Time to end free banking? Poll help needed

gt94sss2

YoungNick wrote: »

I confess that I haven't read the whole thread, but many responses show that a poll will be useless. It's hard to grasp that "free" banking is not free, because people who stay in credit pay in forgone interest, and (usually) by paying when they call their bank on its revenue-generating 0845 number.

A minor point but commonly mistaken - 0845/0870 numbers are no longer revenue generating for the company which has them

0844/0871 are revenue raising.

Regards
Sunil

Andystriker

antrobus wrote: »

If you give some cash to your other half to 'hold for you' then it remains your money. If, on the other hand, you lend her the money, it becomes hers to do with as she pleases; she merely has to repay that money at some later date in accordance with whatever you've agreed. When you deposit money in a bank account, you are lending that money to the bank, and it similarly becomes theirs to do with as they please etc. Like I said before, if all you wanted was for the bank to keep your money for you, you should have got a safety deposit box.

I get the feeling you are peeing in the wind here, antrobus

Andystriker

innovate wrote: »

Those now whining that this would be at the expense of customers who have current accounts not in credit should be reminded that the only sustainable way forward for them is to get themselves into a no-overdraft position, on a pretty permanent basis.

Why on earth would any of us want to have a current account with a bank that charges us various fees

Just about says it all.

rmg1

Andystriker wrote: »

I get the feeling you are peeing in the wind here, antrobus

As I'm obviously not explaining myself very well, I'll bow out of this conversation and leave you to it.

Rafter

The government want people to have bank accounts - it is a much cheaper and safer way of moving money for benefits, salaries and purchases than cash.

The banks have a privileged position of holding those cash balances that allows them to lend at an interest premuim to make profits and cover costs and credit losses.

I don't think the poll as drafted will tell you anything you don't already know - that the vast majority (generally those who don't use an overdraft) would prefer the status quo of free banking in credit.

I'd ask the questions in the following way.....

1. do you regularly use your overdraft or are you generally in credit?

2. Do you believe that banks should offer free simple accounts which, in return for not paying credit interest and from charges levied on retailers and businesses: offer a debit card, online and telephone servicing and free cash withdrawals at your own banks ATM machines?

3) Do you think that more expensive services such as writing cheques, overseas card use, branch based/ face to face banking should be paid for by:

A) The Status Quo: Hidden and obscure charges and commission on foreign transactions, higher overdraft rates and fees for borrowing customers, inappropriate cross selling of investment, insurance and packaged accounts to less well educated and vulnerable customers.

Modest but regulated and clear charges for these additional services that reflect cost plust a modest profit margin. (pay as you go)

C) Different monthly fee or minimum balance requirement to avoid these charges and give access to enhanced features - a packaged account. (a bit like a phone contract with a 'free' handset)

I don't mind whether it is B or C - In fact I think it should be both so you can see if your package is worth it, but A isn't 'fair' or sustainable and as long as basic banking is free I don't see why I shouldn't pay a bit extra to avoid others being ripped off.

R.

innovate

Rafter wrote: »

I don't see why I shouldn't pay a bit extra to avoid others being ripped off..

Hmh.

I personally wouldn't mind if everyone above a certain income had to pay a bit extra if the money was used to prevent people from being ripped off. How and whether that could be implemented is another question.

I certainly would not want to pay even one single penny to quiesce anyone who thinks they should be paid, otherwise it's their right to rip people off. I consider such people criminals who should be behind bars.

jjlandlord

Rafter wrote: »

I don't see why I shouldn't pay a bit extra to avoid others being ripped off.

The naivety of some is astounding and that must warm hearts in the City and Whitehall.

James_Lahey

I have a no monthly fee lloyds vantage account which pays fairly competitive interest on my balance (upgraded after visiting branch and suggesting I'm thinking of changing.) I make sure that I never go overdrawn which makes my banking cheaper than free.

Whilst I am emphatic for those who incur fees, my vote is for no change (btw I'm not on a high income - just tight as a ducks posterior.)

bargainbetty

Just a small point, but perhaps we should have a look at the fee structures in place in other countries where the fee-paying model is held up as an idea.

We are all talking about 'small' charges for services, but a friend in the US told me that to use a bank other than her own, even for an ATM enquiry (not cash withdrawal) costs $3.00. To take the cash out ups the charge to $5.00. Direct debits taken by the service provider are free, due the the charges being at the other end, but standing orders are charged at $0.50 per time and one-off payments via the internet/telephone banking are $2.00 (which is why she uses Paypal for as much online purchasing as possible, as that works on a direct debit thing instead). I do not consider $5.00 to withdraw cash a small fee. I get angry at the £1.85 some Link machines charge.

However, there is an argument for a mobile-phone type tariff. If I were to pay a fixed rate per month, and get telephone and internet banking, a bundle of ATM withdrawals (say 10 free from any provider per month, plus unlimited from my bank), a bundle of payment transactions (debit card purchases), and a lower overdraft fee. If you go over your allowance, then you pay a bit more...?

If that is introduced, I want an increased interest rate on the money I have in credit. If I'm going to pay directly, then I want the hidden charges reimbursed!

Personally, I'd like to keep the status quo - but if not, bundle tariffs seem like the most sensible option for the consumer.

dzug1

innovate wrote: »

Why on earth would any of us want to have a current account with a bank that charges us various fees

It's not a question of wanting.

It's a question of what is offered as the conclusion of the collision of the forces of imperfect suppliers, imperfect market forces, imperfect regulation and imperfect customers.

If you regulate too little or in the wrong way consumers will lose out - if you regulate too much or in the wrong way the suppliers will eventually say we don't want to be in this market or work out other ways round it

The problem with this poll is that most people will go for the option that benefits them and is therefore 'fair'

Or maybe it's not a problem where we go next and where we'd like to be are two different things