Marks & Spencer launch first free current account which gives account holders £100 free for switching
Marks & Spencerís have today launched their first free-utilise current account, signalling their intention to ascend to supremacy within the banking sector.
The retailing giants banking department identified that their new free product is part of a long term initiative to try and bring ìthe trusted Marks & Spencer brand valuesî to the financial sector so that competition levels and the number of high street bank choices available to consumers is enhanced, for the benefit of customers nationwide.
The all new M&S Current Account comes with a number of attractive features, including a 0% monthly charge for holding the card, and a number of perks and incentives for switching, including a £100 free gift voucher for all customers who switch.
The bank already has two separate current accounts on offer- the Premium Current Account and the Premium Current Account with added insurance- both of which come with a monthly charge of £10 and £17.50. Both also come with a number of freebies, such as in-store M&S vouchers and travel insurance.
Finance experts have praised M&S for seeking to raise competition levels in the high street banking sector, and have said that their recent products have clearly illustrated that they are up to the challenge of establishing themselves as a big time player for years to come.
Other attractive features that account holders can potentially attain from the M&S Current Account are a rewards scheme, no minimum monthly contribution policy, small charges for utilising foreign cash machines and a cheaper overdraft deal than many other high street banks offer.
The account grants users an instant £500 overdraft, of which users can enjoy spending the first £100 interest free. For all overdraft expenditure after the first £100 is spent, the interest rate rises to 15.9% AER, though users will enjoy the news that there are no charges for using the overdraft in the first place.
Moreover, the 15.9% rate represents one of the best in the market at present. To put this into perspective, if someone was to use a £600 overdraft in full, seven days a month, the overall interest cost would be just £18, compared to a market average of £56, based on an evaluation of 16 current account suppliers.
And the bank does not apply a transaction charge for account holders making withdrawals abroad, though they do charge a foreign exchange fee that amounts to 2.75%.
Card holders can also obtain loyalty points for making purchases with their card, and will receive a single point each time a £1 is spent, totalling 1p per point. The points can then be spent in-store, meaning that users can enjoy banking and shopping with the same provider.
However, despite the overwhelmingly positive nature of the card, there are some shortfalls to its offerings that are behind some of the new features on accounts being offered by rivals this summer.
Significantly, the card does not dual function as a current and savings account, like Nationwide has done, and as such account holders do not stand to be paid interest on balances paid into the account, which diminishes its appeal fractionally.
Nevertheless, the bank has generally garnered a positive response to its endeavours since it joined the financial sector, and a bank spokesperson has recently pointed out that if ì"offers the longest opening hours of any high street branch in the UK, including evenings and weekends".
It is also widely believed that the new release is part of a new marketing technique that high street retail stores are employing, which has seen giants such as Sainsburyís and Tesco enter into the finance sector in order to establish relationships with their customers on a closer and deeper level.
David Black at research site Consumer Intelligence added: "Providers really want current account business because it's their key relationship builder. Both Sainsbury's and Tesco say their banking customers spend more in their stores than other customers, so M&S stores could also benefit."
Compare Current Accounts with MoneyExpert.