First Direct to charge £10 per month for current account

climbgirl

ZTD wrote:

I think the Government will stamp on it. People will move to cash, and the problem with hand-to-hand cash payments is that taxes somehow seem to get neglected.

I hope you're right, but no other government in the world stopped it when it was brought in. It just amazes me that the banks haven't leapt on this cashcow earlier!

One interesting thing though - NZ has had a chip and pin equivalent for over 10 years now. My friend wrote her Phd thesis on the drop in street crime and mugging that eventuated when everybody stopped carrying cash and started carrying cards (card fraud is a lot rarer there, they seem to have better security).

Then the banks started charging for every transaction - every time you took money out of an ATM, every time you used a branch, some even charged you for depositing your money! So people tried to cut the costs by carrying lots of cash again. And the street crime figures are up....

oops_a_daisy

there is a long running thread that has been going on budgeting and current accounts regarding this - HERE

David_B_2

This could be the first of many!

I was reading a article in 'Money wise' only last about the boss of HSBC wanting to start this. The writer of the article seems to think others will follow suit but I'm guessing it depends how it goes down, like a lead balloon I guess!

The basic accounts are cr*p and who in their right mind would pay 10p for them never mind £10?

What next, a trendy wine bar ;-0

climbgirl

David_B wrote:

This could be the first of many!

I was reading a article in 'Money wise' only last about the boss of HSBC wanting to start this. The writer of the article seems to think others will follow suit but I'm guessing it depends how it goes down, like a lead balloon I guess!

The basic accounts are cr*p and who in their right mind would pay 10p for them never mind £10?

What next, a trendy wine bar ;-0

If you look at global banking trends, it's pretty much inevitable I think. It will go down like a lead balloon, but given how much bad debts are denting their profits, they'll be looking at other ways to make money. And once one goes, they all will. Look how quickly they all followed suit when they started putting 2.5% fees on balance transfers to 0% cards? Six months ago there were plenty of 0% cards with no BT fees. It's very hard to find one now that doesn't have them...

Curlyz

Think of the new business the bank that has the b***s to asdvertise 'Free current accounts guaranteed 'til[/I] [say] 2010' would get (hope it's mine)

scootw1

climbgirl wrote:

If you look at global banking trends, it's pretty much inevitable I think. It will go down like a lead balloon, but given how much bad debts are denting their profits, they'll be looking at other ways to make money. And once one goes, they all will. Look how quickly they all followed suit when they started putting 2.5% fees on balance transfers to 0% cards? Six months ago there were plenty of 0% cards with no BT fees. It's very hard to find one now that doesn't have them...

The banks must shoulder some of the responsibility for the money they are losing. People go bankrupt because of a) high charges in interest on CCs and b) high interest charges on loans (I was charged 26 % interest with HFC so a 7800 loan became £25000 after interest. With that much profit I think they can take a few blows.

climbgirl

scootw1 wrote:

The banks must shoulder some of the responsibility for the money they are losing. People go bankrupt because of a) high charges in interest on CCs and b) high interest charges on loans (I was charged 26 % interest with HFC so a 7800 loan became £25000 after interest. With that much profit I think they can take a few blows.

Some people go bankrupt for these reasons. Let's not open up that old debate again though!

I agree with you. But we all know by now that banks aren't moral institutions, they're businesses. And they've got shareholders to answer to and they will want to know why the profits are taking a hit. And I dare say the shareholders won't agree with you.

scootw1

climbgirl wrote:

Some people go bankrupt for these reasons. Let's not open up that old debate again though!

I agree with you. But we all know by now that banks aren't moral institutions, they're businesses. And they've got shareholders to answer to and they will want to know why the profits are taking a hit. And I dare say the shareholders won't agree with you.

Sorry, that's what I meant. And I don't really care about the shareholders. Too much emphasis these days is put into giving shareholders a big dividend at the expense of the consumer (and I don't mean just banks). Is it really right to put the consumer in the poorhouse just to inflate some shareholder's bank balance?

southernscouser

climbgirl wrote:

Sorry SS, but I think you're wrong about this. Sadly, I think bank account fees are inevitable in the UK. In fact, it's one of the only places in the world where they don't charge fees for basic transactions on bank accounts - ATM, withdrawals, hell even deposits in some instances! You can choose either a blanket fee or a per-item fee, it depends on the account you choose. When I moved to the UK 3 years ago and was doing my homework on which bank to choose, I was stunned to realise you didn't get charged fees on these kind of things!

Now that they've been told to lower their default charges to £12 and bad debt defaults are rising, they'll be looking to recoup that money somehow. And this seems a pretty easy option for them.

The first bank that tries it will get hammered but once one does, the floodgates will open and they'll all be in there. My guess is that this is HSBC testing the water with their subsidiary....People might vote with their feet, but sadly most won't. The article says that people are more likely to change their spouse than their bank account. The numbers of MSErs are a pretty small percentage of the country, alas.

I'm sorry to say it, but given the greed of banks this is inevitable. I give it two years, max before they're all doing it and its' become the norm. In fact, the only thing I'm surprised about is that they haven't already.

Well I think you're wrong! :rotfl:

I'm with Natwest and they haven't dropped their charges. Got a list through the other day. Think for the time being only credit cards have reduced the penalties.

Secondly, there could be a massive uproar in the way people are paid. At the moment the overwhelming majority of people get paid by BACS or whatever straight into their account.

Someone is bound to start questioning the legality of this when/if all banks charge for an account. It will go back to how it was before my time. They used to charge for bank accounts in this country but people used to also get a 'pay packet' in their hand.

Why wouldn't the same thing happen again? :think:

climbgirl

scootw1 wrote:

Sorry, that's what I meant. And I don't really care about the shareholders. Too much emphasis these days is put into giving shareholders a big dividend at the expense of the consumer (and I don't mean just banks). Is it really right to put the consumer in the poorhouse just to inflate some shareholder's bank balance?

I don't care about the shareholders either, but that's the only people the banks will answer to. Your questions are moral ones and right now the banks (and other businesses) don't give a damn about that! They care about the profits and the profits only. The growth in the organic food market shows that perhaps in time, these kind of moral and ethical will have more of an impact on the bottom line of companies (hopefully anyway!). BP Solar Ltd turned a profit for the first time last year, one of the first environmental energy companies to do so. Now that they can make money out of it, all the big energy companies are all over it.

I know I sound all doom and gloom but if you examine global banking trends in any depth, you'll see that fees are pretty much inevitable. I really hope we can stop it or minimise them by consumer power, but given the combination of general consumer apathy (not MSErs of course!) and the way the banks all seem to follow suit so quickly, I can't see it happening.

Like I said before, I'm just surprised that they haven't done it sooner given that most of them are global corporations and will be making profits from this in other regions of the world.