If you are struggling to find a suitable bank account we can help.
We recommend our clients who are in financial difficulty to choose a basic bank account.
Basic bank accounts offer a convenient place to keep money you need for everyday use. You can arrange to have wages, State Pension and benefits or tax credits paid into one. You can also pay in cheques or cash free of charge, and set up ‘direct debits’ which pay regular bills automatically from your account.
With a basic bank account you get a cash card which you can use at a bank machine to withdraw cash. Some also offer a ‘debit card’ that you can pay for items with, and get ‘cashback’; but with a basic account these will only work if there’s enough money in your account.
You don’t get a cheque book with a basic bank account, and you can’t take out more money than is in the account (‘go overdrawn’). For this reason basic bank accounts are useful for anyone worried about overspending.
Why should I change my bank account?
If the bank where you have your current account is also one of the creditors you are including in the plan, for example you have overdraft, loan or credit card with them, then it is also advisable to open a new current account at a bank with whom you have no debts.
This is a precautionary measure to ensure that you can continue to pay your normal living expenses as usual. By ring-fencing your income and expenditure from your creditors in this way you can retain some control over your finances and ensure that the agreed amount allocated for payment into your debt management plan is available.
If, however, you have no debts with the bank with whom you have your current account, then there is no need to switch your current account to a new bank.
Changing bank accounts is a simple process and will ensure your financial management program runs smoothly. Your new bank will be able to help you change existing standing orders, direct debits and other regular payments your receive.
How do I change standing order and direct debits?
Changing Standing Orders and Direct Debits can be a daunting task especially if you have a lot set up already. Your new bank should be able to help change these for you. Standing Orders and Direct Debits to your existing creditors included on the plan must be cancelled immediately to ensure your new reduced payment is met.
For more information relating to the bank accounts that we recommend please contact us.