Banking Without Borders
00:19:54 · Jan Watermann, Jonny Pease
[00:19:54] S1: Yeah, besides that, other options. Money transfer cards, that could be a good alternative, and uh balance transfer cards potentially, right? [00:20:01] S0: Money transfer cards, you know, Tesco Bank have the all-round card or a credit card essentially, where you're basically taking money off the credit card and you're putting it into a current account, say, to pay off an overdraft, for example. That can be quite good, Jan. You'll pay a 3.99% fee on however much money you take out. That's not something you have to pay immediately either. That's just added to the balance. And yeah, the balance transfer card, I think, is probably the most well known, isn't it? And that TSB offer, how many months? Sorry, remind me, what's the platinum offer on the balance transfer card? It's actually 38 months, I believe. Enough time to set up a strict monthly direct debit budget to pay off the balance. There is a fee of 3.49%, I think, and you have to make the transfer within 90 days. Importantly, if you do do that, as soon as you open that card, that window has begun, that time has started. So you've got to act quickly. Be ready to make the balance transfer, be ready to set up the direct debit to start paying that off.
00:20:52 · Jan Watermann
[00:20:52] S1: That's right, Jonny. And for shorter periods, I think buy now pay later also deserves mentioning. Let's say your your washer breaks, you can't afford to buy a new one this month, but you know for a fact that you'll be getting money next month and you'll be able to afford it then. You probably don't have to take out a credit card or um look for a personal loan. Maybe you can just go ahead and uh find a buy now pay later provider that offers 0% interest. Klarna, for example, I believe they have 60 days free, um, if I'm not wrong, and it could be a solid choice that's potentially free, solid alternative.
00:21:23 · Jonny Pease
[00:21:23] S0: Buy now pay later providers can impact your credit score. Applying often uses a soft credit check, which won't obviously affect your credit score. However, they will report the repayment data. So if something goes wrong there, then that'll be reported. If something goes well or you pay it off properly, that'll also be reported. So it can be positive. But I think that's important, Jan, to bring up, isn't it? Because you know, if you if you go down the card route, for example, there are certain ways to do it properly, aren't there? Like checking your eligibility first, you know, doing the soft searches first, TSB. They both have checkers in place. So you can check to see if you'll be accepted before. Having anything impact your credit score, whether positive or negative. That's yeah, that is crucial. You're absolutely right. A couple of other crucial things, I suppose. You know, never take cash out on these credit cards. I think that's obvious. Um, and also clear it before the deal ends. I already mentioned that once, but I want to stress that a lot of these cards, a lot of these balance transfer cards, and buy now pay later products as well. If you don't clear them, the interest will start to kick in and in some cases increase, get worse. You'll end up having to pay more and more and more off. You've got to be very calculated about this if you're gonna do it. If you're gonna borrow money, you must be able to pay it off. You must be strict about that. Tattoo it to your hand. Must pay off. It might cost money as well. Please. Yeah, that might cost money. Don't put that on the credit card. So, what if you have to take a loan out, Jan? What if you've got to do a personal loan? What if you've got to go through Revolut, Monzo, Santander? Are there any things that we I you know, I think we've been relatively balanced in this episode and try to because I understand that some people have to do it, some people have no other choice. So, Jan, what if you are someone that has no other choice but they need a personal loan?
00:23:07 · Jan Watermann
[00:23:07] S1: Yeah, I'd say be as conscious about it as possible and try to get the best possible rate for your personal situation. Unfortunately, these interest rates that are being published. You know, they're just the representative rates, as we've mentioned in the beginning. And it's difficult to really figure out which interest rate would apply to you. So ideally, go ahead and request um details from a few different lenders. Make sure they do a soft check, not a hard check. And this is very, very important because if they do a hard check every single time, then you'll see that these interest rates that are being offered are slowly getting worse, and there might not be a way to go back up the ladder and get the first rate you've requested. So really be careful about that. And I would say maybe talk to your banker. Maybe you're you're banking with a high street bank, maybe they have a history with you, they know that you're somewhat reliable, yet you pay your bills, then I think the chances are high that you'll get favorable conditions from them. And yeah, look for the dialogue, talk to your banker, uh, maybe even in person. I think that's that's where having a banker, you know, person to talk to in a branch is actually very favorable, you know, can be a huge advantage because they can they can help you access the best possible offer there with ease, typically.
00:24:23 · Jonny Pease
[00:24:23] S0: Do you have do you ever think about like when we talk about personal loans, you know, who's actually taking out a personal loan? I think we talked about this briefly, but when I think about loans, right, I find them very scary. Um I think about businesses borrowing to build, to grow, and in some cases, if you do it calculated, it can actually be an incredibly powerful way to grow a business. But when it comes down to loans, it just feels like personal loans, I should say. It just doesn't feel like a good decision ever. Like, when is a personal loan actually a good thing? I don't think it is, right?
00:24:56 · Jan Watermann, Jonny Pease
[00:24:56] S1: Yeah. Difficult. If if there's really no alternative for you and your washer breaks, let's say, then what are you gonna do? Car repair, you know, what you're gonna do? Yeah, there's certain things that you just have to have capital for. And um, if your homeowner of your renter and you own things, then appliances especially, they'll break eventually. It's just a matter of time. And if you don't have money um saved up in order to pay for the repair or potentially a new device, what are you gonna do? You gotta take out a loan, you gotta get money from somewhere. And I think in those situations, there's just yeah, no way around trying to look for external capital sources. But what you should never do is fund your vacation with a person loan or something, which is actually funny something that Revolut has been encouraging me to do several times. Uh, you can show an email on the screen, like literally um trying to sell me a loan for my vacation so I don't have to use my savings for it. Excellent. And I think that's yeah, that's something you should definitely not do. Um, that's our advice, but yeah, plenty of other things that you shouldn't do. Anything that's consumption related that you can avoid, just don't use external capital for that. Rather, save up some money, it'll feel better that way as well. [00:26:05] S0: Agreed. I'm rather disturbed by Revolut. Encouraging you to borrow money to pay for a holiday. Yeah, literally. And I'm getting so many examples. Has anyone got any other stories? [00:26:14] S1: I'm sure. I'm sure if that's it.