Money Saving Expert Martin Lewis has revealed how people can pocket as much as £1,700 by using a single bank account solely for earning money from bank switching bonuses. On his popular ITV1 and ITVX show, The Martin Lewis Money Show Live, he informed his loyal viewers about a completely legal method to make money from banks with an account dedicated exclusively to switching for freebies.
A viewer asked Martin on his show if frequently switching banks was detrimental to their credit score. However, Martin clarified that a credit score isn’t really beneficial unless you need to apply for credit.
One audience member queried: “I’ve switched my current account quite a bit. Will that affect my credit score in the long term? ” Martin enquired how much he had earned from switching accounts, to which the man responded “almost £1,000.”
The expert retorted: “Almost a thousand? There are a lot of people out there who switch bank accounts all the time. If you were to do one switch, this is for everybody, if you do one switch, well 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, and banks also like to see evidence of longevity, so that’s also slightly negative, so I wouldn’t switch my bank account if I had a mortgage application due in the next two months.”, reports the Express.
“Longer than that, I wouldn’t care. It’s only very minor and it doesn’t really have a hit.”
“Switching very regularly can have a bigger impact. Do you have a use for your credit worthiness? ” “[No? ] If not it will have an effect but why should you care? ” “People always think ‘oh it will hurt my credit score’, your credit score is the thing to use, if you’re not going to use it do what’s best for you to make money.”
Martin then asked his audience who else has used bank switching to make money multiple times, and heard from one man in the studio who had earned £1,700 from bank switches. He then explained how the ‘mule’ account works: “So. Lots of people are doing it, you have to be careful, you have to do it right, but yeah it’s worth doing.”
“If you are going to do it, one of the ways they do it is they have a ‘mule’ account. Which is where they set up a separate account just for switching bank accounts, make sure you have a couple of direct debits going to it, make sure you’ve got some money going into it, and then you use that, and you keep your normal account and you have a mule account for switching.”