So what is a basic bank account? Well it is a bank account where you can do pretty much everything you can with a normal bank account, but without any sort of credit. You have a debit card that you can use day to day, you can deposit or withdraw money and you can use online banking and bank over the phone. The only thing missing is a credit card or overdraft – tempting credit facilities!
So who would use an account with limited facilities like this? And what’s the point? Well, the primary target group for such accounts is those with poor credit ratings. Particularly poor credit scores often mean that individuals are unable obtain full current accounts because of the credit check involved. A bank account is obviously critical. Employers all pay salaries into bank accounts and payments for essentials such as mortgages, utilities and so on are generally now all automated. This means that consumers really cannot realistically get by without a bank account and debit card.
Because of this very problem the basic bank account was created. It was originally aimed at people whose credit rating was poor, and is there so that they can have a bank account with the facilities necessary to live a normal life in the modern world, just without the temptation of credit. While this is the main target audience, these are not the only types who go for a basic bank account.
The accounts are becoming increasingly popular with consumers who could actually obtain a full current account but who do not wish to even have the possibility of accessing an overdraft. With a full current account, the holder can often contact the bank even if they do not already have an overdraft, to discuss taking one. Some people simply do not want this temptation. Aside from this, even full current accounts without an agreed overdraft can still go into an unauthorised overdraft, often resulting in extortionate charges for the holder. The basic bank account will not authorise payments that will take the account into a negative balance and so users do not incur overdraft charges. This is making basic bank accounts an attractive prospect for those with great credit who just want to be cautious with their finances.
A basic bank account appeals to more than just those with bad credit who cannot get a regular bank account. There are loads about, and they all have the features of regular current accounts such online banking just don’t have the charges that come with them.
If you want to open a basic bank account this article should have helped!
Tags: bank accounts, banking, Money, personal finance
