Wanted: A Bank Account that can't land you with "Penalties" or "Charges"

Taffy99

Wanted: A Bank Account that can't land you with "Penalties" or "Charges"

For someone earning an average income, with average debts, poor-average credit score, disposable income, assorted self discipline, and sometimes/often tries to shop & spend beyond funds, resulting in thousands of pounds in penalty fees and interest charges over the years.

Q1) Is a "Basic Bank Account" the best option?

Q2) Does anyone know of a detailed comparison of "Basic Bank Accounts"?
I've read the Aug/2008 FSA summary, http://www.moneymadeclear.fsa.gov.uk/pdfs/bank_accounts.pdf but it lacks some details and I
can't find any of the account(s) "small print" online.

Q3) Acceptance / Pros / Cons / Comparison of Visa Electron vs. Solo vs. Maestro?

Q4) Any methods to provide discipline to the "undisciplined"
- Eg. Fees free Grocery / Store-only charge / payment card.

I was thinking of a two - account approach.

First account
- Wages paid into
- Arrange direct-debits to come out, just after wages,
- Standing order to transfer some "spending money" into second account
- Keep chequebook / card / access with trusted proxy

Second account
- Basic Bank Account, with ATM / Payment card only
- Bank will refuse all types of transaction without penalty when insufficient funds

Thanks in advance

book12

1. Yes.

2. Go into branch and request a booklet of terms and conditions of bank accounts. Some banks publish this on their website too. Just search carefully for them.

3. The acceptance for those debit systems mentioned are good. Lots of places accept them.

4. Your approach of having two basic bank accounts sounds good to me to spread the spending.

noah271007

Question 3 - Maestro/Visa for debit card would be the best option. Don't consider Lloyds TSB as your basic account because it is a VISA debit card as it is restricted to taking money out of Lloyds TSB cash machines ONLY!!

agsnu

Basically, because of how the payment networks work, there's no way an account can guarantee that a transaction will always be declined if you don't have money to pay for it. So unfortunately such an account cannot exist.

Taffy99

agsnu wrote: »

Basically, because of how the payment networks work, there's no way an account can guarantee that a transaction will always be declined if you don't have money to pay for it. So unfortunately such an account cannot exist.

Thanks for the replies.

asgnu: I understood Visa Electron / Solo / Maestro purchases dial-up and check for available funds before the transaction is authorised - Is it still possible to purchase beyond available funds with these types of card?

agsnu

jayjones wrote: »

asgnu: I understood Visa Electron / Solo / Maestro purchases dial-up and check for available funds before the transaction is authorised - Is it still possible to purchase beyond available funds with these types of card?

http://forums.moneysavingexpert.com/showthread.html?t=1440717

CLAPTON

I think your basic premise is wrong.
You're looking a symptoms rather than the causes of the problems.

Rather think:

average income
-can't afford debts ... they charge interest and cause fees, which means I throw away part of my hard earned income each month..
-must start serious budgetting ... try
http://www.makesenseofcards.com/soacalc.html
-start a spending diary and write down everything you spend so you know exactly where all the money is going.
-don't take a CC or debit card out at all ..give them to your parents/partner etc and deal only in cash.. once its gone its gone.
-clear the debts asap... think about a second job to earn extra income.

expecting a bank to be responsible for controlling your spending is frankly daft.

fuchsiapink

@jayjones - Hi, I have just read your thread and it occurred to me you are in quite a similar position to me. I have my own thread which may be of interest to you.

http://forums.moneysavingexpert.com/showthread.html?t=1450889

It almost sounds like you're looking for the type of bank account I have been offered. A managed bank account. As you will see from the thread I am quite dubious about it, thats why I posted to ask for other MSE'ers advice.

I realise this disputes Claptons comments, however I totally understand just needing a bit of help to get things under control again.

A couple of things that really stood out for me with the managed account approach with Think Money. Firstly, you get one person assigned to your account so when you ring up you talk to the same person. That to me is worth it's weight in gold, I miss the personal touch you used to get with banks, that doesn't happen any more. Secondly, I fired a whole heap of questions at Think Money and the guy I spoke to answered every single one clearly, patiently and helpfully. We were on the phone for an hour and before you say oh thats how they make their money, they did rang me.

Good luck
YMMV
FuchsiaPink
(I do not work for Think Money! I'd never heard of them till last night! I'd never heard of managed banking till last night either)

Taffy99

fuchsiapink wrote: »

@jayjones - Hi, I have just read your thread and it occurred to me you are in quite a similar position to me. I have my own thread which may be of interest to you.

http://forums.moneysavingexpert.com/showthread.html?t=1450889

It almost sounds like you're looking for the type of bank account I have been offered. A managed bank account. As you will see from the thread I am quite dubious about it, thats why I posted to ask for other MSE'ers advice.

I realise this disputes Claptons comments, however I totally understand just needing a bit of help to get things under control again.

A couple of things that really stood out for me with the managed account approach with Think Money. Firstly, you get one person assigned to your account so when you ring up you talk to the same person. That to me is worth it's weight in gold, I miss the personal touch you used to get with banks, that doesn't happen any more. Secondly, I fired a whole heap of questions at Think Money and the guy I spoke to answered every single one clearly, patiently and helpfully. We were on the phone for an hour and before you say oh thats how they make their money, they did rang me.

Good luck
YMMV
FuchsiaPink
(I do not work for Think Money! I'd never heard of them till last night! I'd never heard of managed banking till last night either)

Spiralling out of control
"Think Banking" would have been a good option 5 years ago, when caught in a spiral of debt, with penalty charges every month. If this is you now, "Think Banking" at £12/month may be the best option.

Avoiding going (back) there?
However, if you're not currently getting caught by penalty charges, are not living in your overdraft, and have spare income after paying rent, loan, c/card, food payments, I think finding a way to managing youself out of debt might be a better option - that's where things are now - and am thus looking for an account that will help prevent slipping into bad (old) habits - and not penalise when you try to.

The "Think Banking" method is a paid-for service based on the same principle I am looking to implement for myself: Two bank accounts seperating Salaries, D/D, S/O's from "Spending money" (debit card), with a penalty-proof guarantee.

1) "Think" requires less self-discipline
- you're paying someone else to manage the Rent, D/D, S/O, Debt payments.

2) Think is penalty free - but not "free"
- I'm still looking for the bank account that doesn't charge the penalties, without a monthly subscription fee.

Taffy99

CLAPTON wrote: »

I think your basic premise is wrong.
You're looking a symptoms rather than the causes of the problems.

Rather think:

average income
-can't afford debts ... they charge interest and cause fees, which means I throw away part of my hard earned income each month..
-must start serious budgetting ... try
http://www.makesenseofcards.com/soacalc.html
-start a spending diary and write down everything you spend so you know exactly where all the money is going.
-don't take a CC or debit card out at all ..give them to your parents/partner etc and deal only in cash.. once its gone its gone.
-clear the debts asap... think about a second job to earn extra income.

@Clapton,

I totally agree with all your comments.

And budgeting is a very big part of bringing spending and debts under control.
Thanks for the link to the Budget Planner:
http://www.makesenseofcards.com/soacalc.html
It looks very good, i'll go through it carefully with bank statements.

I've been looking to use the Pear Budget spreadsheet - it's slightly more complex, but allows to store and compare spending vs budget each month.
https://www.pearbudget.com/spreadsheet
(It's all in dollars at the moment too, so i'm editing it to make it more me-friendly):rotfl:

However, the weakest link in any chain is always human, and i'm looking to mitigate against future apathy and digression with a penalty-proof bank account too (among other things).

Lokolo

Indeed you need to learn to control yourself. For example, tonight I really really really want a Dominos, but instead I am cooking chicken and chips, and won't have Dominos until payday next month