FOOL'S EYE VIEW
Take the Foolish Financial Detox, Part II!

By Alison Hunt (TMFAlly)
January 19, 2006

If you happened to follow the first part to the Foolish detox last week, you'll probably already have sorted out the best deals for your mortgage, insurance needs, pension and energy bills and will be happily saving a fortune! So if you're all set for part II, here goes:

1. Beef Up Your Credit Card

Take a look in your wallet -- how many credit cards do you have? Do you use all of them? Do you pay an annual fee for any of them? Or don't you know? Make an effort to find out what you're getting from your credit card; remember there is a lot of choice out there so it's up to you to choose the card that offers you the most.

Cashback credit cards

If you always pay off your balance in full, each month, why not choose a cashback credit card? By picking a card such as the American Express Blue card you can earn 0.5% on spending up to £2,000, and 1% on all spending after that. Put all of your spending on the card (groceries, petrol, clothing etc) and you'll be amazed how quickly your cashback adds up -- providing a healthy cheque at the end of the year to spend as you please! Find out which card will suit you best from our cracking cashback credit cards.

Credit Card Freebies

And cashback isn't the only way to go. There are a number of cards on the market offering a wealth of credit card freebies, including free shopping vouchers for stores such as Boots, WHSmith, and Debenhams, Sainsbury's and Tesco. Take out a Marks & Spencer card and not only can you earn double points towards free M&S shopping vouchers, but any furniture you buy with the card will be charged at 0% interest for two years (provided you spend over £1,000).

And if you take out a Morgan Stanley card you will be entitled to shop through it's Savvy Deals website, giving 50p off any CD purchased from CDWow (£1 off any DVD or game), 25% off RAC membership, 10% off at The White Company and 5% off at Boots, WHSmith, Dixons or House of Fraser, amongst others.

0% for New Purchases

Alternatively, take out a 0% card for new purchases, such as that offered by the Nationwide BS card. Put all of your normal spending onto the card, and stash the money into a high paying savings account. As long as you ensure you make the minimum payment each month (set up a direct debit to be sure) you won't have to pay off the balance for nine months -- giving you nine months' worth of interest on that cash.

Balance Transfer Cards

If you currently have a balance on your credit card that you're paying interest on, why not move it to a 0% card for balance transfers? Take out the Halifax One card and you'll get a whole year to pay off that debt, interest free. However, make sure you transfer the balance and then do not use the card for further spending -- many providers will use your payments to pay off the cheapest debt first. This means that although you think you've cleared your new spending balance, that money was used to pay off your cheapest debt, namely that being charged at 0% -- so you will be racking up interest.

2. Slash your Broadband charges

According to uSwitch, not switching broadband supplier could be costing us over £40 million, each year! With an estimated 9.8 million households connected to the Internet in this way, broadband is clearly big business -- and an estimated one million people signed up in the first quarter of 2005, alone. And as contracts usually last for 12 months, a lot of people will be coming up to be able to renew their deal, about now.

Have a think about your broadband use. Do you regularly play online games, download music and video or make Internet phone calls? Or are you more the occasional surfer and email user? Make sure the connection speed you have is the right one for you, or you could end up spending far too much. Check out the ADSL guide website and find out which provider offers the best deal for you (or if you would be better of simply altering your connection speed with your current provider, and save a fortune each year.

3. Cut the Cost of Calling

How much is your phone bill, each month? Cut it down to size by taking advantage of the many cheap calling methods available. To begin with, take a look at your last phone bill and note down when you make the majority of your calls, whether they're to landlines, international numbers or mobiles, and what their duration is.

Call1899

If you usually call landlines, companies such as 1899 will simply charge you for connection, regardless of how long your call lasts -- currently charged at just 3p. All you need to do is set up an account with a credit/debit card and dial 1899 before the number you wish to call. You can also use 1899 to call international numbers (calling a US landline costs just 1p/minute) and mobiles for just 3p/minute at weekends, or 10p/minute at all other times.

Mobile Phones

The cheapest method of calling mobiles is by using your mobile phone's inclusive minutes. If the mobile you're calling is on a different network, make sure your mobile includes cross network minutes. If you frequently need to call friends and family on alternative networks, do a quick check to see how many people are on each network. If one network is a clear winner, you may find it worth your while switching - especially if you fancy a shiny new phone too (remember, you must usually have completed a 12 month contract to be able to cancel, penalty-free). And remember, texting is a great alternative if your message is short and sweet.

VoIP

Finally, broadband users can get the best deal of all -- completely free calls to other broadband users all over the world using the voice over Internet protocol. Sign up to Skype, VoIPCheap or Vonage and get your friends to too. Then, by downloading the free software and using a simple headset, you can chat to your friends all over the world, absolutely free! Alternatively, you can dial landline numbers from your PC for a small fee.

What's more, Tesco is now getting in on the act and is launching its own, low-cost Internet calls service. Calls to other Tesco Internet phone users will be free, and customers will be able to purchase an Internet phone pack in store for £19.97, which contains a phone, installation CD, guide and £5 of free airtime. This airtime can be used to call landlines in the UK, Australia, USA, Canada, France for just 2p/minute and users can dial UK mobiles for 10p/minute - with any subsequent top-ups earning Clubcard points, too.

4. Hammer down your Satellite TV fees

If you regularly spend a fortune on your satellite TV subscription, it's time to take a closer look at what you're getting. Most of us opt for extensive packages when signing up to a provider, as special deals are offered at the time. However, these deals rarely last, and often leave unsuspecting consumers with direct debits of £50 or more being snaffled from their accounts, each month.

Note down the channels you regularly watch, and how much TV you watch each day. If you'd really like to save some money (and improve your interpersonal skills!) it's time to cut back. By reducing the channels received (switching to a basic package) you can save a fortune each month, especially if you are currently signed up for the film and sports channels. Alternatively, cancel your contract and buy a Freeview box instead -- you'll receive up to 30 channels for the price of the box!

So there you have it, another four ways to carry out your financial detox and save yourself some serious cash - go on, get to work!

> Compare credit card deals | Detox Part I