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Take on Christmas credit card bills

Shift your credit card debt to 0%, Santander 123 drops interest rate warning, self-assessment tax deadline, free eye test and get your travel insurance ASAB. These are our Money Saving Expert Martin Lewis’ Tips of the Week.

Remember, deals can change quickly, even while I’m on the programme. So always double-check the terms and conditions before spending. Plus, while I hope these deals will save you cash, don’t spend if you can’t afford it, don’t need it, or won’t use it.

Take on Christmas Credit Card Bills - shift debt to 29 months 0%

This is the week when many who spent in the run up to Christmas on credit cards find out the damage. If you're dreading this month's bills dropping through the letterbox, don't wait to deal with it - that just means interest will keep accruing.

The priority is to stop new borrowing, find free money to increase repayments and try to reduce the interest you pay. This means more of your repayments clear the actual debt rather than just cover the interest, so you can be debt-free quicker. If you pay interest on a credit or store card debt, consider a balance transfer card. It’s where you get a new card to pay off debt on other cards, so you owe it instead, but at 0%.

The length of top 0% deals is shorter than a year ago, and I don't see things improving, so if you've debt to shift, it's best to act quickly. The impact can be large, as Sarah discovered: "@MartinSLewisGot your email today, it reminded me to balance-transfer - I'm now saving £60 a month [£720/yr] in interest. Thanks."

To find the best card don’t just apply willy-nilly though, use an eligibility calculator to see whether you’re likely to get accepted first, without it impacting your credit file. Many card firms now have these, or you can use Martin’s balance transfer eligibility calculator which shows your odds of getting most top cards.

Out of the top cards: the joint longest 0% card is from Sainsbury’s Bank giving up to 29months 0% with a one-off 2.74% fee (min £3). But as it’s an ‘up-to’ card, some who are accepted can get a far shorter 0% than advertised. Alternatively Virgin Money is also giving 29 months 0%, with a slightly higher 3% fee but crucially it isn’t an ‘up to’, meaning if you’re accepted you’ll definitely get the full length. Or Barclaycard is up to 28months 0%, with a 1.75% fee, but if transferring over £2,500 you also get £20 cashback. The longest no-fee card is Santander, giving 18months 0%.

And remember if you are balance transferring, always follow my balance transfer golden rules…

a) Clear the debt or shift again before the 0% ends or you'll pay the rep APR – 19.9% Sainsbury’s, 21.9% Virgin Money and Barclaycard, 18.9% Santander).b) Never miss the min monthly repayment or you can lose the 0%.c) Don't spend/withdraw cash. It usually isn't at the cheap rate.d) Usually you need to do the transfer within 60 days to get the 0%.

Santander 123 account is now a dead duck slashing interest to 1%

This week Santander announced massive changes to its popular 123 and 123 Lite current accounts. And for most that means it will become a dead duck. From 5 May here’s what’s happening…

The interest earned will drop from 1.5% AER to 1% AERon balances up to £20,000, meaning the maximum amount savers can earn from the account will drop by around £100 per year. Cashback on household bills will be capped, at a maximum of £5 per month for each bills category. Currently, the account pays 3% on phone, broadband, mobile and TV bills, 2% on gas and electricity, Santander home insurance and life protection, and 1% on water and council tax. But from May, this will be capped at £5 cap for each tier – so a maximum of £15 cashback per month.

Santander mortgage customers can also currently earn up to an extra £10/month cashback (1% on the first £1,000 of the mortgage payment). After the changes, mortgage cashback will be included in the cap for the '1%' tier. Plus like many other banks Santander has announced that from 6 April it’s hiking its arranged overdraft fees from charging £1-£3/day depending on how much you’re overdrawn to charging 39.9% APR - which is fast becoming the new normal rate for all banks, on the back of the FCA’s regulation changes. The overdraft hike will affect most of its accounts not just the 123.

For most now Santander 123 is now a dead duck current account. There’s little reason for anyone to stick to it. Instead once the Santander interest rate drops, you can shift your savings to a better-paying account. The top easy-access savings account right now pays 1.35% with Marcus Bank, or if you don't need immediate access to your cash you can earn up to 1.65% with Money Box’s notice account or 1.7% for a one-year fix with First Save. Then either grab up to £175 free shifting to a top current account like First Direct or HSBC or move to the Santander 123 Lite account, where you pay just £1/mth for the same cashback.

Martin’s quickies:

Self-assessment deadline warning – sort it NOW. If you’ve been sent a self-assessment tax return or received notification that you need to fill one in, you must complete it online by 11.59pm on Friday 31 January and pay any tax due (the paper filing deadline has long past – that was 31 October) or you face a £100 fine plus interest on any underpayments.

At the start of the month there were over 5 million taxpayers who needed to file an online self-assessment tax return but hadn't yet done so. Yet if this is your first time doing it, then technically you should have registered to file a self-assessment by 5 October 2018, but luckily HMRC says you won't be fined if you register now, as long as you file the tax return itself before the 31 January deadline.

After you’ve registered you’ll receive an activation code and your Unique Taxpayer Reference (UTR) by post, but the letter can take up to 10 working days to arrive, so that means you need to request one ASAP. Also, try not to leave filing your return until the 31st deadline, as chances are the phone lines will be extremely busy if you need to contact them.

Free £20ish eye test at Specsavers: Currently you can get a voucher for a free eye test (norm £15-£25) at participating Specsavers stores until 31 March. First, go online to Specsavers booking page and enter your postcode to see a list of local participating stores – once you’ve selected your store you should then see the free eye test voucher (you may need to scroll down). You’ll need to book the test online or by calling your branch. It's worth mentioning the voucher when you book. Some stores will only give a free eye test when you buy a pair of £69+ glasses, so check if the voucher includes this requirement first – if it does, the voucher will clearly state, ‘Free eye test when you buy a complete pair of glasses’.

Remember though some in England, Wales and Northern Ireland can already get free eye tests through the NHS (eg if you’re over 60, under 16 or under 19 and in full-time education, have diabetes) or through employers’ schemes. Everyone in Scotland gets free eye tests.

Booked your holiday? Get your travel insurance ASAB (As Soon As you've Booked): January is the biggest holiday booking month, and if you’ve just book yours, make sure you’ve sorted your travel insurance out too. You need cover from the moment you go, yet far too many people book a holiday and then leave the cover until later. Sadly too often I hear stories like “I’ve just been diagnosed with cancer, I was due to go on holiday in six weeks, but now need chemo. The airline won’t refund my ticket, what can I do?” The unfortunate answer is not a lot. You're only covered for cancellation if you have insurance BEFORE an illness/injury, job loss, jury service call-up etc. So whether going away soon or later this year, buy ASAB. There are many cheap, decent value policies available online and via comparison sites from as little as £9 for a no-frills year’s European cover for an individual. If you go away two or more times a year then annual policies usually win.

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