Basic Bank Account with a Debit Card

baggsy

Hi all,

I went in to my local Santander earlier in the summer to open a new account as I was unhappy with Barclays.

I, unfortunately do now have bad credit, including a couple of CCJs and requested a basic bank account with Santander. I was accepted and all the paperwork came through, including a shiny new Visa Debit Card and have been using the account ever since.

On opening my latest statement it appears I went overdrawn by £11 for 1 day, as funds went into the account the following day to rectify the situation. As a result, a notice on the statement says that they will be charging me a paid item fee of £15 (for the debit card payment that tipped me over) and an unarranged overdraft monthly fee of £25.

Now, I was under the, now false, impression that you couldn't go overdrawn with a debit card (I don't use the chequebook they supplied me with, and have no direct debits or standing orders on the account). However, I am apprently wrong. I went in to my local branch to complain and was told that they couldn't deal with complaints regarding their fees and to call telephone banking, which I duly did, who immediately offered to cancel the higher of the two payments, but after some arguing they did finaly agree to cancel both charges, after revealing I had in fact been issued with a standard bank account, something which I did not ask for. They informed me that they could change my account to a basic one, but the debit card would be removed, which is something I need.

Now, about ten years ago, HSBC and NatWest (maybe also others) offered a bank account with a Solo card, which would electronically authorise every debit card payment to check there were funds available, and either authorise or decline the transaction as neccessary. With Maestro and Visa Debit cards it appears to authorise transactions under a certain amount without checking, leading to accounts going overdrawn and charges being issued.

Are there any basic accounts out there that come with a debit card like a Solo, so you can only spend what you have, or are all debit cards these days designed so that you can go 'accidentally' overdrawn, so the bank or building society can make money from the charges?

Thanks in advance,

Baggsy

zppp

It is possible to go overdrawn on any card. Some retailers have floor limits, where they will not check your available balance at the point of sale. Likewise, if you use our card in certain places like a train/plane it may not be physically possible to check to see if you have available funds.

Most banks are using Visa Debit, and have phased out Solo/Maestro. The Natwest Step account, which you used to get a Solo card for currently doesn't charge you for going overdrawn on that account. (I say currently, but not entirely sure what will happen from 1st Feb next year as the charging structure is changing).

The cards are not however designed to allow you to go overdrawn to make money for charges. If you try and make a payment, you are asking the bank to honour it. You need to also take responsibilty to know what you have in your account when you make transactions.

baggsy

I understand all that, but on the other hand, when you're out and about for the day it's hard to keep check of all the small purchases, escpecially if the account is low on funds. As a result, when I'm using my debit card in a store, through an electronic machine, am I not asking it to check my account to ensure the funds are there before it authorises the payment?

It does appear that they work that way to me to rack up charges. £40 in fees for going overdrawn by £11 for one business day is an extortionate amount of money, and in no way reflects their genuine costs.

Am I right in thinking that a Visa Electron card works in the same way as a Solo card used to?

Thanks in advance,

Baggsy

[Deleted User]

zppp wrote: »

It is possible to go overdrawn on any card. Some retailers have floor limits, where they will not check your available balance at the point of sale. Likewise, if you use our card in certain places like a train/plane it may not be physically possible to check to see if you have available funds.

Most banks are using Visa Debit, and have phased out Solo/Maestro. The Natwest Step account, which you used to get a Solo card for currently doesn't charge you for going overdrawn on that account. (I say currently, but not entirely sure what will happen from 1st Feb next year as the charging structure is changing).

The cards are not however designed to allow you to go overdrawn to make money for charges. If you try and make a payment, you are asking the bank to honour it. You need to also take responsibilty to know what you have in your account when you make transactions.

This has happened to me with Santander also
£25 paid item fee for going overdrawn as i used it at a train station

PaulW922

A Visa Electron does indeed work in the same way as a Solo card did. However, these too are being phased out by many banks (not by Visa itself) in favour of a standard Visa debit card which contains in the chip a requirement for every transaction to be authorised. This means that the bank (and you) get the control of a Visa Electron but with the wider acceptance of Visa debit. The only time you may get an issue is, for example, on a train with an offline terminal (the type conductors carry around with them) where the card may not work.

However as the previous poster said there is no absolute guarantee that a debit card transaction will not send you overdrawn although it is very unlikely with an 'always authorise' card. The banks would say that it remains your responsibility to manage your account. This can happen where a retailer, for example, authorises a transaction on Monday but does not reconcile their transactions until Friday. In the intervening time the reserved amount on your current account could be automatically released. it is very unlikely though.

Santander do not apparently offer a debit card on their basic account but others do. as far as I know Lloyds has one (but you can only use Lloyds atms), Barclays does and NatWest/RBS currently offer Solo and are migrating to Visa. Clydesdale and Yorkshire offer a similar version of the Maestro card and the new Metro Bank offers a similar debit Mastercard. RBS and NatWest also offer a 'cash account' which has a debit card but no SOs/DDs and is guaranteed not to have any returned item fees.

pmduk

I'm afraid it is your responsibility for keeping track of what you spend. Somebody has already explained, some retailers don't have to pre-authorise low value transactions. Therefore if one of these transactions is presented AFTER you have spent your balance elsewhere the bank has no alternative but to pay it, thereby putting you overdrawn. Personally I keep a running total in a notebook if there are likely to be so many transactions that I won't keep track

System

You could ask Santander to downgrade you to an Instant Plus account, which is a halfway house between their standard current account and basic accounts.

Otherwise, they can issue you with a more basic Visa Debit (electronic) and may catch more transactions - this is the type that is issued on the Instant Plus which is similar to Visa Electron.

However, use cash if your getting close to the wire, then you don't need to worry...

jen245

Natwest/RBS and HSBC have not been issuing Solo or Maestro cards for a while now, they are all now Visa Debit. Most of the main banks have now switched all their basic/current account cards over to Visa Debit. I think Halifax and Santander still offer electron with their basic accounts, but I dont think they will be far behind the other banks in changing over. Do you not have access to online or telephone banking, so you can check how much money you have available? Having online banking for me is a godsend. I check my accounts regularly, and as a result, havent had any bank charges (except authorised O/D charges) for years. As already pointed out, it is your responsibility to manage your finances so you dont go into unauthorised overdraft. If your account is low on funds, withdraw the cash and spend that, or make sure you keep a note of what you have spent when you are out, so you dont spend more than you have. You are lucky they refunded the charges, but dont expect it to be a regular occurence, or you may find yourself without a bank account.

Toe-Jam

Heng_Leng wrote: »

You could ask Santander to downgrade you to an Instant Plus account, which is a halfway house between their standard current account and basic accounts.

Otherwise, they can issue you with a more basic Visa Debit (electronic) and may catch more transactions - this is the type that is issued on the Instant Plus which is similar to Visa Electron.

However, use cash if your getting close to the wire, then you don't need to worry...

With Santander it is not the Card that is the problem, it is the Account, Which has a condition that if you use your card and don't have the money they will create and "instant overdraft" and allow it through and then charge you. its in section 3 of your terms and conditions, and regardless type of card you ask for it will still happen. If you don't want this to happen you should have an account like a Halifax easycash which will not allow you to go overdrawn.

dvnly

Alongside my current account I have a basic santander account which I have an electronic only Visa Debit, I was under the impression this worked exactly the same as the old Visa Electron I had in the fact that it would only authorise if the funds were available.

mattdickinson

Santander do not apparently offer a debit card on their basic account but others do. as far as I know Lloyds has one (but you can only use Lloyds atms), Barclays does and NatWest/RBS currently offer Solo and are migrating to Visa. Clydesdale and Yorkshire offer a similar version of the Maestro card and the new Metro Bank offers a similar debit Mastercard. RBS and NatWest also offer a 'cash account' which has a debit card but no SOs/DDs and is guaranteed not to have any returned item fees.[/QUOTE]

It's the Step account. There are no fees if a debit card payment takes you below £0. However if a direct debit or standing order is returned you will be charged.