Current Account Help
A current account is a type of account that is offered by banks in the UK to those with decent credit. Most people with very bad credit will not be eligible to open a current account, as these accounts offer various facilities that are not suitable for bad credit customers, such as cheque book facilities, debit cards, and overdrafts.
However, there are basic accounts without these features that are made available to those with bad credit, giving them a portal into which to have their salary paid and also from which to set up direct debits, standing orders, and make bill payments.
Current accounts are convenient, easy to run, and offer a range of facilities for those with a regular income. Most consumers with a current account will have their regular income paid direct into the account.
They are able to set up direct debits and standing orders on the account so that regular bill payments can be made. They can also make one off payments via the current account by calling in at the branch, online, or via the telephone. Current accounts come with a cheque book facility and a debit card, both of which offer increased convenience to the customer when it comes to making payments. Many current accounts also offer an automatic overdraft facility too.
The world of banking is a highly competitive one, and competition between the banks is tough when it comes to getting customers to sign up to current accounts. Many banks offers freebies and incentives to tempt customers, such as a cash incentive after you have been with the bank for a certain period or vouchers upon opening the account.
The pros and cons of current accounts can vary from one bank to another, and before you make a decision on which current account is best suited to you needs you should compare a number of accounts and check the benefits as well as terms and conditions.
For instance, the vast majority of current accounts pay an extremely low rate of interest on credit balances, and this means that a current account is not the place to try and make your money work for you. Instead, these accounts should be used as tools to help you manage your day to day finances and to deposit your income.
You should transfer any money that you wish to save into a separate savings account, preferably one that offers a competitive rate of interest.
Some current accounts charge a fee in certain circumstances, and according to many experts this type of account is set to become more and more common in the UK. First Direct, for instance, charges £10 on accounts that do not have a certain level of income paid in to them (unless the account holder also has other First Direct products such as a savings account or a loan).
On the other hand many other current accounts have no charge applied.
Another thing to be mindful about with current accounts is that the penalties and charges for exceeding an overdraft limit, and also for returned cheques and direct debits, can be very high. Currently these charges are at the centre of controversy and many people are writing into their banks to claim back the charged, as regulators labelled them unfair and unlawful.
Current accounts are invaluable to those that have bills and debts to pay, and who receive a regular income, as they provide the facility to deposit your income, make payments, transfer cash, and make purchases through the use of your card or cheque. You can also enjoy the increased convenience of operating these current accounts by phone or online with most banks these days.
