Banks find another way

Who is thinking of making money from you – Part 2

It seems banks have found another way to rob their customers.

Until recently, banks were permitted to charge their customers exorbitant penalty fees. Thanks to the OFT (Office of Fair Trading) this is no longer possible. The OFT is investigating current account penalty fees and is expected to clamp down on banks when their investigation is completed.

Realising the door to the riches they have enjoyed over the years will be close, banks have resorted to opening a new door of riches by providing customers a “Premier” account.

What is a premier account you ask? A premier account is a current account with add-ons, such as free mobile insurance, breakdown cover, discounts at hotels, etc. your bank charging you a monthly fee for the privilege of these add-ons.

The interesting thing about this account is, unlike a penalty, which you pay when you go overdrawn and which may not happen so often, you are paying a monthly fee, so the bank has a secured monthly income from you. And as I understand it, banks are already taking in almost 900 million pounds-worth of fee income annually. Thanks to you.

Of course, you will have to sign up for such an account before your bank starts charging you. The point is do you really need a “premier” account? What benefit is a mobile phone insurance to you? After all, you can get a new phone for £20. Why would you pay for a service you may never use? Even if you did need breakdown cover for your car, wouldn’t you get it for the same price or cheaper by going direct to the AA, RAC et al

I always tell people who moan about not having enough money or who want to save up to start by scrutinising their bank statements for unnecessary payments. This is one such payment you do not need to make.