Category Archives: Banking

If you’re looking for more information, help or guides on banking and bank accounts check out our articles in this category.

Bank Accounts – A Quick Guide

Find out more about bank accounts and find one to suit your needs.

In the most basic terms a bank account is a safe, secure and convenient place to store your money. But let’s face it – a bank account is so much more than just that. Having a bank account is very useful as it makes it easier for employers to make wage payments to you so you don’t have to take cash-in-hand (which, let’s face it, is on it’s way out along with cheques).

Most bank accounts come with a debit card so that you can withdraw money, make deposits, make purchases in shops and online, etc. In addition to this you can even pay bills directly from your bank account, either by setting up direct debits, online banking and writing cheques.

Whether you are looking for a secured loan, payday loan or even a credit card – almost all lenders will need you to have a bank account otherwise they won’t be able to grant you a loan. Unfortunately some people with poor credit scores can find it difficult to get a bank account, however, Creditwindow not only offers standard bank accounts but can also find one for people with poor credit.

What Bank Accounts Are Available?

Let’s take a quick look at some of the bank accounts available to consumers:

A Basic Bank Account

A basic bank account is essentially a regular account that you can have money paid into – such as wages or benefits. You can also pay cash and cheques in yourself as well as pay bills by setting up direct debits. You will also be issued with a cash card to use at ATM or “cash machines”. Many basic bank accounts may also give you a debit card to buy things online or over the counter, however, you will probably not be allowed to take out an overdraft on a plan such as this.

A Bank Current Account

A bank current account is slightly more sophisticated as you will always be granted a debit card so that you can shop online, from restaurants, retail outlets, etc. A cheque book and overdraft facility may also be given to you but the overdraft will be set at an agreed limit and you may face high interest rates if you go over that set limit. However, on the plus side, some current account have an interest rate attached to them so you could earn interest on your money while it’s in your account.

A Bank Savings Account

A bank savings account is simply an account to place money that you don’t want to spend straight-away – i.e. money you plan on saving for whatever reason. All bank savings accounts have an interest rate attached to them so that you can earn on the money that you’ve placed into the account. However, if you’re looking for a savings account that allows you quick access to your money you should note that the interest rate will probably be lower than a standard savings account.

The Costs Of Banking

In the vast majority of cases bank accounts are free to setup and maintain, however, there are some bank accounts that require a monthly administration fee. These bank accounts tend to be premium accounts that offer more services than a standard current account – such as high interest rates, insurance services, overdraft facilities, etc.

In some instances people with poor credit scores may only have a select number of bank account options open to them. Some of these banking options may also charge a small monthly administration fee to offer what a standard bank account would give to customers with good credit.

Have you got a poor credit score and struggling to find a bank account? Check out:

Image: Kittikun Atsawintarangkul / FreeDigitalPhotos.net

Finding the right bank account for your needs

Looking for a bank account to suit your needs? In this day and age it can prove difficult finding the right kind of current account for your personal requirements and each one undoubtedly offers different facilities, with different interest rates and charges. Managing your personal finances can prove difficult, which is why it’s vital that you choose a bank account that meets your needs.

So what are the basics that bank current accounts SHOULD offer:

The ability to withdraw money at any time of the day.
The ability to deposit money when needed.
Regular monthly statements.

A good bank account should also give you access to:

The opportunity to extend your line of credit with an overdraft facility.
The opportunity to add-on other extras such as credit cards.
Add-on high interest savings and ISA accounts if required.

When changing your bank account or if you’re opening a completely new account then you should be carefult as many banks may offer attractive introductory offers and benefits that may not continue in the long-term. It is certainly worth comparing accounts and shopping around for the best one to suit you.

Can I open a bank account with a bad credit history?

Find out how you can open a bank account even if your credit rating isn't so hot!

Suffering from a bad credit rating can be a difficult situation to be in, but the answer is yes, you can open a bank account with a bad credit history – simply apply for a bad credit bank account and you shouldn’t be turned down because of your credit rating. Just like any other account, you’ll need to prove your identity and address and you will need some documents to do so, such as a passport or driver’s licence.

Why you can’t open some accounts with bad credit

If you have bad credit, you could be turned down for a ‘standard’ bank account: you’ll need to pass the banks’ credit checks to open all sorts of accounts.

If a bank doesn’t like something in your credit history, they can turn you down.

If your credit history includes something more serious than a few missed payments – such as defaults, a CCJ (County Court Judgment) or bankruptcy – where do you go for a bank account?

Bad credit bank account

A bad credit bank account is another term for a basic bank account. There is no overdraft with an account like this but you can still arrange Direct Debits, use cash machines and pay in an income, pension or benefits. A bad credit rating won’t stand in the way of opening one of these accounts.

The bad credit, bank account from thinkbanking doesn’t require a credit check and is even open to undischarged bankrupts. You simply need to prove that you’re over 18 and resident in the UK. You can find out more about the bad credit bank account here: http://www.thinkbanking.co.uk/bad-credit/.

This type of account can also be suitable for people with a moderate credit rating – those who don’t have any really serious issues with their credit rating, but who may have been turned down for a standard current account elsewhere, or who may like the idea of a bank account with no overdraft facility.

Could Portable Bank Account Numbers Be On The Cards?

Numerous bank account customers are failing to realise the significant differences between interest rates, charges and special offers available from different High Street banks.

Unfortunately, when consumers do see better bank account services on offer they are failing to switch accounts to take advantage of better deals. It’s believed that they are reluctant to, due to the problems associated with changing banks.

Have you ever tried to? Switching current accounts can be a real pain as it means notifying service providers of changes to direct debits, changes to standing orders, etc.

According to the Financial Services Consumer Panel bank account holders would be more likely to switch banks for better deals if portable bank account numbers were introduced.

It is believed that fully portable bank account numbers would make it far simpler for UK consumers to move accounts should they wish to. It effectively means that any direct debits or standing orders already setup on an old bank account would automatically be transferred to a new account, thanks to the portable account number, saving you time, money and effort.

Consumer Panel member, Mike Dailly, commented:

“It’s only a matter of time before ‘trouble-free switching’ of current accounts takes-off in the UK, and consumer savvy bank customers start shopping around,

“Greater competition between banks and ‘trouble-free switching’ will drive choice and value for money for consumers.”

Mr Dailly added that “fully portable account numbers would be a great leap in the direction of greater competition as seen in the mobile phone industry.”

The call for portable bank account numbers has come after the Independent Commission on Banking made a very similar recommendation.

In spite of this it should be noted that changing bank accounts is still not that difficult. If you were to change accounts most High Street banks will call your current provider for a list of direct debits and standing orders so that these can be painlessly switched across. Portable account numbers would simply make this process even easier.

If you’re looking for a current account to suit your needs why not take a look at some of the excellent services on offer by comparing bank accounts in our banking section.

Banks Challenge New Payment Protection Rules

The main high street banks are to begin their High Court challenge of new rules set-out to govern the way in which payment protection insurance (PPI) must be handled.

PPI essentially covers any debt repayments if the policy holder is unable to work as a result of a long-term illness, accident or lose their job. However, it has come under heavy fire after research indicated that it had been mis-sold to many customers who would never be in a position to claim on the policy. Many other customers felt that they were pressurised into taking it out alongside a credit card or personal loan.

The challenge has come about since the British Bankers’ Association (BBA) launched a judicial review against the Financial Services Authority (FSA) and the Financial Omudsman Service (FOS) over new PPI regulations that came into force in December.

These new rules have been put in place to make sure that all customers are treated fairly, both when buying PPI and when complaining if the cover is mis-sold.

The rules basically dictate that loan and credit card providers who also offer payment protection have to talk potential customers through the main benefits of the PPI policy, rather than just providing them with documentation that offers information.

In addition to this the bank or lender have to provide clear evidence that the benefits of payment protection insurance have been explained to the customer if it was taken along with the extended credit.

However, banks have voiced their displeasure about the new rules relating to PPI policies sold before the new system was introduced.

The BBA released a statement that said:

“We believe the FSA is effectively creating a precedent which permits it to apply new rules to previous sales – even where those sales were regulated by other FSA rules.”

If you think you have been mis-sold payment protection insurance (PPI) then you should contact the Complaint Handling Service for help in fighting your case:

Banks still charging extortionate rates on overdrafts

Recent figures by the Bank of England suggests that customers are being crippled by the highest rate in overdraft charges since records began.

Financial experts throughout the UK have condemned these extortionate charges being imposed on customers who dip into the red on their bank accounts.

The figures released by the Bank of England yesterday shows that overdraft rates reached a whopping 19.09% back in October.

As a result the typical customer is actually being faced with repayments that are 38 times more than the 0.5% base rate set by the Bank of England.

Most shockingly, Lloyds, the bank that British taxpayers had to bail out back in 2008, are charging their customers 19.3% and, on top of this, requiring their customers to pay £5 per month on top of this just for the privilege of having an overdraft facility in place.

Financial expert, Andrew Hagger, commented:

“When an overdraft is unauthorised, you can understand the idea that you are charged when you go further into the red. But to ask to borrow money and then be charged these exorbitant rates is just very difficult to swallow.”

In spite of this there are a number of high street banks such as the Halifax who have realised that the charges they were previously imposing on their customers were ridiculous.

As a result a number of banks have changed the fee to a fixed charge should their customers go over-drawn. For instance, the Halifax are now charging a daily rate of £1 for being overdrawn with permission, or £5 per day on an unauthorised overdraft.

CreditWindow suggests that if you are facing these ridiculous charges on your overdraft now may be the time to switch to a different bank account. Alternatively you could consider dipping into savings or even using a credit card rather than going overdrawn and facing exorbitant charges.

Economic forecasters predict consistent recovery

The latest forecasts for the UK’s economy has indicated that the country has bounced back from recession and avoided a double-dip. With the Bank of England promising to keep interest rates low, this has come as a blessing to many people looking to borrow mortgage loans or credit cards but are likely to be an ongoing burden for investors and those hoping to save money.

Economic forecasters are suggesting that the economy will grow by around 1.4% this year and by a further 2.2% over the course of next year.

In spite of this, the Ernst & Young ITEM Club has suggested that Britain is expected to experience a “soft patch” over the winter months as the recovery’s pace loses it’s momentum.

Peter Spencer, Chief Economic Advisor for the club, commented:

“The economy is likely to slow over the winter following a surprisingly positive first half of the year but I think this will be a soft-patch, not a double-dip.”

Mr Spencer went on to say that the UK will probably have to wait until late 2011 before experiencing any significan economic improvement. However, he added that with rising unemployment, low wage growth and high levels of inflation the average British household is in for a tough ride.

The club went on to state that interest rates are unlikely to go up until 2014 which is inevitably good news for borrowers looking for mortgages, personal loans or credit cards. However, this isn’t good news for consumers looking to save money as interest rates on savings accounts will remain low.

Cheque usage drops in favour of debit cards

More and more people are turning to cash or their debit and credit cards over cheques, which are due to be phased out over the next 8 years or so, with a target date of October 2018.

The report suggested that cheque usage dropped by well over £21 billion, which is down by a tenth over the second quarter of 2010, compared to the same period in the previous year, as more people switch to faster and more convenient methods. In spite of this, credit card spending wasn’t as strong as expected over the second quarter, which rose by around 3.9%, which is barely ahead of the inflation rate.

With bank transfers becoming instant and chip and pin debit cards making it even easier for consumers and businesses to access funds quickly and with a minimum of fuss this report suggests that a key change to the way people pay for goods and services.

Sandra Quinn, Director of Communications for the Payments Council, commented:

“Cheque usage is shrinking dramatically, while credit cards hold less appeal for consumers and businesses.

“We use cash less where there is an easy alternative, but we’re years away from cash falling out of fashion. Debit cards are taking over our daily purchases, while Faster Payments are fast becoming how we transfer our money electronically.”

In spite of this, Ms Quinn added that the overall payment figures suggest a “distinct lack of energy in the UK economy.” She went on to say that although economic recovery is underway, the total values of payments are not indicative of a strong growth.

Five pound notes to be added to bank ATMs

A fragile economy has brought about changes to the way in which we view and handle our personal finances. With personal credit card and loan debt still rife throughout the UK many people are continuing to be frugal with their spending.

It appears that the Bank of England has come to realise that and all banks and building societies are now stocking their ATMs with £5 notes.

The current scarcity of £5 notes means that they change hands many more times than other notes before returning for sorting. This coupled with the increasing wear and tear, in contrast to other notes, makes them less suitable for use in ATMS.

Consequently the Bank of England is to ensure that higher quality £5 notes are going to be made available to banks and building societies for use in their ATMs, as part of it’s reforms to the cash note circulation system.

ATM operator, Link, has stated that the higher quality £5 note is a pre-requisite to stocking bank ATMs with five pound notes and also means that better quality notes will be entering public circulation.

Group urges stricter control over payday loans

Banks are being urged to offer affordable short-term loans as alternatives to the more expensive payday loans, by consumer watchdog, Consumer Focus.

According to the group the total number of people taking out high interest payday loans has quadrupled over the last few years. The study shows that around 1.2 million people have borrowed over £1.2 billion in loans.

Consumer Focus added that better safeguards need to be put in place to help protect customers from spiralling payday loan debts.

Financial Services Specialist, Marie Burton, commented:

“With the credit crunch, demand for short-term borrowing has significantly increased despite the eye-watering interest rates charged by some payday lenders.

“Such expensive rates can leave consumers who defer payments, or take out repeat loans, caught in a debt trap.”

In spite of this, Ms Burton added that the group does not agree with calls to ban payday loans as outlawing them could leave many borrowers vulnerable to the likes of loan sharks. However, she added that safeguards to protect borrowers needed to be put in place to prevent them from becoming too dependent on this form of high-interest credit.

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