If you are someone with a monthly income which paid to you on regular basis the banks will very happy to give you a bank account, however, if you are one of the unfortunate people that have had debt problems and a bad credit rating you may find it somewhat more difficult to get a bank account, that doesn’t mean you can’t have a bank account but it will severely curtail the benefits you would enjoy as a regular customer, the fact is banks will now provide bank accounts for bad credit and as long as you shop around you will find a product which suits you.
Which bank accounts for bad credit options are available
It could be that you have had your credit rating downgraded due to defaults on a mortgage or credit card payments or you might have county court judgements.If you fall into those categories then there is definitely an account for you, these bank accounts are specifically designed for those with negative credit. The so called basic accounts are available specifically for that purpose and although they are more expensive to run than a premium bank account they are well suited to anyone with previous negative credit.The basic account is a fully functional account, however most of the basic bank accounts don’t offer cheque books or debit cards. These accounts are the ideal bank accounts for bad credit applicants, once you have proved your ability to pay your bills on time your credit rating will begin to improve and eventually you will be able to apply for a debit card and cheque book etc.
For day to day issues such as direct debits and standing orders a basic account will be more than adequate, so now it is possible that people with debt problems or even bankrupts can enjoy some form of banking which would have been impossible in the past. By being able to show you have a bank account and that you are managing your debt it will show that you are keeping your house in order, thus avoiding future debt and financial problems. Although having a basic bank account may look like a backward step, it is really one of the only ways to get back on the financial ladder and is a way to repair your credit score. Give it a while and you can eventually get back to a regular bank account which will allow internet and telephone banking.
Applying for bad credit bank accounts
Over the last couple of years there has been a lot of banks introducing the basic bank account as part of their drive to address the need for bank accounts for bad credit for their clients and although some banks are more expensive than others they all carry a monthly fee. After the payment of the monthly fee, which is very affordable at most banks, some even offer free day to banking. If you want to be able to withdraw cash with a cash card it is possible with some bank accounts, and believe it or not it is even possible to get a small amount of interest on existing balances. The down side is that you should not expect to be given an overdraft facility as it will almost certainly be declined.
As always don’t just jump in, take your time to look around, or even better if you know someone else who applied for a basic bank account ask them how it is working for them, the fact is when you’re looking for credit help the more information you have the better prepared you will be. When applying for a one of the bank accounts for bad credit one of the questions you should always ask is how long it would take before you would be allowed to upgrade to a regular bank account, as in most cases if you can prove your trustworthiness for a period of six months to a year by keeping you account in good standing.
About Den NicholsonDen Nicholson is the senior editor here at Beating Bankruptcy, Since Den Retired from his UK business in the UK he has been blogging about ways of beating debt and in the most extreme cases beating bankruptcy. As well as detailed articles you can catch all the latest news from the UK with a focus on debt issues.
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