What is the difference between a basic account and..

posh_scouse

A current account with a full auth card and no overdraft.

Before I went BR I had a natwest account. No overdraft. If used in chip and pin, had to be online or declined. Direct debits, online banking, standing order, faster payments

After BR I have a basic account with co-op. No overdraft. If used in chip and pin, had to be online or declined. Direct debits, online banking, standing order, fasnot sure about faster payments as havent had to make one.

The only difference I can see is the co-op debit card won't work in mag strip machines if not on line whilst the natwest one can.

I can't see (a) what the differential is and (b) why banks happy to offer the former don't do that latter

JuicyJesus

Customers who opt for basic bank accounts tend to either:

* have poor credit histories
* have little income
* not want (or qualify for) borrowing products, thus reducing cross-sales of other products
* rely on expensive transactional methods of banking like cash, ATMs and branches, and be resistant to cheaper methods of conducting their banking (e.g. Internet or telephone)

...or usually a mixture of the above. As such banks are not particularly interested in supplying them as they cost a lot of money for virtually no gain.

posh_scouse

So for someone who uses internet banking, pays everything by debit card, and doesn't want credit, there is actually no difference

So why are so many people wanting to move from basic to *full* current accounts - given that if they have low income or poor credit they probably still won't get full auth cards and overdrafts

I don't like the coop because of their antiquated internet banking. As soon as I'm discharged I'll move to barclays basic account - ironically they were my major creditor. If barclays gave me internet now - I'd be using them - I have an account I just don't use it as I can't do internet stuff.

MoneySaverLog

I think you're confusing full auth with offline card. Basic accounts have a full auth card. Standard current accounts can have either. Then the only other difference I can see between the two, other than the facility to have a formal or informal overdaft, is the cheque book.

pqrdef

posh_scouse wrote: »

The only difference I can see is the co-op debit card won't work in mag strip machines if not on line whilst the natwest one can.

If the NatWest card will work when it's not online, the bank is guaranteeing a payment to the retailer without checking your balance. That's a form of credit.

With a basic account, that's never supposed to happen. No credit, so no need for a credit agreement.

Basic accounts can be opened without a credit check, and there should be no need to report them to credit reference agencies at all (not sure if that happens in practice).

Chip & Pin goes online to authenticate the card, to guard against cloning. It may or may not check your balance. Contactless systems usually don't, if they don't have to, since the aim is to speed up the checkout.