First Direct -why so high at £1500 monthly payin ??

peter999

I'm surprised that First Direct has set its threshold so high at £1500 monthly payin to avoid paying monthly charge.

(ignoring other ways of avoiding charge like having 2nd product).

We know many people are closing their accounts.
But they will lose a LOT of new business as people look elsewhere.

This charge will stop many new customers from joining them in the future

Does First Direct have a future ??
.

Cypher

First Direct told me they wish to become a Premium Bank where only excusive customers are welcome. They don't want Riff Raff just the big earners, thats their plan.


BTW those are my words, they put it a little bit nicer.

Rafter

It does seem a bit odd it is so high.

I joined first direct when I left university because it was my parents bank. I'm not sure a lot of graduate jobs would pay £1500 net a month, even with inflation, which begs the question where are the new premium customers of the future going to come from.

Perhaps once they have cleaned out the dormant accounts and carpet baggers from sites like this they will lower the threshold!

R.

bobbadog

I was really angry with FD when they announced this, especially as i'm a graduate, and after student loan / pension / season ticket i only take home £1009 a month - not enough for 'free' banking. I have many other services with them so i'm exempt from paying the £10 a month fee...

They just want us customers to do lots of banking with them, rather than just 'having' a bank account. I imagine it's just to cull all the non-users who joined when there was a £50 cashback fee.

peter999

Rafter wrote:

It does seem a bit odd it is so high.

I joined first direct when I left university because it was my parents bank. I'm not sure a lot of graduate jobs would pay £1500 net a month, even with inflation, which begs the question where are the new premium customers of the future going to come from.

I think even people earning a good salary of £30k+ would think twice about opening a new account with First Direct, even if their salary was going to be paid in.

I just would not want a tie in to my salary being paid in & a £10 monthly fee.

Fair enough they want to remove dormant accounts & ideally people pay in their salaries, but you don't force them at such a high threshold (£1500/month), as you lose people's goodwill.

Like you say about students/young people, once you sting them, they won't forget.

peter999

Cypher

The bit that really puzzles me is banks usually fight hard to get new customers, especially new young customers, who tend to be loyal and once you pick your bank you tend to stay with them.

With FD new policy, it is these young new customers they are driving away, and some will be the future big earners

Once you have driven them away it will be damn near impossible to get them back.

CopperPlate_2

But lets remember that all it takes is another product to negate the charge - a savings account, credit card, or loan. Okay, their products at the moment aren't ultra competitive. That might change. Just because you pay in less than £1500 doesn't mean you get charged, it just means you need to have another product. At the moment a savings account - e-savings will do - removes the threat of the charge. It's all supposition that fd will somehow catch on to this and suddenly implement a minimum savings amount each month. Now that would provoke - and should provoke - an outcry.

As it stands, there are very simple ways to get around the charge. So why not use them and stop all these people getting their knickers in a twist about something that could quite easily not affect them.

cordial

Well, I've heard that the FD service charge is just an experiment to see how many customers they lose - if not too many, they'll apply it to ALL customers, no matter how much they pay in and no matter how many extra products they buy . . . . . . . . . . .


. . . . . . . . . . .


. . . . . . . . . . . . actually, no, I haven't - but then hey, who cares what nasty rumours get started about people who are clearly acting as a front agent for the rest of the banking 'industry'?

peter999

CopperPlate wrote:

But lets remember that all it takes is another product to negate the charge - a savings account, credit card, or loan.

I'm not really talking about existing customers who can stay or go.

I'm talking about new customers who normally start with 1 product, the bank account and add additional products later when needed.

New cutomers, young people, students, others wanting additional account, will look & think I don't want that tie of salary being paid in & a £10 monthly fee, look elsewhere.

I think First Direct will go into decline, with no new customers coming in.

peter999

PBA

For those predicting the end for First Direct, remember that it is part of HSBC. At the moment HSBC has it's Premier service for people earning over £90K (i think), but then below this level they have the standard HSBC account and First Direct effectively competing with each other. I can see First Direct moving to specialise in the so called mass affluent market, say for people earning £30k to £90k. So most people opening accounts with the bank would start with an HSBC account, but get moved to the First Direct service when their income increased.

Just my opinion, of course, but I doubt HSBC would be foolish enough to let a brand like First Direct fade away.

CopperPlate_2

I think any talk over fd going into decline over this is overstated. As pointed out above they are part of HSBC - Britain's biggest bank by miles. They are re-positioning fd as a niche player looking to take in those earning over a certain threshold but at the same time leaving the door open to those who don't by offering the current loophole of having another product to negate the charge.

I think the predictions of no new customers coming in is just fantasy. This is not some sort of 'Gerald Ratner' comment or move. People who can deposit the required amounts, and including those who can't but will gladly take another product anyway, will continue to bank with them. This obviously applies to new as well as current customers.