Concern over new current accounts - BBC News

m00head

http://news.bbc.co.uk/1/hi/business/7969395.stm

A consumer group say it is concerned about the fees and charges attached to a new breed of current account.

Some banks use cash bonuses to entice customers to sign up, but overdraft charges can be as high as £5 a day.

Which? said it believed banks were planning to end free banking if they lost their landmark battle over charges with the Office of Fair Trading (OFT).

The British Bankers Association said the accounts were simply the product of a competitive marketplace.

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ShelfStacker_3

The end of free banking would hardly be a tragedy, really.

Extant

ShelfStacker wrote: »

The end of free banking would hardly be a tragedy, really.

The only issue this time around would by the government's commitment to universal banking - banking for all. I'd expect to see basic bank accounts go backwards in terms of capability, or become severely more restricted rather than carry a monthly fee.

LeeSouthEast

I've been paying for my bank account since I was 16. The (relatively small) price paid for all the added benefits such as car breakdown cover is great.

Extant

LeeSouthEast wrote: »

I've been paying for my bank account since I was 16. The (relatively small) price paid for all the added benefits such as car breakdown cover is great.

What bank charges a sixteen year old?

LeeSouthEast

You do

Well, used to, anyway. Wasn't a lot, only about £2/mo if memory serves. Was a while ago.

ShelfStacker_3

LeeSouthEast wrote: »

I've been paying for my bank account since I was 16. The (relatively small) price paid for all the added benefits such as car breakdown cover is great.

What's being proposed is that the bank doesn't charge a fee for added extras, but for the basic operation of a bank account. Previously, banks subsidised this by charging people who can't manage their money for going overlimit - this may well change very soon.

It makes perfect sense - every other European country has this, as well as the USA. As it is, the personal current account makes a loss - consumers demand ever wider ranges of services, and want their bank to do virtually everything for them, but aren't charged a penny (whether not paying eleventybillionpercent interest on credit balances is a charge, as Martin suggests, is debatable).

Extant

LeeSouthEast wrote: »

You do

No we don't.

Youth current accounts are the BarclayPlus account (ages 11 to 15) and the Young Person's Account (ages 16 to 19). Neither of these carry a fee.

I'd check your statements if I were you.

Extant

ShelfStacker wrote: »

What's being proposed is that the bank doesn't charge a fee for added extras, but for the basic operation of a bank account. Previously, banks subsidised this by charging people who can't manage their money for going overlimit - this may well change very soon.

It makes perfect sense - every other European country has this, as well as the USA. As it is, the personal current account makes a loss - consumers demand ever wider ranges of services, and want their bank to do virtually everything for them, but aren't charged a penny (whether not paying eleventybillionpercent interest on credit balances is a charge, as Martin suggests, is debatable).

Of course it's not a charge. The only way you could justify that as a charge is if you knew the actual cost of running a retail bank. That's just a consumer decision being covered up behind all this "consumer revenge" nonsense.

Anyway, there'll always be a few people that will offer free banking, I don't doubt - but it will likely always be basic banking, too, and it won't have great service.

Lokolo

I think what HSBC are doing is the best way to go. Have a minimum amount into the account, this way people tend to use it as their main account, then have options to open a bills account for easier budgeting.

A lot of the banks you no longer have to have a current account if you want other products. And with it being so cheap to keep things completely internet based (no paper statements etc.) you can easily open savings accounts with other banks, internet only, without costing a penny for yourself, and very little for banks.

m00head

BBC News video report on the same topic:

http://news.bbc.co.uk/1/hi/business/7969519.stm

Note a brief appearance by Martin at 0:21, and the bookshelf in the background with many copies of "The Three Most Important Lessons You've Never Been Taught" and "The Money Diet"