"Ending free bank accounts 'fair'"

seven-day-weekend

techno_geek wrote:

Lol, that would explain why my dad ended up with them (but not why he's still with HSBC to this day!)

Anyway...
In France, banks charge you a monthly fee for an account package that includes a small overdraft, card protection and fraud insurance, and sometimes other perks. You also have to pay an annual fee for a debit card.

Even so, no interest is paid on your current account (though that might be about to change), and the pitiful savings rates are largely dictated by the government... the most you can get for your savings is about 3.5%, or 4% if you're under 21! It's shameful, but that's the way things are and nobody really knows any different.

Furthermore, it is ILLEGAL to write a cheque that will bounce... do it once, and the Bank of France will prevent you from writing cheques for 6 years which effectively paralyses you financially - France is still big on writing cheques for everything, though debit cards are more and more widespread.

Banks only allow you to use your overdraft for 15 days in a month, and are very very stringent. Credit cards aren't very widely issued, though if you do get one it is often linked to a flexible loan.


Personally, I don't want free banking in the UK to end... i'll avoid the controversies, but fees and charges are there for a reason. Banks make loads of money as it is, but we should be thankful that free banking still exists because our european and transatlantic neighbours aren't so lucky!

Quite true, I have to pay 16 Euros a year for the bank to handle my account and it carries NO interest (although as in France you can get interest-bearing accounts but the interest is quite low).

In this part of Spain, most purchases are done by cash. Some expat friends of ours had to pay for their new car with cash. Direct Debits for bills are the norm.

So I would like to keep the UKs free banking, thanks!

M_Thomson

techno_geek wrote:

Even so, no interest is paid on your current account (though that might be about to change), and the pitiful savings rates are largely dictated by the government... the most you can get for your savings is about 3.5%, or 4% if you're under 21! It's shameful, but that's the way things are and nobody really knows any different.

With the Eurozone base rates at around 3.5% those rates you quoted are not that bad.

oldwiring

Yes onset of gree banking is recalled through time's mists, but IIRC Midland ( and others?) were seeing cost benefits from computerisation.

Queenie

regularsaver1 wrote:

do you mean rainy day funds Queenie? in emergency?

Well yes, in general terms I'm referring to rainy day funds - except in katecheshire's particular example: ...

Almost £300 in charges in one month plus loss of wages. That's how a spiral can start. We got all our payments back up to date but we had no holiday at all last year.

CopperPlate_2

Queenie wrote:

Well yes, in general terms I'm referring to rainy day funds - except in katecheshire's particular example: ...

Don't start me off. I can't remember the last time I had a holiday :mad:, oh, wait, yes about 7 years ago! Both me and OH work, getting paid good money, decent house, one young child, not new cars, no debt, paid off credit cards every month, small emergency fund for EXACTLY the situation (God forbid it never happens) described above...yet, calamity!

Why is it that some people have an odd sense of priority? We have no money to eat, damn!, we're going to have to use up the money for the holiday this year! Sorry, I'm prounouncing on a situation that I only have a few facts of, so if I've offended anyone by that, I am sorry. It's the small minority that bang on about bank charges, greedy banks, etc, yet still manage their Sky TV subs each month, a takeaway frequently, a holiday abroad each year and most of it paid for by the Government.

MickKnipfler

At the moment though, the costs are paid somehow. If the banks want to be "fairer", does that mean they will be paying decent interest on current accounts so that if you manage your account well, the costs can be offset against this or will they just be making more profit?

awayday_2

I remember in the 1980's when banks did routinely charge for current accounts often per item unless you kept 100 pounds in the account, which was a reasonable sum then! When the Building Societies were allowed to get into current account banking, in order to get their foot in the door, they offered free banking as long as your account was in credit. This was one of the reasons I opened a Nationwide FlexAcount then. The big banks followed on later. Quite ironic that the heir to the Nationwide throne is now suggesting re-introducing charges again ! So who is this man, is he ex-Barclays?

I noted from correspondence received from Nationwide over the years a certain arrogance emerging from them, this coupled with ever increasing salaries and bonuses for the top management team. This club has been a closed shop and you had to be one of the gang in order to get in and it resisted attempts by normal members to get on the board. This for a so-called "Society" and not a PLC as most of the main banks are.

Remember the banks and building soocieties gain massive interest on the cash flow from having monthly salaries paid into their coffers, this will offset the cost of running the accounts which will of course have been reduced with the computerisation of the banking system. For example the number of cheques written now are much less a proportion in a current account being replaced by direct debits and ATM use. Paper is expensive to handle which is why they would like to do away with cash altogether!

When the smoke settles on this, there will be some companies who will make massive charges for their services, some who will make reasonable charges and hopefully a few will see they will get more buisness if they offer free banking for customers who operate their accounts properly. We will have to vote with our wallets and cheque books as all good consumers should and tell the over charging arrogant money grabbing monsters where to stick their accounts. I for one will be writing to Nationwide informing that I will close my account if they start charging me on a regular basis and put my salary elsewhere.[/SIZE]

Milarky

If bank charges are forced down by the decision of the OFT (say to £12) there's no point bemoaning this will mean more expensive borrowing elsewhere (re. higher interest rates) since the house of cards represented by £30 fees was always 'illegal', I think that's now accepted. If all it took for things to change were a few complaints in the small claims court then banks were always going to have to have a 'plan B'. Looks like they'll soon be rolling it out!

On the point of 'free banking' what do you actually need a bank current account for except direct debits? All the other payment and savings functions are now being combined in internet accounts. The direct debit scheme is largely optional. A company that expects to be paid by DD is often the initiator of your relationship with a bank (The current account with a single DD example) which eventually results in you being charged.

So if it were possible to dump DDs (or simply get them through a savings account which is always sufficiently funded) current accounts would lose their cudos. Granted, credit cards replace debits cards and can only be effectively managed with a DD set up to collect the full balance - so you might as well go back to paying in cash - but in principle most of what you can get from a current account you can get from a more basic account too.

wookie_2

Midland announced that customers who kept their accounts in credit would have to pay no charges. The other banks quickly followed suit.





why should i have to pay a fee for keeping in the black?
You get stung for charges for going in the red,:mad: fair enough as long as they are proportionate to the cost of producing them, but paying a monthly fee just for the privalage stinks.:mad: I moved from lloyds several years ago because of a monthly fee, to nationwide and if nationwide were to introduce a monthlly fee, i will be voting with my feet.:mad: I am sure there will be several banks and building societys out there waiting for the fall out to offer free banking, jusy you wait and see.:rolleyes:

Justamum

What is a "delinquent account"?