Martin Lewis has issued a stark warning to Nationwide, Santander and NatWest banking customers after the recent announcement of £200 bonuses.
Nationwide, NatWest, Lloyd’s, Santander, and First Direct are tempting new customers with free cash incentives before Christmas, offering windfalls ranging from around £150 to over £200 – a potential welcome boost for the festive season, reports the Mirror.
The founder of Money Saving Expert issued a reminder that while lucrative cash bonuses for switching banks may seem appealing, frequently changing financial institutions can negatively affect your credit score.
Mr Lewis emphasised that frequently switching banks, even those offering attractive cash incentives such as Santander, Nationwide, and NatWest, can often cause more harm than good.
He explained: “If you do one switch, it’s an application on your credit file which has a very minor, short-term negative effect.
“Lots of those in a short space of time can be an impact. Banks also like to see evidence of longevity, so that’s also slightly negative.”
He also advised prudence if set to buy a house in the near future: “So I wouldn’t switch my bank account if I had a mortgage application during the next two months.
“Switching very regularly to make money can have a bigger impact.
“If you’re rejected, it could be for one of many reasons, for example… you’ve got a poor credit record, you’ve had past dealings with that bank where you’ve missed payments or the bank doesn’t think you’ll be a profitable customer.”
He continued: “Don’t assume because one bank doesn’t want you, none of the others will. All the same, don’t just apply everywhere as it can do more damage to your credit record.
“Instead, you need to do two things – first, ask the bank why it rejected you. Its answer may be vague, but it should tell you if you were rejected because of your credit record.”
