Is my financial setup too messy? What should I close before my next car?
Posted by 4LF4LL70@reddit | AskUK | View on Reddit | 18 comments
Hey all,
Looking for some advice on getting my finances in order before my next car and also just to keep a clean and stable financial profile long term.
I moved to the UK in 2022, so my credit history here is still relatively short. I initially opened a Lloyds Bank account when I arrived and in 2023 I switched my salary to HSBC, which has been my main account since.
Right now my setup feels a bit messy:
Bank accounts:
1. HSBC (main / salary / spending)
2. Lloyds Bank (barely used)
3. Monzo (spending)
4. Revolut (rarely used)
Credit / finance:
1. Barclays credit card
2. HSBC credit card
3. Klarna
4. Argos card
5. PayPal Credit
Credit scores:
TransUnion: 620
Experian: 1080
I’ve never missed a payment on anything, and I always keep my credit utilisation relatively low.
Car situation:
I’m currently on a PCP at 12.9% (yeah, not great! I didn’t do much research at the time and thought it was expected as I’m relatively new to the UK). It’s about £25k on a £32k car. The term is 4 years, but I’m planning to hand it back around year 3 rather than paying the balloon.
For my next car (around Feb next year), I’m thinking of either HP or a personal loan as I’m looking for something I’ll likely keep longer.
Main questions:
- Are things like Klarna, Argos card or PayPal Credit hurting my chances for better finance rates?
- Is it better to reduce the number of open accounts or keep them for credit history?
3.. Would having multiple current accounts matter to lenders? - Should I consider moving my salary back to Lloyds, or does it not really make a difference (Lloyds vs HSBC)?
Just trying to build a clean, stable financial profile long term, not just for the car.
Appreciate any advice 🙏
dan-kir@reddit
I have no experience of buying cars, just a few thoughts though:
Don't close your current accounts as I think your longest held current account helps your credit score, if you really did want to close bank accounts, close newer ones. Having said that...
It's good to have more than one bank account, because sometimes banks have issues and it's good to have a backup account you can use.
if you move your salary to Lloyds and upgrade to a club Lloyds account you can get free 6 cinema tickets every year, free Disney+ or a free magazine subscription
4LF4LL70@reddit (OP)
Hey, thanks for the response! Appreciate it. Yeah you are right, I won’t be closing my main accounts especially Lloyds since it was the first one I opened.
Was actually wondering if I should close Revolut though. 🤔🤔
And thanks for the tip, I’ll probably look into upgrading to a Club account as well. Feels worth it for £5 a month!
dan-kir@reddit
I've had the club Lloyds account for years and never paid £5 fee because my salary goes in (every month you pay £2000 in the fee gets 'charged' then automatically refunded).
If you salary is lower than £2000 you can still satisfy this. E.g. say your salary is £1500, the day you get paid you can send £500 to your Santander account, then immediately send it back to Lloyds. That's £2000 going into your account in total.
4LF4LL70@reddit (OP)
Hey that’s actually a really good shout. Makes the Club account a no brainer then if the fee just gets refunded. I should be able to hit the £2k anyway, but good to know there’s a workaround as well… Thanks a lot!! ♥️
Mammoth-Passion-413@reddit
Got an Experian score better than mine and I have lived here all my life! LOL
4LF4LL70@reddit (OP)
Haha I’ll take that 😂 probably just got lucky to be fair.. 🙉
bars_and_plates@reddit
Having loads of accounts is not an issue at all, it's a bonus, it improves your ability to handle things if SHTF e.g. HSBC has an outage or they decide that your payment to bet365 is an AML risk and lock you out for a bit.
The main thing that comes to mind to me is actually not that 12.9% rate but that 32k on a car is a lot. If you're on a high income it might be reasonable but I suspect this might be a bit of a status thing rather than a sensible economic decision.
4LF4LL70@reddit (OP)
Hey, appreciate the detailed reply! Some good points there.
It’s not really a status thing for me though. I’ve always been into cars, like properly into them. Used to do a bit of racing back home as well so for me it’s more about the driving side of it than anything else.
I’m not really into luxury or showing off, it’s all about my satisfaction. I just enjoy good cars, B roads, road trips that sort of thing. So yeah my choices probably don’t look the most sensible on paper 😅
That said, I do get what you are saying about the numbers, I’ll probably sit down and run through it properly before making the next move.. thanks so much! 🫶🏼
yes1402@reddit
I am not an expert, but I have read somewhere that is it NOT advisable to open or close an account or credit card 6 months to a financial move like buying a new car with finance.
I will say for now, make sure credit utilisation is low. Pay off everything at the end of the month. Preferably, wait for the statement to be raised, then pay it off 2 days later. In that way, it reports as a debt. But then also reports as paid in full
4LF4LL70@reddit (OP)
Thanks for the tip, really appreciate it. I wasn’t aware of that. I hardly use my credit cards to be honest, mainly just for fuel to keep my credit history active and I clear them in full every month…
Dan_tull@reddit
I also have a chaotic set up but it works for me (account for salary & direct debits, joint account for household bills, revolut for “fun money”)
I am mainly commenting to suggest you look in your Lloyds app for car refinancing - you’d get a lot lower than the 12.9% with them and it’s very straightforward to do. I’ve recently done this when the dealer wouldn’t accept 3rd party financing so I bought it with theirs and refinanced with Lloyds a week later. I think mine is 6.9%
4LF4LL70@reddit (OP)
Hey, thanks for the input! Really appreciate it. I actually looked into this about 6 months ago and checked with Lloyds, but it didn’t go through. That’s partly why I’m now thinking if it’s worth switching my salary account over to Lloyds. 🤔
a-liquid-sky@reddit
Head on over to r/ukpersonalfinance
mdmnl@reddit
I was pipped at the post...
4LF4LL70@reddit (OP)
Thank you I will! 🙏
mdmnl@reddit
r/UKPersonalFinance/
I'm sure they'll have general info and maybe people to give more specific advice
4LF4LL70@reddit (OP)
Thanks so much! Will do! 🙏
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