10 practical tips to help prepare yourself for the credit crunch

1. Don’t even think about moving house unless you really have to. If you must move house, don’t exchange contracts to buy until you have exchanged contracts to sell your existing property AND you have a confirmed mortgage offer in your hands. If you need a mortgage, this is the time to get the very best quality advice. Try this multi-award winning one here.



2. Credit card limits may well be reduced to help bank liquidity. It’s already happening in the US. If you have dormant cards, start using them occasionally as these are the easy targets for card companies. If you have only a few credit cards, get another now, as a contingency. Find the best one for you here.



3. If you’re lucky enough to have more than £35,000 in savings, make sure you split your savings between banks – each block of up to £35,000 will be covered by the government scheme that reimburses you if the bank fails. Make sure you check ownership of the bank carefully though, to ensure you get two institutions that are owned separately. It has been announced that the government will increase the scheme cover to £50,000 on Tuesday 7th October.



4. Consider moving your savings to government backed ‘state secure’ funds such as a Post Office Instant Saver account. This is run by the Bank of Ireland, and is backed by the Irish government which guarantees full protection.



5. If you have a mortgage with Bradford and Bingley, HBOS or Northern Rock, don’t panic – you won’t be tarred as a customer of the ‘Bank of Manure’ – but you do need to watch the interest rate you are being charged. It’s very possible you’ll be paying more than market rates. After checking for nasty penalties that might stop you doing so, remortgage when the time is right, but always get first class advice.



6. Make all purchases by credit card and not by debit card, so that any purchase over £100 will be covered by the Consumer Credit Act 1974 in the event that the seller goes down prior to delivering the goods. Particularly important for holidays, flights or anything ordered that you have to wait for.



7. Tighten up your finances generally. Work through our free advice for short term problems.



8. Check your credit report to make sure your file is error-free and that you are in the best possible place to apply for credit.



9. Use our free credit matching servicesto typically save £400 per year by switching to cheaper credit cards.



10. Look carefully at relatively expensive services you may not be getting full value from. For example, cancelling Sky+ and moving to a freeview PVR is a short term pain for a reasonably long term gain.

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