What You DON’T Get with a Basic Bank Account

What You DON'T Get With a Basic Bank Account

Over the past few years the basic bank account has become more and more popular. At the start it was there for people who had a bad credit rating that led to them not being able to get a normal current account due to the fact they would need to be credit checked. Since then it has not only been those with bad credit ratings applying, it has been people whose credit rating it perfectly healthy. This is because with a basic bank account there is no overdraft, and therefore no overdraft charges. There are however some features that you are missing from a basic bank account, and these are detailed below.

First of all is the cheque book. Although the humble cheque is being slowly phased out, it is still used and is particularly convenient when you need to send a payment through the post. The majority of basic bank accounts lack a cheque book – though almost invariably they do have the facilities to pay cheques in if you receive one.

Overdrafts are another feature that is missing. Essentially the overdraft is the reason for the credit check in the first place, and if you have a poor credit score you would fail it, so as you would expect these accounts do not even give you the option. Even if you manage to repair your credit rating, you will at no time be able to get an overdraft from such an account, you would then need to apply for a regular full account.

Penalty charges! Yes, while it might be an inconvenience for the basic bank account to lack and overdraft and cheque book, it’s certainly no inconvenience that it lacks penalty charges too. It is this, as mentioned previously, that is the attraction for consumers with great credit scores too. No access to an overdraft means you cannot even accidentally go overdrawn. Where with many full current accounts, a payment that takes you to an unauthorised overdraft would be processed anyway (and you of course would be charges) the basic bank account means that any payment for which you do not have sufficient funds is simply declined, this ensuring that you cannot incur any hefty unauthorised overdraft fees.

If you have a good credit rating and are sensible, only spending within your means and agreed overdraft, then you don’t need to go for a basic bank account, but if you don’t trust yourself with credit facilities or if you have a history of bad credit, going for such an account gives you the services you need from banking without the risks of debt.

Find out more about getting a basic bank account

categories: banking, bank accounts, finance, personal finance, basic bank account, bad credit