Many people have a bad credit history perhaps due to a change in their circumstances such as becoming unemployed. If your credit rating is unsatisfactory and you need to open a current account then you will be pleased to hear there are a number of financial institutions that offer bank accounts for bad credit.
These days, it is difficult to run your personal finances without access to a current account that allows bills to be paid by either direct debit or standing order and the use of a debit card.
What is a Guaranteed Bank Account?
Guaranteed bank accounts are ideal for those people with bad credit and make an excellent alternative to those not attracted to a basic bank account. Why? Because no credit checks are made on you so you are almost certainly guaranteed to be accepted for one as long as you are a UK resident and are at least 18 years of age.
Bad credit bank accounts offer many of the facilities that a standard current account provides.
A guaranteed bank account tends 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.Your salary is paid into your account from which your bills are paid.
Any remaining monies are transferred on your behalf onto a MasterCard or Visa prepaid debit card for you to spend. There are various ways you can use the prepaid debit card i.e. take cash out of hole in the wall machines, online to purchase goods and services, in shops, over the telephone and it can be used abroad.
Sometimes, you will have to pay the company you open a current account for bad credit with an initial fee to set up a guaranteed bank account plus you will usually have to pay a monthly management fee. You should check the fees with who you are considering opening such an account as they may vary.
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