Switching Bank Account. What Bank is best?

johnerz

Hi
I have been with TSB since I opened my first account at the age of about 15, I have been a loyal customer for 18 years.
I have £4k of debt that I want to get on 0% or low interest card so that I can clear the debt and be debt free (other than the mortgage) by the end of the year.
TSB refused me an interest free credit card as I didnt have the required credit score. I had a credit card with them 1 year ago without problems!!

I arranged to see an advisor at my local branch to explain my situation. The chap basically said its tough luck re the TSB credit card as I have credit cards with a £13k limit and another with £5k. He said it is effecting my credit score as it seems that I have potentially high debt due to the high credit limits, even though I dont use them to the limit (for obvious reasons).

I explained my plan to get rid of the cards and pay off my debts within the year etc, the chap then tried to sell me a 60 month loan for £7k to get 7.9% interest rate saying that I could pay it off early and benefit from the rate. He then tried to sell me home insurance that was double what I am paying now, saying that TSB gives better benefit. How could he try to put me in potentially more debt in the current economical situation?? It seemed to me that this was just obvious salemans tactics to get his commision/reach his targets regardless of my situation and requirements.

After being with TSB for so long it has really annoyed me that when I really need them they are not there to help me and have given me what I consider to be dangerous advice. I now want to switch banks but I am unsure of the best options due to the current credit crunch/bank crisis. I am also unsure how the switching services work to move direct debts and wgaes etc.

I was thinking about applying to either one of the HSBC group (First Direct or HSBC) or one of the Santander banks (A&L or Abbey) as they are big players worldwide and do not appear to be struggling as much as some of the other banks (from what I have read).
My mortgage is with Abbey but some customer experiences I have read on this forum have put me off .

I intend to open a current account, a seperate joint account (my and my wife) and possibly a savings account. The most important things to me is to be able to manage my account online, to be given a good standard of genuine customer service and to have a decent rate for the savings account.

Any ideas or views?

Rafter

johnerz,

Personal view is that current account choice should be about more than the best introductory offer or juicy interest rate that will inevitably fall over time.

I'd personally recommend first direct as a customer of 12 years. Having them on call 24 hours a day to sort any problems is great and their website is good as long as you don't mind monochrome.

If you travel abroad a fair bit, the other option worth considering is a Nationwide Flex account as this will save you a lot on cash withdrawals and using your debit card overseas.

Firsd Direct also have a good range of offset mortgages, so once your current deal with abbey is up, you could switch to them and then effectively earn your mortgage rate tax free on your current account and savings account balances.

Given the size of balance transfer charges, you might be better off with a 'life of balance' transfer to clear your £4k debt. Alternatively, if you think you can save the £4k in just over a year, get a 0% purchases credit card with a long 0% period, put all your spending on that and then repay your current debt and make sure you put aside £333 per month for 12 months to have £4k saved up in a year to repay your new card before they start charging you interest.

Might be worth reducing the limits on your current cards first to maximise your chances of getting a £4k limit.

Good luck

R.

rb10

I would not rate the fact that the HSBC group and Santander (i.e. Abbey/A&L) are struggling less than other banks at all highly in a choice of current account.

The chances of any high street bank collapsing are so very negligble, and in the unlikely event of there being a problem, you are fully covered up to £50k anyway.

johnerz

Thanks for the time you guys have taken to reply.
I have never even considered switching banks before but I want to out of principle. I am really annoyed at how my needs were ignored.
Rafter, thank you very much for your help.
I have reduced my Virgin card limit from £13k to £4k. I will leave it a month and then apply for a new card on a 12-14 month 0% interest see how that goes.
I will apply for a First Direct account, everyone seems to only have good things to say about them on here and they currently have the £100 introductory offer.

I was just thinking, I have 2 cards with a £4k limit. If I put all £4k of debt on one card then kept paying each card off with the other at the end of each month whilst making payments off the balance in the middle of the month I guess thats a DIY way of getting 0%??
Are you aware of anything preventing me from doing that?

noah271007

johnerz wrote: »

Thanks for the time you guys have taken to reply.
I have never even considered switching banks before but I want to out of principle. I am really annoyed at how my needs were ignored.
Rafter, thank you very much for your help.
I have reduced my Virgin card limit from £13k to £4k. I will leave it a month and then apply for a new card on a 12-14 month 0% interest see how that goes.
I will apply for a First Direct account, everyone seems to only have good things to say about them on here and they currently have the £100 introductory offer.

I was just thinking, I have 2 cards with a £4k limit. If I put all £4k of debt on one card then kept paying each card off with the other at the end of each month whilst making payments off the balance in the middle of the month I guess thats a DIY way of getting 0%??
Are you aware of anything preventing me from doing that?

Hi is your credit rating good? If it is good or excellent from what i can see, then i recommend you to apply for Capital One credit card. Not the one with 34.9%! https://www.capitalone.co.uk
I'm not surprised Lloyds have refused to help you further because they feel that you are more of a risk. Do you have a good salary?

noah271007

I would also advise you NOT to close Lloyds TSB if it is your oldest account as when going through credit scoring, having an account opened for 18 plus years will help the score as lenders see this as stability. Does your lloyds tsb account appear in your credit files?

johnerz

Hi Noah

my credit rating was poor even though I have long standing bank account, no CCJ's, I make all payments on time etc. Apparently its poor due to the £13k limit on my Virgin card. The only negative point on my credit score was that I have a high debts. I earn £40k per year and have debt of £4k. I didnt think this could be classed as out of control.
The "advisor" said that the credit rating will assume that I will use all of my credit card limits so instead of £4k debt they will condsider me as having £17k (my 2 card limits put together).

The credit report has my current account on it but it states that I opened it in 2006, which is wrong. That was when I down graded it from being a gold account. I have held the actual account since I was 15 approx!

TheKeyMaker

Quote:
[The "advisor" said that the credit rating will assume that I will use all of my credit card limits so instead of £4k debt they will condsider me as having £17k (my 2 card limits put together).]

Correct! The Credit Rating info will shows the credit already AVAILABLE to you … which makes sense.

flossy_splodge

I don't know if this will help or not but I opened an Alliance and Leicester account to get the high interest.
It has been nothing but trouble and when the year is up I will close it and go back to my LLoyds account which luckily I have not closed.
Personally I have never had a problem with Abbey but I know many do.
I have personal as well as business banking with them.
I'm afraid it's really down to personal experience and opinion.
Good luck.

johnerz

Thanks, I work with budgets etc at work no problem. This is the first time I am really trying to overhaul our home finances. I feel like very naive with all of this. All of the advice and help is really appreciated.