posted
Oh give it a rest. If there was one bank out of all of them which introduced an account with no charges, who wouldn't sign up for that account? The only reason they're doing this, literally the only reason, is to generate more custom for themselves. And because one bank has done it, they all must do it otherwise they'd soon find themselves with significantly fewer customers.
As I say, you need to look at banks as competing businesses, and their accounts and loans and credit cards as being competing products. Whichever one costs the least and gives the most will inevitably be the most successful. Banks know this.
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posted
They're doing it because you can only get that account if you have a mortgage with them and obviously mortgages are very profitable and I would imagine that generally when people get to the stage of actually having a mortgage they have proved that they can handle their finances and so are much less likely to be getting overdrawn charges, so they're not going to lose out on much from those customers for charges but will obviously make lots from them from having their mortgage with them.
I really doubt anyone is going to offer a free standalone current account that has no overdraft charges as it really isn't going to make much money.
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My account has an emergency fund beyond my overdraft limit, which is charge free. Though I pay about £5 a month for my type of account. Which suits me fine really.
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Actually I have an emergency thing beyond my overdraft as well and my account is free. I've not actually gone into my normal overdraft for about 6 years though and have never touched the emergency part of it. I think if I got into the emergency bit they would charge something like 17% interest pa on that part but no fixed penalty.
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posted
Yeah I think mine works basically the same. I suppose these things are only available if you have a reasonable credit rating though.
I do go into my overdraft but I never go anywhere the limit, and the limit is less than I take home each month. I know a few people who literally never come out of their overdrafts. I find that idea terrifying.
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posted
So you could have used that as your current account, paid off your debt, and then you would have had an interest free overdraft of two thousand pounds to drift into during difficult months without incurring any charges at all - not even interest. Doesn't that just support Ringo's point about people not bothering to manage their own finances?
Also, when you have a chunk of overdraft sitting there for a year or two and you're not even being charged interest on it... how can you complain that the system is unfair?
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