own students – The Conversation
Not at the dinner table
Minister takes on Nigel Farage over Brexit deal… – BBC
…but Farage should be held to account for Brexit write large – Guardian
Reform prepared to deport 600,000 under migration plans – BBC
Where are the UK’s asylum seekers coming from? – Sky
Why calling anti-asylum protestors ‘fascist’ doesn’t work – Guardian
Worst economic experiment ever – Daniel Drezner
Off our beat
The electric slide – Not Boring
A case study in how ecological conflict halts new housing [Podcast] – A.L.T.I.F.
Blood diamonds and the geographic lottery – Forking Paths
The secrets of lost luggage auctions – Guardian
Advice for the truly productivity-challenged – Raptitude
The happiest place on Earth – Slate
Chickenpox jabs introduced as UK vaccination rates fall below herd immunity levels – Guardian
Why Gen Z has had enough of working from home – Guardian
And finally…
“Choosing individual stocks without any idea of what you’re looking for is like running through a dynamite factory with a burning match. You may live, but you’re still an idiot.”
– Joel Greenblatt, The Little Book that Beats the Market
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