Martin Lewis shares bank account trick that could make you £200 before Christmas - but the timing is crucial

If you’re looking to make a bit of extra money ahead of Christmas, Martin Lewis has revealed a simple bank trick which could leave you £200 better off. However, there are certain rules which may prevent some individuals from trying it.

During his segment on This Morning, the financial broadcaster from Manchester, told viewers they can take advantage of the money offered by banks to simply switch accounts. While answering an audience member who queried whether it is a good idea, he responded, ‘you may as well go get paid, make some easy money just in time for Christmas’.

The audience member, named Amanda, also asked the money-saving expert how the switch would affect direct debit arrangements and benefit payments. Lewis said the process is usually ‘easy and hassle free’ but there can be complicaitons. “The system changed years ago,” he said. “We now have this seven working day switch service, so the switch will take around 10 days on average from the time you apply assuming you’re accepted to the time that you get through.”

Lewis, 51, noted the new bank will take care of any prior arrangements, including standing orders and direct debits with payments to the old bank ‘automatically’ forwarded over. When it comes to benefits, Lewis urged claimants to be careful about switching when a payment is due, and to err on the side of caution. ‘It’s also worth getting in touch with a benefits agency to tell it the new bank account number,’ he added.

Frequently switching bank accounts to take advantage of financial incentives, is known as ‘serial-switching’ and Martin notes it can make people ‘thousands’ but is not recommended for anyone applying for credit. “People in my office, in my team have made over a grand doing this, people have made over two grand doing it,” he said. “It can have an impact on your credit score though, doing that, so it’s only for people who aren’t about to apply for anything for credit”

Lewis explored the topic of bank-switching and credit further when addressing another member’s question. He added: The new bank account will do a credit search as long as its a bank account that has an overdraft facility.”

However, the savvy-spender stressed to the viewers not to get too fixated on credit scores as it isn’t a hard and fast rule. Let’s just go back to basics,” he said. “You don’t have a credit score. Nobody in the UK has a credit score.”

He continued: “You may have been given one by a credit reference company but that is just its loose indication of what it thinks the average lender - how they would see you.” Despite this, Martin warned viewers against switching banks if they are ‘one month away from a mortgage application’ or ‘applying to an important balance transfer credit card’.

“If you don’t have any plans in the next three to six months of anything you really need to do that’s important with your credit then I’d get on and do the bank switch,” he concluded.

Martin Lewis’ guide to switching banks

During the segment, Martin teased the idea of creating a ‘mule account’ to make switching easier. He added: “You make yourself a bank account you don’t really use and then you just use it as a mule from one to the other, making sure you meet their minimum criteria when you do it.”

He then listed a range of banks which offer the benefit of switching including Nationwide, First Direct, Lloyds. “You’ve got Nationwide at the moment it’ll pay you £200 and has a linked 8 per cent regular savings account you could put up to £200 a month in,” he said.

“First Direct will give you  £175 for switching to it, it’s got a 7 per cent linked regular savings account, a fee-free international card and has top rated for service so if service is important for you that’s a good one. Club Lloyds will give you £175 quid and a year of Disney Plus as part of the switch.”