First Direct New Charges Press Release

MSE_Martin

Update Note: Now read Martin's full
"How to beat the new charges" article

I'm in the middle of a note on the new First Direct Bank Charges, but have put out a press release to the journo's writing on the story - which set out my general view (the practical 'what to do is coming later')

Martin Lewis, creator of MoneySavingExpert.com comment,

First Direct has never been rate competitive anyway

"First Direct has never marketed itself as being rate competitive; and its rates are already woefully short of the best buys. It's always focused on its 'customer service' branding; hence I suspect it believes many customers will decide to stick with it, even with the fee, and others won't move out of apathy. Yet my advice is anyone earning under £24,000 who has a First Direct account should switch and ditch immediately."

The current account market is and will remain hugely competitive

"The current account market is hugely competitive; Alliance & Leicester is offering new customers 6% interest and an interest free overdraft for the first year, plus do it right and you'll get £50 when you sign up. The non 'big four' banks are desperate to attract current account custom, after all it's the bedrock for all financial products.

The info current accounts give them enables them to profitably cross-sell other banking products. Therefore while a few accounts may follow suit, banks looking to build business are already flogging out loss leader products, and they will simply see this as a gift to gain more customers from the fee chargers. I predict there will still be many fees-free good banking products available for the foreseeable future."

There's no such thing as free banking

"The cry by some that this is 'the end of free' banking is very amusing. We've never had free banking. What we've had is a system where if you're in credit you don't pay a fee, but the big banks make huge cash out of paying a pitiful 0.1% interest when you're in credit, and lending the same money back to you at 18% when you're overdrawn. In this way, we are still paying in the lost interest that could be earned elsewhere.

Add to that the unlawful penalty charges when we go overdrawn and the term 'free banking' is a misnomer. What customers should be doing is switching to the most competitive accounts and joining the tens of thousands winning compensation by threatening to take their bank to court to reclaim past penalty charges."

Related resources for readers' further info

Reclaim Unfair Bank Charges: www.moneysavingexpert.com/reclaim
Top Bank Accounts: www.moneysavingexpert.com/currentaccounts

Martin

mary

Agreed, customer services have been very good as far as I'm concerned. A few months ago I opened an account with them for the second time in three years, but a week later the rate dropped and so my money never reached FD, I changed tack. This morning I've now closed the account, better rates elsewhere and that's what's important to me. Read MSE daily and always try to stay alert to the best deals and then move on. Thanks Martin

GreyPilgrim

Thanks for the clarity - the board seems to gone a little bit FD crazy

trets77

post to keep thread at top

johnofhertford

Have to take issue with Martin calling this a "horrible" product. It's not horrible at all. Whenever I discuss banks with friends, First Direct always comes out on top for its service. Nobody I talk to who banks elsewhere can give examples of truly exceptional customer service. Whenever I explain the text message banking facility that I have people are amazed that such a facility exists because their bank doesn't offer it (FD has for many years). Other banks' customers don't seem to enjoy the benefits of a service like IB plus. Other banks' customers are often surprised that if I call my bank I get straight through to a person in the UK without pressing 1 for this or 2 for that.

Some people seem to live their lives on the basis that cheapest is best. What an awful prospect. It seems to be the guiding principle of this site, so I shall say farewell and leave you to your bargain basement.