Reading the Guardian I recently came across Rekha Jogia’s article “Which? banking survey exposes the high costs of UK current accounts.”
The glasses came out so I could see what the article said and I thought to myself, “Really, you’re only exposing it now?” This has been going on for a long time Rekha! However, compared to “Account Maintenance fees” with foreign accounts, it could be even worse - my opinion being account fees will at some point be introduced as we are the only country that currently offers free banking.
With prepaid cards there are unfortunately fees that have to be paid. ClearCash, compared to others has kept these fees low but time and time again we hear, “as long as I can get free banking I will stick with that.” And no matter how many times my team and I try and explain – “but your bank account isn’t actually free”, it still seems to have no effect. They may not cost anything to run, but once the overdraft is hit, even by a penny, the charges kick in – instantly. And with thousands of people around the UK returning from their summer holidays abroad and kitting out their kids for the back to school wardrobe, the banks are in for a treat. As “in the red” statements arrive on doorsteps across the country, I can hear the pennies dropping now like a slot machine with a big win - and the big Cheshire cats looking like they just licked the last of the cream.
If you’re struggling with your finances, you’ll find high overdraft charges combined with low credit interest means the days of free banking are long gone.
The examples used in the Rekha’s article show how your bank account, without an authorised overdraft, can easily and quickly switch from friend to enemy – costing you over £1,000 a year.
It’s about time these “hidden charges” are exposed and I give huge credit to Rekha Jogia who has not only highlighted the overdraft charges and shown how much someone can become indebted by them, but also highlighted other unexpected charges from a “free” bank account such as the one we get when using our cards abroad.
Those lucky enough to have seen foreign soil this year will find themselves, even if not in an overdraft when they return, falling out of love with their bank…foreign transaction fees can soon end up costing you more than you think.
The upshot of this, is to research the account that’s right for you, whether it be a premier account, a basic account, a foreign exchange account or a prepaid card. Whatever choices you make in order to manage your finances, it’s vital you make it your business to know the fees, penalties and charges. Terms and conditions are in small print for a reason – go the extra mile – take your time and read them – they could make a big difference to where you put and how you manage your money.
Want to know more about managing money effectively – check out BudgetMaster now.
