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Category: Banking Date: 1/14/2011
Get back to Basics
If you worry about overspending - the Basic Bank Account is for you
It's quite natural to worry about overspending, particularly if you have got yourself into debt before. The majority of current accounts on the market will allow you to slip into debt by virtue of an overdraft, be it authorised or unauthorised. But there is a type of account where you can make sure you don't go into debt and allows you to perform basic banking. It's a no frills account: you get a Cash Card (sometimes a Debit Card) and with most you can set up payments into the account, as well as Standing Orders and Direct Debits to pay money out.
The crucial difference to other kinds of accounts is that a straightforward Basic Bank Account will not allow any payments from your account that will make you to go overdrawn. This does not mean that you are safe from any nasty charges though; you still need to keep a watch over your spending to ensure your Direct Debits and Standing Orders are covered, otherwise the payment will bounce (as you can't go into overdraft) and you might be charged a fee, not to mention any other repercussions – if for instance the payment was the minimum payment on your credit card.
Watch out!
Be careful in branch when switching to a Basic Bank Account, Banks and Building Societies make less money out of these accounts and would much prefer you to be on an account where you pay a monthly subscription, so stick to your guns - get back to basics!
Article last updated 14/01/2011
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at anytime.