basic bank accounts and DMP- must i have one?

overdraftoverdrive

Hi, i'm just about to set up a DMP with CCCS. I have a current account with halifax that i have managed well, and have never had any charges in 3 years on. i do have a 1000 interest free overdraft on this though. CCCS told me that if i were to get help with credit cards then i would need to include this halifax account in my statement and tell them i am on a DMP. They also said i should get a basic bank account and bank from that.

I don't really want one though. The counsellor said well i should get one so i can manage money etc etc and not run up an overdraft, but i'm worried about how practically having a basic account will affect me day to day, and i'm worried about.. well is stigma the right word. Also my partner and I transfer money between both our halifax accounts for bills, expenses etc. this can be done immediately, how will a basic bank account affect this?

Has anybody here downgraded from a current to a basic and is it much different day to day? can i bank online still? And MUST i stop using my halifax current account with CCCS DMP? Is there a guide somewhere to best basic accounts as there are for current accounts so i can compare?

This is all new to me, so sorry if i'm asking a dim question!

boo80

Do you have any debts with Halifax? Are you using your overdraft?
I opened a basic account with Natwest last month and it's been fine. The only difference is my card is dull and boring instead of shiny and pretty lol

downnotout

I just found out that I can not draw more than 200 a day from an atm with my basic co op account. However it comes with a Visa Electron so it isn't too bad. Also the co-op allow very basic online banking. Its biggest draw back is the lack of cheque book but that is more of an irritation more than anything.

DevonGirl

Hi, i'm just about to set up a DMP with CCCS. I have a current account with halifax that i have managed well, and have never had any charges in 3 years on. i do have a 1000 interest free overdraft on this though. CCCS told me that if i were to get help with credit cards then i would need to include this halifax account in my statement and tell them i am on a DMP. They also said i should get a basic bank account and bank from that.
I don't really want one though. The counsellor said well i should get one so i can manage money etc etc and not run up an overdraft, but i'm worried about how practically having a basic account will affect me day to day, and i'm worried about.. well is stigma the right word. Also my partner and I transfer money between both our halifax accounts for bills, expenses etc. this can be done immediately, how will a basic bank account affect this?
Has anybody here downgraded from a current to a basic and is it much different day to day? can i bank online still? And MUST i stop using my halifax current account with CCCS DMP? Is there a guide somewhere to best basic accounts as there are for current accounts so i can compare?
This is all new to me, so sorry if i'm asking a dim question!

---

Hi ODOD
Here's a link to a guide from the Financial Services Authority:
http://www.moneymadeclear.fsa.gov.uk/pdfs/bank_accounts.pdf

I previously had an HSBC Advance account and have now got a Royal Bank of Scotland Key account. It's very similar, i.e. telephone and internet banking. I have a Solo not a Switch/Maestro, but haven't found anywhere that doesn't take it yet. No overdraft, but don't want one. I got all my direct debits and standing orders without any problem. I've also heard people on this site say good things about Co-op and Natwest basic accounts. The trick is to find a bank that doesn't have any links to any of your creditors.

With a DMP you might find it useful to set up an instant access savings account/ISA for your non-monthly items that are part of your budget, i.e. MOT, car insurance, car servicing, pre-paid prescription card, emergency fund etc etc, so that it's out of sight. No credit cards to rely on once you're in a DMP, so you will need this.

I can't see any stigma in having a basic bank account - I mean, who knows? If you're happy with Halifax and don't owe them any money - including overdrafts, personal loans etc - maybe you can stay with them - make sure you cancel any unused overdrafts tho so you're not tempted! - if you do opwe them money, you might find that they take money from your current account to pay for these debts, known as 'offsetting'.

Good luck with your journey! :beer:
DG

Deep_In_Debt

It's gerneally recommended to have a basic account as an overdraft is seen as credit and there could be the temptation to use it and you are not supposed to have any further credit whilst on a dmp.

If you are worried about the stigma - Barclays do a basic account that comes with a proper Visa debit card so no-one will know it's a basic account. The basic accounts that I know of have on-line banking and telephone banking and you can set up DDs and SOs and have your wages paid in.

I have a Natwest Step account which I am perfectly happy with.

Moany_Money

I got a basic account with Yorkshire Bank. Maestro Card + telephone and online banking. Staff are really nice too.

Broken_hearted

As soon as Halifax realises you are on a DMP they will withdraw your O/D and any other credit facilities.

Penny-Pincher!!

Broken_hearted wrote: »

As soon as Halifax realises you are on a DMP they will withdraw your O/D and any other credit facilities.

Exactly Broken Hearted!

Usually when you sign on to do a DMP..the request is that you close any accounts with credit facilities anyway and once a letter is sent to your current bank any credit will be withdrawn and your card downgraded.

PP
xx

tomterm8

overdraftoverdrive wrote: »

a basic account will affect me day to day, and i'm worried about.. well is stigma the right word

I don't think there really is a stigma in day to day life, there are so many different reasons people have basic bank accounts. And, as long as you don't have an electron card, ylou pretty much operate it just like a normal account. Personally, after paying off all my debt, I still have a basic bank account because I don't want an overdraft, or any other credit facility.