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Why a bank charges win doesn’t mean the end of ‘free banking’ blog discussion

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Comments

  • Mark7799
    Mark7799 Posts: 4,805 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    exil wrote: »
    Fair enough, but this thread is not about the rights and wrongs of the case,
    it;s about what will be the practical effect on customers if the banks lose.

    I suspect I'll end up paying maybe £20 a month for an account averaging £1,000 in credit.

    Personally, I believe there will be an exemption to this charge for people who deposit above a specified figure every month or have a number of other products with the same financial institution (in the way that First Direct floated their idea some time ago).

    I also believe that Banks will start closing accounts of customers who regularly go overdrawn above limits and get cheques and direct debits bounced - if they can't make any money from them by way of charges, where's the incentive for the Bank to keep them open?
    Gwlad heb iaith, gwlad heb galon
  • Mark7799
    Mark7799 Posts: 4,805 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    i think this is the point that makes the case for me - yes charges are rubbish, yes some people should manage their money better but we're not all perfect and sometimes things just happen to you that makes counting receipts in bed every night to check every last penny in your account not all that realistic!

    Out of interest, how do you keep track of your finances? Some posters seem to think this requires a lot of financial ability - it doesn't!!! Mine takes about ten minutes, 2 or 3 times per week and includes behaviours like taking a decent wedge of cash out of the ATM so I can make most small payments in cash (and I've NEVER counted my receipts while in bed:D )
    Gwlad heb iaith, gwlad heb galon
  • Tim_L
    Tim_L Posts: 3,827 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Mark7799 wrote: »
    I also believe that Banks will start closing accounts of customers who regularly go overdrawn above limits and get cheques and direct debits bounced - if they can't make any money from them by way of charges, where's the incentive for the Bank to keep them open?

    They get money from interest on borrowing, and they can cross sell consolidation loans. These are valuable customers to banks.
  • Tim_L
    Tim_L Posts: 3,827 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    exil wrote: »
    I suspect I'll end up paying maybe £20 a month for an account averaging £1,000 in credit.

    Why do you think that? Read the blog entry and look at how competitive the sector is. For every bank wanting to charge there's another seeking competitive advantage. It hasn't happened yet, and it won't happen any time soon. I was being told this time last year that charging was imminent.
  • rog2
    rog2 Posts: 11,650 Forumite
    10,000 Posts Combo Breaker
    On some threads posters state that they would move to a bank which does not charge, but what if all banks start to charge? Then there is no place to switch to.

    There will ALWAYS be somebody who will offer a service at a lower cost, and, given the attraction of the 'no-fees' market, I doubt very much that the banks will 'ditch' this sector - sure they may try to inflict extra conditions, but, since they act individually in a competitive market, no bank is going to want to risk losing its share of this lucrative market.
    I am NOT, nor do I profess to be, a Qualified Debt Adviser. I have made MANY mistakes and have OFTEN been the unwitting victim of the the shamefull tactics of the Financial Industry.
    If any of my experiences, or the knowledge that I have gained from those experiences, can help anyone who finds themselves in similar circumstances, then my experiences have not been in vain.

    HMRC Bankruptcy Statistic - 26th October 2006 - 23rd April 2007 BCSC Member No. 7

    DFW Nerd # 166 PROUD TO BE DEALING WITH MY DEBTS
  • All it will take is ONE bank saying "No, we'll keep free banking (and I use the term 'Free Banking' VERY loosely.), "We'll just find another way to make our money." and the whole thing will fall apart on the bank because everyone will want to be with the afore mentioned bank. Charges for having an account will mean cooperation from the banks instead of only thinking up to their own front doors. Somehow I don't see that happening. If the OFT win, we could also see a lot of blame laying as profits go down and people are forced to resign over it.
    I Reject your reality and substitute my own.

    When life gives you lemons, throw em back and say you want CASH instead!
  • rog2
    rog2 Posts: 11,650 Forumite
    10,000 Posts Combo Breaker
    Phoenixx73 wrote: »
    All it will take is ONE bank saying "No, we'll keep free banking (and I use the term 'Free Banking' VERY loosely.), "We'll just find another way to make our money."

    Or, to put it another way "We will be more than happy with the level of profits that 'no-fee' banking generates, without the imposition of unfair penalty charges."
    ALL businesses, mine included, have had to cut margins in order to survive in the current economic climate. Why should the banks be any different?
    I am NOT, nor do I profess to be, a Qualified Debt Adviser. I have made MANY mistakes and have OFTEN been the unwitting victim of the the shamefull tactics of the Financial Industry.
    If any of my experiences, or the knowledge that I have gained from those experiences, can help anyone who finds themselves in similar circumstances, then my experiences have not been in vain.

    HMRC Bankruptcy Statistic - 26th October 2006 - 23rd April 2007 BCSC Member No. 7

    DFW Nerd # 166 PROUD TO BE DEALING WITH MY DEBTS
  • chipbeck
    chipbeck Posts: 1,372 Forumite
    1,000 Posts Combo Breaker
    I just realised that my largest 'charge' was imposed after Lloyds had changed their terms and conditions so as to be more transparent. £700 in one month ........ heaven help the likes of me I've no chance. Even tried to get it back but the lady in India told me they'd used it to pay the staffs salary for that month. :rotfl: :rotfl: :rotfl:
  • rog2
    rog2 Posts: 11,650 Forumite
    10,000 Posts Combo Breaker
    chipbeck wrote: »
    I just realised that my largest 'charge' was imposed after Lloyds had changed their terms and conditions so as to be more transparent. £700 in one month ........ heaven help the likes of me I've no chance. Even tried to get it back but the lady in India told me they'd used it to pay the staffs salary for that month. :rotfl: :rotfl: :rotfl:

    Just imagine how much the 'charges' would have been if Lloyd's had to pay UK wages. :rotfl: :rotfl: :rotfl:
    I am NOT, nor do I profess to be, a Qualified Debt Adviser. I have made MANY mistakes and have OFTEN been the unwitting victim of the the shamefull tactics of the Financial Industry.
    If any of my experiences, or the knowledge that I have gained from those experiences, can help anyone who finds themselves in similar circumstances, then my experiences have not been in vain.

    HMRC Bankruptcy Statistic - 26th October 2006 - 23rd April 2007 BCSC Member No. 7

    DFW Nerd # 166 PROUD TO BE DEALING WITH MY DEBTS
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