What You DON’T Get with a Basic Bank Account
Basic bank accounts have become very popular over the past few years. They started out as an alternative for those whose credit ratings had been damaged and therefore meant that they couldn’t get a regular current account because of their credit rating. Credit checks are required for a regular current account. It is now a popular choice among those who have good credit ratings due to the fact that there is no overdraft which means that there is no chance of being stung with overdraft charges.
A basic bank account is missing a few things that others don’t have however.
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.
Another lacking feature is the availability of an overdraft. As you would expect with an account specifically for those with poor credit score, there are no credit facilities whatsoever and this includes the overdraft. In fact, even if your credit rating increases over time and you get yourself into a financially sound position, you will still be unable to access an overdraft with a basic account. Instead, you would need to apply for a full current account.
Following on from the last point…..a big positive is that you are lacking penalty charges too! While you may find it inconvenient to be missing the credit features, is definitely a good thing that you will not be incurring any penalty charges as well. This is why people with good credit scores go for basic bank accounts, because if there is no credit you cannot go overdrawn even by accident. With a full account any payments would just go through whether or not you had the funds, leading to penalty charges. With the basic accounts any payments that you don’t have the money for are declined, which means that you cannot get penalised.
Of course, for those with great credit ratings who do make sensible use of an agreed overdraft or who use cheques to pay frequently, there is no point in a basic account. But for those who would rather simply not have access to credit facilities, or for those who are unable to obtain a full current account, the basic bank account provides the necessities of day to day banking and is available to a broader range of people.
Learn more about applying for a basic bank account
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