Electricity isn't cheap but we’re finally being told we can expect some lower power prices this year, thanks to wholesale rates dropping by about 50 per cent since 2022. However, hardcore money-savers aren’t sitting around waiting for their bills to go down.
Instead, they’re exploiting a relatively common loophole to score free electricity. I call them the “credit collectors”. This is how they’re doing it and why energy retailers are powerless to stop them.
Since power prices spiked in 2022, genuinely cheap electricity plans have been almost impossible to find. But retailers still need to attract new customers and keep their current ones, so a number of them have been offering upfront credits.
At the time of writing, there were deals from Simply Energy ($200 credit), Origin ($150 credit), and AGL ($150 credit). Previous deals included Simply ($300), AGL ($250) and Powershop ($150).
What dedicated money-savers know is that lock-in contracts and exit fees are now almost unheard of in the energy market. Usually, you’d have to wait until your first quarterly bill to receive the credit. But now, once you’ve used the free electricity, there’s nothing stopping you from leaving and claiming another credit with another retailer.
It’s like taking honeymoon after honeymoon. (You have to be careful with financial products, such as credit cards, because too many credit requests will look bad on your credit report, but many utilities don’t do a credit check, especially for pre-paid plans.)
Power companies know it’s possible to do this. They also know most people couldn’t be bothered. But these credit collectors are not ‘most people’. For them, saving money isn’t just a necessity in a cost-of-living crisis. It’s an Olympic sport.
At online bargain-hunting sites like OzBargain, and Facebook groups such as Markdown Addicts, expert penny-pinchers share deals and strategies for spending as little as possible on bills. They alert each other when a credit offer is ending or a new one has launched, because these deals constantly come and go.
Sometimes, credit offers require you to be a member of a motoring club or a customer of a bank, but there are often loopholes, which these online ‘hive minds’ are very good at finding.
One of them (no one uses their real name) recently described how they’d scored months of free electricity by jumping from credit offer to credit offer: $300 from Simply, then another $250 from AGL, then whatever pops up next.
I’ve known others to do the same thing with their health insurance, where ‘new customer’ offers can be as high as six weeks free or $450.
And they’re giving telcos a hard time too. Many now offer 50 per cent discounts for the first six months on mobile and NBN plans, which are some of the easiest products to switch - along with energy plans. Switch twice a year and you can get your mobile and NBN half-price.
A few things to keep in mind:
If you’re not going to switch as soon as the credit expires, make sure you check the rates are competitive
Look for deals that don’t do a credit check if you’re switching multiple times per year
Some retailers won’t let you collect more than one credit from them per year
Make sure you know what your cover includes before switching insurances
Switchers get the best deals as a rule but, sometimes, your current provider will make you a killer offer to stay. Either way, you win!