open a few student bank accounts

mr_rush

Universities open in 2 weeks time.

when i started uni in 1999, I opened 4 student bank accounts - barclays (for the free phone), HSBC (for the National Rail YP card), Natwest (for £50), Abbey (for £35 and free wok).

I know the banks say that we can only have one student bank account but as long as some money was going through each of them, i didn't hear a thing. I just sent up a DD so £20 circulated between 3 of the accounts. I used the fourth as normal.

I was able to use the overdrafts on all 4 accounts without a problem. As I studied medicine, I used the overdrafts for 6 years in total.

Now that I've graduated, the overdrafts are being slowly reduced, but effectively I got a £6000 loan over 6 years for 0%.

My brother is at uni at the moment and is doing the same thing. I checked his credit profile recently and it hasnt been affected by this at all.

si1503

I recently opened my 2nd and 3rd student accounts (with halifax, and lloyds/tsb), for the 2.75k overdraft with halifax, and for the ipod from lloyds (which i never got as i'm going into my 2nd year!), but i'll take the extra free money anyway! The banks don't like it, but I have checked the T&Cs and there is nothing in there to say that you are not allowed bank accounts elsewhere, its not against the law to open a bank account! I have money from the SLC going into my first account (natwest), and then wages going into lloyds and standing order from parents into halifax, however I like the idea of setting up a D/D through them all, i might do that into a 4th account, RBS offering a 2k overdraft is mighty tempting right now!

DrFluffy

With Halifax you specifically have to agree not to have any second student current accounts... If they subsequently find out you have multiple accounts, they have the right to withdraw the overdraft facility, which you then have to pay back ASAP...

A similar thing happened to a friend of mine last year with HSBC 'v' 'Gnatwest'...

DrFluffy

https://www.halifax.co.uk/student/forms/stu_main.asp

rhig

It is not against the law to open more than one account however if you declare you do not hold any other student accounts when you do you are committing fraud. Most banks rewuire a declaration that you do not hold any other student accounts.

Mr Rush did this 7 years ago when T&C's were not so strict and before the banks started to share as much information, I'm not saying this isn't possible now but it is more likely that you will be caught.

If you are going to do this and are applying for a student account I would imagine it too look more legitimate to open a standard account which you upgrade to a student account after funding it from another persons account. A bank will most likely know what you are doing if you walk in at 18 asking for a student account without transferring your account from another bank.

The most legitimate looking way to do this would probably be siging up with a 3rd party with a standard account and transferring to where you want your next student account. You are usually required to declare how long you have been with your previous bank though.

If you do do this you must be prepared to pay back everything pretty quickly if the banks catch on and demand the overdraft back. This would suggest the best investment for the OD would be a cash ISA or something you can access fast.

Applying for multiple accounts in a short period of time will show up on credit checks done by your bank prior to approving your overdraft, for this reason I would imagine you are more likely to be caught if you applied for many at once. Also applications to the banks within a group e.g. RBS/Natwest will probably be rejected right away.

si1503

Fair enough. If I get caught I get caught, but I know others that have done it successfully without any problems, and so far I have had both of my overdrafts approved after credit checks had been carried out. Perhaps I'll leave the 4th account for now. Realistically the worst that is going to happen is that my interest free overdraft is taken off and the account converted to a regular current account, or more less likely (but still possible) it will be closed. They can't put bad marks on my credit rating and stuff for that can they?

I know some student accounts do allow customers to hold more than one account, there is a comparison article on this site that mentions the T&Cs regarding this issue for the top accounts out there. Perhaps I will move from lloyds to smile as from that article it would suggest there is no policy on holding more than one account with them, lloyds did seem pretty hot on the subject of funding the account with student loans, regular incomes and stuff, and could get suspicious when my loan dosen't go in later this month.

Would closing the account so soon be bad for my credit rating? Would I be better to tell them that i've decided to open a student account elsewhere and convert it to a current account instead?

rhig

The accounts you hold with HBOS, Lloyds and Natwest all tell you you can't hold another student account. If you have been given the accounts and the overdrafts have been allocated you are probably in the clear. The problem is when you call to request an overdraft or increase an overdraft a credit search is often carried out, do you have the £2750 already? If so great but if you don't I would be wary of calling them, from what I have heard HBOS policy is to give £500 then you have to call for more where you will be credit checked.

Whether the banks actually enforce the one account rule may depend on your spending, if you spend a lot regularly they may look the other way as they anticipated loaning you the money to pay it off in a few years. If they see you transfer it to a savings account its more likely they will be on to you. No bank wants to lose £100/year in interest only for the overdraft to be paid off when they can start charging you.

I would keep an eye on the papers, high-street banks are gradually opening up their customer details to each other which is the main risk to you. Your credit file will not list your overdrafts for banks to see but will show when a bank did a credit search on your name.

I have been reading the T&Cs for student accounts over the last few days, a few don’t make any mention of disallowing people with multiple accounts. I can’t find the rule on the websites of RBS, Abbey, Barclays of the Co Op. In your position I probably wouldn’t open any more accounts for a few months but those appear to be ok. The best way is probably to call and ask if they mind you keeping your old student account open if you open an account with them, of course you want to do this in a general enquiry without making any indication of wanting to apply immediately in case they note your query under your name. If you go into a branch you can say you were walking past and are interested in the free vouchers or whatever offer they had on the window, they will probably still know you are after the overdraft but it makes you look less likely to be going to abuse it.

I will probably go for a second account in a couple of months and plan to say I want to switch banks but need to pay off my overdraft before I close my main account, going for an account with a lower overdraft you can claim the new banks overdraft wont cover a balance transfer and you need time to pay off your other account.

brenmcc1

2 Years ago I went to a careers fair and I opened a Natwest account to get some freebies. I heard nothing from them untill last month when they mailed me saying they were upgrading my account to a student account. I wanted a Halifax student account so I opened one of them and I have been given their overdraft - although only 1K because I havent deposited any grants/loans. Now I haven't opened the natwest account they did it, so could I just take advantage of that and use their free OD too?

Trying_really_hard

Yeah, you do need to be a little canny to get away with it but it can be done. I just made sure that the accounts I held were regularly credited and no one has ever said anything or withdrawn any overdrafts (thank god).

I suppose it varies with the banks you take them with and whether you take them within the same "group" ie RBS and Natwest or Bos and Halifax.

Snow_Angel

Here's Martin's full list of all current student accounts - the tables tell you whether that bank allows you to have another student account or not.

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1121700170,82362,

si1503

rhig wrote:

The accounts you hold with HBOS, Lloyds and Natwest all tell you you can't hold another student account. If you have been given the accounts and the overdrafts have been allocated you are probably in the clear. The problem is when you call to request an overdraft or increase an overdraft a credit search is often carried out, do you have the £2750 already? If so great but if you don't I would be wary of calling them, from what I have heard HBOS policy is to give £500 then you have to call for more where you will be credit checked.

I only have the £500 right now, but obviously I want to get it increased. If Halifax run a credit check on me then i assume they will be able to see the credit check lloyds did on me, would that be enough to make them curious? Can't I say (if asked) that i've opened up a classic current account/monthly saver with lloyds? (which I plan on doing shortly by the way). If it could be a problem then how long should I leave it until applying for a higher limit?

Whether the banks actually enforce the one account rule may depend on your spending, if you spend a lot regularly they may look the other way as they anticipated loaning you the money to pay it off in a few years. If they see you transfer it to a savings account its more likely they will be on to you. No bank wants to lose £100/year in interest only for the overdraft to be paid off when they can start charging you.

Good point.

I would keep an eye on the papers, high-street banks are gradually opening up their customer details to each other which is the main risk to you. Your credit file will not list your overdrafts for banks to see but will show when a bank did a credit search on your name.

Sorry if this is a stupid question, but why is this a bad thing?

I have been reading the T&Cs for student accounts over the last few days, a few don’t make any mention of disallowing people with multiple accounts. I can’t find the rule on the websites of RBS, Abbey, Barclays of the Co Op. In your position I probably wouldn’t open any more accounts for a few months but those appear to be ok. The best way is probably to call and ask if they mind you keeping your old student account open if you open an account with them, of course you want to do this in a general enquiry without making any indication of wanting to apply immediately in case they note your query under your name. If you go into a branch you can say you were walking past and are interested in the free vouchers or whatever offer they had on the window, they will probably still know you are after the overdraft but it makes you look less likely to be going to abuse it.

I will probably go for a second account in a couple of months and plan to say I want to switch banks but need to pay off my overdraft before I close my main account, going for an account with a lower overdraft you can claim the new banks overdraft wont cover a balance transfer and you need time to pay off your other account.

Well, if those accounts you mentioned above do not have a policy on holding more than 1 student account then they might be safer bets. How long would you recommend leaving it before closing an account and perhaps reopening one elsewhere? As its likely to mean another credit check.