Monzo and your credit card strategy

Financial Chat
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Never used a credit card but potentially going to switch to a using an Amex reward card, just seeing how people use Monzo and their credit card together?

Just swapped my legacy to Lloyds (it was for the £125 bribe, but noticed it pays 1% on 1-4k and 2% on 4-5 k balances so ~£60 year so worth using whilst the next decent bribe comes along)

Things I’ve got in my mind to consider.

Direct Debit for credit card (full, or minimum + pay manually, or no DD at all just pay in full manually).

If pay manually, I’m assuming it will skip debiting if bill is paid in full early, but then need to be on it to avoid minimum also being taken if too close to debit date and have balance to cover this scenario.

Keeping enough balance ready for DD to collect, or transferring before the pay date, or just manually pay in full if I’m going to do that.

Salary into Lloyds or Monzo (take advantage of paid early)

Ditch Monzo, and use Lloyds for Debit card purchases (ATM/non Amex merchants)

Ditch Lloyds (close fully, or keep open for burner, however some switch deals require min two DDs or salary paid so not ideal).

Just thinking aloud but I can see the following to pick from:

DD payment for full amount

Option 1

Salary into Lloyds

Keep £5,000 in Lloyds, for DD/reoccurring and DD credit card bill (set to full amount).

Move anything above the £5k over to Monzo.

Keep £250 in Monzo for ATM/non Amex merchants.

Everything else into Starling > Marcus

Spend monthly on CC and Monzo.

Option 2

Salary into Monzo 

Transfer so max £5,000 into Lloyds, for DD/reoccurring and DD credit card bill (set to full amount).

Keep £250 in Monzo for ATM/non Amex merchants.

Savings to Starling > Marcus

Spend monthly on CC and Monzo.

Option 3 (Ditch Monzo)

Salary into Lloyds

Keep £5,000 in Lloyds, for DD/reoccurring and DD credit card bill (set to full amount) and for ATM/non Amex merchants.

Transfer all extra to Starling

Savings to Starling > Marcus

Spend monthly on CC and Lloyds Debit card.

Option 4 (Ditch Lloyds)

Salary into Monzo 

Transfer £1,500 into Lloyds and back out (avoid £3 month) or close.

Keep £5,000 in Monzo, for DD/reoccurring and DD credit card bill (set to minimum amount) and £250 for ATM/non Amex merchants.

Savings to Starling > Marcus

Spend monthly on CC and Monzo.

Pay in full manually (DD for minimum amount in case I forget)

Option 1

Salary into Lloyds

Keep minimum in Lloyds, for DD/reoccurring and DD credit card bill (set to minimum amount).

Transfer all extra to Monzo.

Keep £250 in Monzo for ATM/non Amex merchants.

Savings to Starling > Marcus

Spend monthly on CC and Monzo.

Withdraw from Marcus and manually pay CC bill with Starling

Option 2

Salary into Monzo 

Transfer minimum into Lloyds, for DD/reoccurring and DD credit card bill (set to minimum amount).

Keep £250 in Monzo for ATM/non Amex merchants.

Savings to Starling > Marcus

Spend monthly on CC and Monzo.

Withdraw from Marcus and manually pay CC bill with Starling

Option 3 (Ditch Monzo)

Salary into Lloyds

Keep minimum in Lloyds, for DD/reoccurring and DD credit card bill (set to minimum amount) and £250 for ATM/non Amex merchants.

Transfer all extra to Starling

Savings to Starling > Marcus

Spend monthly on CC and Lloyds Debit card.

Withdraw from Marcus and manually pay CC bill with Starling

Option 4 (Ditch Lloyds)

Salary into Monzo 

Transfer £1,500 into Lloyds and back out (avoid £3 month) or close.

Keep minimum in Monzo, for DD/reoccurring and DD credit card bill (set to minimum amount) and £250 for ATM/non Amex merchants.

Savings to Starling > Marcus

Spend monthly on CC and Monzo.

Withdraw from Marcus and manually pay CC bill with Starling
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Well, you’re certainly covered all bases :grinning:.

Just one comment - don’t intermix your DD and manual repayment. Trust the system one way or another.

Oh - a second comment. If you can, stay out of any credit debt which you can’t pay off each month. it’s strictly an instrument for short term credit.

Beyond that, use your plan to budget your income.
Just some suggestions…:slightly_smiling_face:

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Having a “pay minimum” DD can be good for people who aren’t “on” their finances and perhaps aren’t used to checking the account very often.

Personally, I tend to pay my Amex card off once a week (ish) - So I never have to worry about DD’s or missing payments.

As for the rest, it really comes down to how many accounts you want to have to think about.

I like the Monzo app for ease of bank transferring to new people and instant notifications on incoming bank transfers.

As a spending card, it’s very rarely used, as my Amex is accepted in most places I shop.

If your Lloyds account is open because it’s your only “high street” account, and it’s your longest standing financial relationship, I’d probably keep it open (although it’s not a necessity).

If you have other options and the Lloyds account isn’t adding anything to your life, I’d ditch it.

Other than that, it’s down to how you want to manage it :slight_smile:

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Thanks, well I think the pay in full DD is probably best, I’m not going to exceed £5k with monthly+bills so thats a safe amount.

Looking at the figures I’m not going to be getting enough in interest in Marcus for having to transfer in and then back out and make the payment manually or topping up balance for enough for the DD in full.

I could go with Option 2 and paid into Monzo but I don’t no if its worth the hassle to paid back into where the DD/s and bills are coming out from. I could use Monzo for bills. It means slightly more faff collecting the bribes if they require a couple of DDs or incoming payment. However I think Monzo has the nice warning if DDs aren’t able to be paid and retries I think?

Option I is def less faff and worry about transferring, as if I did nothing I’d still have my bills and CC paid from incoming salary.

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The Lloyds is just being born switches in a few days time. :baby: . I use my legacy to hoover up switching incentives usually two/three a year so its worth a few hundred quid each year to keep open. The cheque imaging in app will come in handy, but I’ll switch it away when theres another decent amount I can claim.

It’s also handy I guess in making sure you have your bank reported to all the CRAs so I should probably keep it for that reason.

I could do this and roll with not having DD at all. Just requires always remembering to make sure its back down to 0.

From what I’ve heard Amex also has instant transaction notifications? :crossed_fingers:

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It does - I find the Amex app the best and most stable of all top be honest.

The notifications also happen in the iOS Wallet (or the Amex app, your call).

I personally wouldn’t have Monzo and Starling as my only current accounts - I’d much rather have a High Street account on the books as well.

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Excellent. Yeah instant transactions is the one feature that makes fintech banks decent in knowing where you stand and alerting you as soon as something dodgy.

I could go with Tandem (or Tymit/Jaja if they ever get out of beta or Starling Credit Card if it appears this xmas :eyes:) but it would just be for the protection and no/low cashback.

I just need to pick Amex Platinum Cashback or Amex Nectar I think.

Both look even stevens in cashback amounts, the other being the Amex Platinum Cashback Everyday with no fee, but looks like if you use at least £10k a year it works out better with the other. So unnecessarily confusing.

Yeah I’ve always rocked Monzo/Starling and Legacy. Helps for paying in cash/cheques and reporting to CRAs that you actually have a bank account.

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I have Monzo as my “main” account, had salary paid there, pay my rent and bills from there.
Have Amex as spending card, pay everything I can with it, and pay it in full each month by DD from Monzo.
Have also Starling as back up account, and to withdraw money while abroad.
Have Natwest current account, now empty, but I have had it for more than 10 years so I will keep it for my credit score.
Have Natwest credi card as back up, but I want to replace it for a Visa card with either Jaja or Tymit.

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