Consumers should not be loyal to their bank, expert says

Consumers considering changing their current account provider have been advised to stray from their present bank by one expert.

According to Defaqto, a financial data collection and research company set up in April 1994 to provide comprehensive and up-to-date product information to the financial services industry, the January sales in the current account market are a brilliant time to make a change.

However, the organisation did also warn that January can be a confusing time for consumers looking to make a major financial change due to the variety of offers and products advertised.

It recommended thoroughly researching the different current account options in order to find the best deal on the market.

Banking specialist at Defactor David Black said: "With credit cards, if you have a good credit rating, and with savings, if you have got some savings to invest, you're much better off not being loyal to anyone, because of all the introductory offers around."

He explained that harbouring a sense of allegiance to one bank because of the length of time a consumer has held an account with them is a sentimental approach to money management – and not a tactic that makes good financial sense.

One bank that was keen to cash in on new customers during the January sales was HSBC, which offered discounts on current accounts, special offers on the HSBC's Fixed Rate Saver and up to 50 per cent off insurance premiums.

Meanwhile, investors could save up to 75 per cent off the initial charge on a lump sum investment into one of a range of HSBC's investment funds, including HSBC World Selection.

American Express's Platinum Cashback Credit Card also tried to entice new business by offering five per cent cashback in first three months up to £100 up to 1.25 per cent after that, no annual fee and a typical 19.9 per cent APR variable rate.

Mr Black advised consumers not to be lazy and only consider their current bank's special offers and advocated shopping around.

He said: "There are introductory bonuses in the case of savings – take advantage of them and jump ship elsewhere when the bonus ends.

"With credit cards, on the zero per cent purchases and balance transfer offers, some of the rewards are stacked up in an introductory way, like American Express' first three months on their cashback credit card."