Bank accounts for bad credit rated individuals are available in the UK from financial institutions that specialise in offering such current accounts as well as many of the major high street banks and building societies. You can often apply online for an account that usually comes with a debit card. Those companies specialising in providing these basic bank accounts do not usually undertake a credit check whereas the banks tend to still carry out a credit reference search. Therefore, bank accounts for people with bad credit can usually be opened with someone even if you are heavily in debt including being bankrupt. Below are some of the specialist companies that provide bad credit bank accounts.
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- Credit Check Undertaken?
- Application Fee
- Monthly Fee
- UK ATM Fees
- Debit Card
- Direct Debits
- Standing Orders
- Pay in Salary/Benefits etc
- Online Banking
- Other Benefits
- £12.50 (£17.50 for joint account)
- £1.50 ATM UK
- Prepaid Debit Mastercard
- One-to-one Account Manager
- £9.95 (Deluxe Account)
- Free ATM withdrawals in UK (Deluxe Account)
- Prepaid Mastercard
- Cashback rewards and Free Purchase Protection
- £0.50 ATM UK
- Prepaid Visa Card
- Yes (fees payable)
- Cash-back rewards
- No for Ffrees Zero Account
- £0.75 ATM UK
Withdrawal Fee – Ffrees Zero Account
- Visa Debit Card
- Ffrees Points
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(The above fees are correct as at 22nd January 2016. Other fees may apply. Please check the individual companies websites prior to applying.)
Who can apply for a bank account for bad credit rated individuals?
The application criteria may vary between the different companies offering these types of current account but such accounts tend to be suitable for those UK residents over the age of 18 who have an adverse credit history although there is nothing to stop someone applying if they have a good credit rating. For instance, you could apply if you are employed and in receipt of a weekly wage or monthly salary, unemployed and in receipt of benefits, retired and getting a pension or if you are self-employed.
How do you apply for a bad credit bank account?
The application process for this type of account may vary between providers with one option often being that you may be able to apply online by completing an easy to fill in form.
An instant decision is frequently provided especially if no credit checks are undertaken by some financial institutions.
The banks, building societies and other financial institutions may even be able to confirm your identity and address by electronic means but, if not, you would be asked to provide documentary evidence such as a current passport and recent utility bill.
What does a current account for poor credit customers provide?
Specialist bad credit bank accounts like the ones provided by Card One Banking, Ffrees, Cashplus, eccount and icount offer many of the facilities that a standard current account provides.
Some tend to be operated on a “managed” basis so you can speak to a member of staff who will go through your personal budget to establish how much you need to set aside to cover your household bills. Any remaining monies are then often transferred on your behalf onto a MasterCard or Visa prepaid debit card for you to spend. There are various ways that your debit card can be used such as taking cash out of ATMs, purchasing goods or services online, over the phone or in high street shops and, in many cases, it can be used abroad.
Your salary, pension and/or benefits can be paid directly into your account. Many offer the facility to pay cash and/or cheques into your account through a variety of outlets.
You may be able to manage your account either online or over the phone which enables you to access things like your balance and view your transactions 24/7.
You can set up either direct debits and/or standing orders to pay your regular household bills such as your mortgage repayments, council tax, rent, utility bills and home insurance.
We have not come across a bank, building society or specialist provider of such a current account that will issue you with a cheque book and very few will make available an overdraft facility.
If you have a poor credit history and are interested in a credit card then you may wish to read our Vanquis Credit Card Review.
Are there any application and/or monthly administration fees for a basic current account?
In the main, the banks and building societies do not charge either an application fee or a monthly administration fee for their basic bank accounts and they do not normally charge you to use an ATM in the UK to take out cash.
Many of the specialist providers of what is also sometimes referred to as a Guaranteed Bank Account charge an application fee and/or a monthly administration fee. They may charge other fees such as to use an ATM to withdraw cash in the UK and overseas. You should check their websites for full details of their fee structures before applying to open an account with one of them.
There are many providers of bank accounts for bad credit rated people including banks, building societies and other specialist companies so, even if you have a poor credit history, you should hopefully be able to open an account. The banking services offered by them all are fairly similar with basic bank accounts enabling you to have monies paid in, pay your regular household bills by direct debit and/or standing order, use a debit card to purchase goods and services and manage your account online and/or over the phone. As mentioned earlier, do remember that most of the companies offering bank accounts for people with bad credit listed in our Bad Credit Bank Accounts section charge an application fee and/or monthly administration fee plus there may be other charges such as to use an ATM in the UK, whereas most of the major banks and building societies do not charge such fees for those types of basic current accounts.