Do you pay for a bank account?

Ignatius_A

I have a £450 overdraft at barclays. Unfortunately, this is not my main current account, and so to provide me with this facility (and a large number of others that i DON'T USE!!! - like travel insurance, mobile phone insurance) they charge me the princely sum of 12.50 PER MONTH!

The interest on this overdraft is something like 6% - which means that it's way down my list of things to pay off (i have a credit card at 20%)

BUT - let's work the sums out another way....

6% interest on £450 is £2.25 per month

2.25 + £12.50 = £14.50 - so it's costing 14.50 per month to keep this overdraft

Work it out AS IF this whole sum is interest - and it comes to an equivalent of 38% interest - very much a priority debt.

For some of you, I expect that this is old news. This thread is not for you.

I put this here for those of you who (like me) haven't yet given the matter sufficient thought

- or maybe i'm just plain daft and should have seen this from day one:o

Conor_3

Natwest run a similar type of account. It works out to be quite good if you can actually take advantage of the offers but as you found, most of them are useless.

Badger_Lady

I've actually just started paying for a premium account for the opposite reason:

I had a student account with Barclays and used an overdraft of £2,500 (yeah, I know!), which was a low interest rate that I can't remember. However, after my "graduate" period ran out, the interest rate was being hiked up.

By paying £12 a month for a First Additions account, this rate reduced by enough to counter this charge, and I got all the rubbish on top as well (and it is rubbish - why do they keep trying to tell me it's so wonderful?).

The only problem with this is that they then started bombarding me with marketing materials WITHOUT my permission, despite being a long-term opted-out customer! It took several months to finally put an end to all the junk mail...

If it weren't for the overdraft, I'd never deliberately go for a paid account.

immoral_angeluk

I would never pay for a bank account.. I think it's a damn cheek as they'll be making interest off your money anyway!!!

Crown

Looks like you have a another lightbulb moment with regards to these hidden extras on all types of accounts. With regards to bank accounts I have always hated the fact that they lure you in with these "offers" of free breakdown cover ect.

I recently spoke to a family friend at a BBQ who said that he a Plus account that he pays £15(?) a month for and he gets Breakdown cover and soe type of personal shopper service. I pointed out to him thaty would mean he's paying £180 a year when he could get AA cover for £60 (plus cashback if he was on the ball!) and still be quids in as his wife seems to love to shop and wouldnt give a personal shopping assistant a chance!

You life and learn.... I have found that for my purposes a basic account is fine now I have my spending under control and use online banking for most things. The added features of OD was what lead us into debt and im glad I no longer have the facility.

If your doing the mathematics of the debts you wait until you work out your mortgage and how much you pay in fees ect.... I wish you luck on your debt elimination

Lucy1982_2

I have refused to pay for my account. Lloyds did try to talk me into it until I explained that thanks to this site my RAC cover was the same level as theirs (but cheaper) and my phone was covered on the home insurance, I don't travel and it really seemed like a waste of time.

They stopped bugging me for it and she didn't even try to seem me a consolidation loan... Oh the weight that Martin's name carries!!

Fortheloveofmoney

Ignatius_A wrote: »

I have a £450 overdraft at barclays. Unfortunately, this is not my main current account, and so to provide me with this facility (and a large number of others that i DON'T USE!!! - like travel insurance, mobile phone insurance) they charge me the princely sum of 12.50 PER MONTH!

Hi there! Sorry if this an obvious question but have you asked them if they would provide this facility even if you down grade your account? I used to have a Barclays Additions Plus account which cost me £14.50 per month :eek: Then i saw the light and downgraded back to an account I no longer pay for. I still have the debit card, cheque book, £100 guarantee card and the overdraft limit but don't pay them a penny (no longer overdrawn with them). It's not my main account anymore so they don't even get my salary :rotfl:

In fact I will be closing the account as soon as I have my bank charges back :rotfl:

It's worth asking.....

supersavershal

I have a bank account with lloyds tsb and they charge me £7.00 each month.I changed my current account ages ago but lloyds tsb would not let me close the account until I had paid my loan off with them.They would not let me do a dd from my new account.At present I owe £296.34 on the loan and pay £30.00 a month (but im trying to clear it before xmas).So effectively as I dont use the account for anything else and dont use the benefits im paying an extra £84 a year for the privelage of having the loan as well as the interest on it.Its daylight robbery but until loan is paid im stuck with it.

Ignatius_A

Badger_Lady wrote: »

I've actually just started paying for a premium account for the opposite reason:

I had a student account with Barclays and used an overdraft of £2,500 (yeah, I know!), which was a low interest rate that I can't remember. However, after my "graduate" period ran out, the interest rate was being hiked up.

By paying £12 a month for a First Additions account, this rate reduced by enough to counter this charge, and I got all the rubbish on top as well (and it is rubbish - why do they keep trying to tell me it's so wonderful?).

The only problem with this is that they then started bombarding me with marketing materials WITHOUT my permission, despite being a long-term opted-out customer! It took several months to finally put an end to all the junk mail...

If it weren't for the overdraft, I'd never deliberately go for a paid account.

I've created the following graph to compare the costs of a funded bank account (barclays additions, 11.50 per month 9.9% interest on agreed overdrafts over £100) with a standard credit card (barclaycard 15.9%)

Enlightening, I think (click the thumbnail to see it full size)

Ignatius_A

Fortheloveofmoney wrote: »

Hi there! Sorry if this an obvious question but have you asked them if they would provide this facility even if you down grade your account? I used to have a Barclays Additions Plus account which cost me £14.50 per month :eek: Then i saw the light and downgraded back to an account I no longer pay for. I still have the debit card, cheque book, £100 guarantee card and the overdraft limit but don't pay them a penny (no longer overdrawn with them). It's not my main account anymore so they don't even get my salary :rotfl:

In fact I will be closing the account as soon as I have my bank charges back :rotfl:

It's worth asking.....

Might indeed be worth asking - I'll be looking into it

Badger_Lady

IgnatiusA wrote:

I've created the following graph to compare the costs of a funded bank account (barclays additions, 11.50 per month 9.9% interest on agreed overdrafts over £100) with a standard credit card (barclaycard 15.9%)

Barstewards won't give me a credit card. Guess they know what they're doing :-)