In the field of personal banking, the idea of
the bank account is a basic principle. Without a bank account we cannot take
part in any sector of the financial industry. It’s a necessary requirement in
the modern age to have a bank account to take part in society.
However, due to a number of issues such as
inflated overdrafts and poor credit scores, there are over a million people
across the country who live their lives without a bank account. This means that
many of the most basic financial practices most of us enjoy, such as shopping
online, are closed off to them.
The reason that the vast majority of people in
this category are turned down for a current account, the type of account most
of us have, is their credit rating. If a potential customer has a poor credit
rating, if they have defaulted on debt payments or have had to go into
bankruptcy, for example, they are denied a current account. This is because
banks see them as a risk.
However this does not mean that a customer in
this position cannot have a bank account. It just means that cannot have a
current account. A common misconception. There is another option called a basic
bank account.
Those who aren’t a regular fixture in the finance
industry may not know of the basic bank account or what it entails. This is
because the banks under-publicise them. They typically lose money on such
accounts because it does indeed live up to its moniker. It is basic.
A basic bank account is just a place to store
your money. There are no extra features, no overdrafts or lines of credit etc. However
you can set up direct debit payments and standing order on these accounts. They
can also be engaged in the use of online shopping and shopping by debit cards
in most retail stores.
They are geared towards those who cannot attain
a current account for one key reason. You do not typically have to pass a credit
check. All you need for a basic account is identification. This will provide
you with both a bank account and a debit card.
These accounts are available from most high
street banks. However you have to specifically ask for them, as most banks
won’t provide the relevant information voluntarily due to their propensity for
monetary loss. However you must also be careful when setting up standing orders
and direct debit payments. If you don’t have the funds to cover such a payment,
there is an automatic charge with most basic accounts.
