Free Banking At An End?
NOVEMBER 15TH, 2006
| Credit Cards (introductory rate & period) |
Typical APR | Options |
| Virgin Credit Card 0% balance transfers, 13 months ( 2.9% balance transfer fee ) 0% purchases, 3 months |
15.9% (variable) |
 |
| Post Office Credit Card 0% balance transfers, 8 months ( 2.5% balance transfer fee ) 0% purchases, 3 months |
14.9% (variable) |
|
| Personal Loans | Typical APR | Options |
| Moneyback Bank Personal Loan | 5.7% | |
| Northern Rock Personal Loan | 5.8% | |
First Direct has announced it is to become one of the first leading banks to start charging its customers for a standard current account.
A charge of £10 a month will be levied unless a customer has a balance of at least £1,500 a month.
Chief Executive Chris Pilling defended the move saying: "I would contest whether it is the end of free banking as we know it."
He believes the banks customers are at the "upper end of the demographic profile" going on to say that only 15% of customers will be affected by the new charge.
He added that measures are available to customers to avoid having to pay the charge.
One of the measures to avoid paying for the charge is to buy a product from First Direct's portfolio such as insurance or a mortgage. This would mean the charge is bypassed.
This charge is already causing concern. With First Direct's parent company being HSBC this could be the start of all banks following suit.
Of course this could mean that consumers start to vote with their feet and pull out of their current banks increasing competition in the marketplace.
We all tend to stick with our accounts over our life showing a strange sort of loyalty to the one bank.
This could start to breed 'bank tarts' that start switching to the best current accounts in the market without the charges.
