Basic Bank Accounts
If you’ve got a bad credit rating, then you could find it easier to get a basic bank accountget a basic bank account that offers some features but is more restricted in its use than a conventional current account.
We’ll explain exactly what basic bank accounts are, who should get them, and what other alternatives are available to those with bad credit ratings.
What are basic bank accounts?
Basic bank accounts are like conventional current accounts only with restricted features. You’ll be able to withdraw money from and deposit it into a basic bank account, but you won’t, for example, get a cheque book or be offered an overdraft.
Often you’ll only be given a cash card rather than a debit card, meaning you can use an ATM, but you can’t make purchases in-store using a card.
Who can get a basic bank account?
Anyone can apply for a basic bank account and the requirements are far lower than those associated with standard current accounts when it comes to credit ratings.
However, some with particularly bad credit scores may find themselves turned down even for basic accounts. If you find yourself in this position then don’t worry, there are still options available to you which we’ll go over in the last section of this article.
Advantages of Basic Bank Accounts
Basic bank accounts are good for those who have trouble managing their money when access to credit is less limited.
Often, basic bank accounts are used by those with bad credit ratings who have been turned down for standard current accounts in the past.
Disadvantages of Basic Bank Accounts
The disadvantages of basic bank accounts are pretty clear. The reduced features and lack of access to an overdraft mean that you can do less with your account than you would otherwise be able to.
If you want to guarantee that you’ll be able to use a debit card and to set up standing orders, then you’ll be better off with a standard current account.
Bad Credit Accounts
Another option you have if you’ve got a poor credit history is opening up a specialised bad credit account.
These accounts offer more features than a bad credit account will, but will charge a monthly fee.
Bad credit accounts are not subject to credit checks so anyone will be able to open them, and those that do can usually enjoy all of the features you’d expect from a standard current account like overdrafts and debit cards.