Four ways to manage your money better in 2017: how to consolidate your credit cards, switch energy suppliers, remortgage and save

Are your New Year’s Resolutions already in tatters? Forget the gym, here are your important financial exercises.
Get back in shape: rebalance your books after the big spend with a zero-interest credit card, a new energy provider and mortgage deal — and get the saving habit
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Sara Yates16 January 2017

1. NEUTRALISE THOSE CHRISTMAS DEBTS

Credit card debt hit a record high in the run-up to Christmas, according to the Bank of England, with £572 million added in November alone. Now is the time to tackle this. Consolidate your credit card debts on to one interest-free balance transfer card, so that you pay off the debt without accumulating interest charges.

Picking the best card means working out what you need most. If you can only afford small monthly repayments, opt for a card with an über-long interest-free period, even if it means paying a modest transfer fee.

Barclaycard Platinum and Lloyds Bank Platinum provide up to 40 months of zero interest on balance transfers for less than a two per cent fee. Both cards also offer zero per cent on purchases for six months, helping you to keep your future debt pile under control.

If you can afford to pay off your debt faster, try Halifax’s nought per cent balance transfer fee offer. This card charges no fee for balance transfers, provides 25 months of zero interest on the existing balance and offers six months of zero interest on all new purchases.

2. DON’T LET ENERGY BILLS BURN A HOLE IN YOUR POCKET

According to the Competition and Markets Authority “70 per cent of domestic customers could save as much as £300 a year by switching to cheaper deals”. Make sure you don’t miss out.

Read your energy bill — Ofgem requires your provider to tell you where you could get a better deal. Alternatively, spend the few minutes it takes to input your details into one of the many online comparison sites. It is worth doing.

Switching couldn’t be easier. You just need your postcode, a recent bill and access to a phone or energy comparison price site. And remember, all you are changing is the company that bills you. Your energy supply remains the same and is not interrupted.

If you are on a fixed-rate plan, do check if there are exit penalties to move. Otherwise, you could move to the cheapest provider every 28 days, if you wish.

3. REMORTGAGE WHILE THE OFFERS LAST

HSBC scrapped its market-beating 0.99 per cent mortgage last month and hiked the interest rate on many of its other products. Many other providers also swerved the Christmas cheer and withdrew or increased the cost of their mortgages.

Whether or not this marks the start of a turnaround in interest rates, it is a good reminder that low rates won’t be here forever. If you haven’t remortgaged for a few years, get on the case now.

Yorkshire Building Society is still offering a variable mortgage with an interest rate of less than one per cent — the 0.98 per cent two-year discounted variable mortgage, maximum loan-to-value of 65 per cent.

If you prefer the certainty of a fixed mortgage rate, Leeds Building Society has a two-year fixed product with a rate of 1.19 per cent if you have at least 25 per cent equity in your property.

Remortgaging now could save you thousands. If you are paying a three per cent interest rate on a £300,000 mortgage and have 20 years left, you could save over £6,000 in repayments in two years by switching to a fixed-rate mortgage at 1.2 per cent.

However, before you jump, check for early repayment charges and product fees, as these can swamp the savings made by moving your deal.

4. SAVE, SAVE, SAVE

Regular savings soon add up to a decent nest egg. Of the regular saving accounts, Nationwide tops the charts. Its Flexclusive Regular Saver Account for current account customers — or switchers — offers an eye-catching five per cent Annual Equivalent Rate, allows monthly deposits of up to £500 and permits withdrawals within its 12-month lifespan, so it’s perfect if the big event you are saving for is not too far away.

HSBC, First Direct and M&S also offer five per cent regular saving accounts for their current account customers, though the amount you can save each month is limited to £250-£300. And as these heavily penalise early withdrawals, you need to leave your money in for the full 12 months.

But don’t leave it in any longer. Note the anniversary of your deal and be ready to switch before your rate plummets.

Another option is to create your own accessible regular savings account by simply setting up a standing order to a savings account such as Tesco Bank’s Internet Saver. Although this pays less than many of the regular savings accounts at just one per cent, including a 0.6 per cent bonus, there are no limits on how much you deposit each month and withdrawals are unlimited.