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Co-operative Bank Cashminder Account

To review this account further please visit the Co-op Bank Page at: Cashminder Account

Some Advantages:

  • There is no monthly account fee.
  • The account acceptance criteria include persons with poor credit histories.
  • You may apply for the account by phone or at a Co-op branch.
  • You’ll be able to conduct banking online, by phone, or at a branch.
  • You’ll receive a debit card with the account.
  • This bank account allows you to set-up standing orders and direct debits.
  • If you have no local Co-op Bank branch you can nominate a local Post Office for conducting most basic banking transactions.

Some Disadvantages:

  • The Co-operative Bank branch network is limited.
  • You cannot currently make an online application for the account.
  • You may receive bank charges for unpaid items or going overdrawn.
  • If you repeatedly have unpaid items you may see your account being closed.

Debt Management Plan Forum View: This Account Could Be Suitable For You If:

  • You don’t have debts with Co-operative bank, Smile, or Britannia.
  • You don’t often lack sufficient funds in your account to make arranged payments (bank charges could apply and your account might be closed).
  • You don’t mind the limited Co-op Bank branch network.

Nationwide Cash Card Account

To review this account further please visit the visit the Nationwide Building Society’s Page at: Cash Card Account

Some Advantages:

  • There is no monthly account fee.
  • The acceptance criteria include persons with a poor credit history.
  • You can conduct your banking online, by telephone, or in-branch.
  • You will be provided with a debit card.
  • You’ll be able to set-up standing orders and direct debit payments.
  • Nationwide has a decent branch network.

Some Disadvantages:

  • You’ll only be able to make an application for this account at a Nationwide branch.
  • Bank charges will be applied for any unpaid items or going overdrawn.
  • You cannot currently withdraw cash while using the card overseas.

Debt Management Plan Forum View: This Account May Be Suitable For You If:

  • You don’t currently have debts with Nationwide, Dunfermline, Derbyshire or Cheshire building societies.
  • You don’t commonly have insufficient funds in your account to make standing order or direct debit payments (otherwise bank charges could apply).
  • You don’t need to access cash while you are abroad.
  • You do have a local branch at which you are able to apply for this account.

ClearCash Prepaid MasterCard & icount facility (Various Fees Apply)

Some Advantages:

  • Guaranteed Acceptance. There is no credit check as part of the application process.
  • Your salary and benefits can be paid into the account directly.
  • You can pay direct debits, standing orders and bill payments from the account.
  • Bank online or by telephone.
  • Card purchase protection applies.
  • Additional cardholders can be added to the account.
  • Creditbuilder facility could help you to improve your credit rating.
  • No penalty charges for missed payments. Cannot become overdrawn.

Some Disadvantages:

  • Monthly account fees (and other fees) apply.
  • There is no way to pay a cheque into the account.
  • No branch network.

                                                              
Debt Management Plan Forum View. The ClearCash Prepaid Mastercard & icount Facility Account May Be Suitable If:

  • You are having difficulty opening a bank account elsewhere.
  • You are comfortable with banking online or by telephone.
  • You do not need to be able to pay cheques into your account.
  • You consider that a Creditbuilder facility might help you to improve your credit rating.

Further information on the ClearCash website: ClearCash Prepaid Mastercard *

thinkmoney Personal Account (Monthly Account Fee Applies)

Some Advantages:

  • There will be no credit check as part of the application process.
  • You can apply online or by phone.
  • You can bank online or by phone.
  • A debit card will be provided to you.
  • You’ll be able to establish standing orders and direct debit payments.
  • No bank charges will be applied for unpaid items or going overdrawn.

Some Disadvantages:

  • A significant monthly account fee applies.
  • No branch network.

Debt Management Plan Forum View: This Account May Be Suitable For Your Needs If:

  • You are struggling to get a new basic bank account open.
  • You wish to avoid the threat of bank charges for unpaid items or going overdrawn.
  • You would benefit from extra support with budgeting.
  • You are happy to conduct your banking online or by phone.  

Reasons To Change Bank Account Before Debt Management Plans

If you are about to proceed with a debt management plan (DMP) or other debt solutions (like an IVA or bankruptcy) you will generally be advised to get a new current account before you go ahead.

One reason for this is the likelihood that you already have debts with your current account provider. Such debts might be overdrafts, loans, or credit cards for example. These debts will generally become creditors dealt with by your debt management plan.

A failure to move your current account at an unconnected bank (that you owe nothing to) will put you at risk of “setting off”. Setting off is the situation in which a bank takes cash from one of your accounts to help repay another.

The following example may help to demonstrate the risk of setting off during a debt management plan. Let’s say you start your DMP and therefore you have not paid your bank loan directly to “Bank of NatWestShire” when it was due to be paid. If “Bank of NatWestShire” then finds out your monthly salary has just been paid into your current account (at their bank) they might remove funds from your current account to pay your missed loan instalment. You may then have no cash for essential costs like your mortgage, rent, utility bills, or council tax.

A further area of risk is that your bank could decide that they no longer want your current account business as you have other accounts with them that are now in a debt management plan. When told that your DMP includes debts owed to them there is a serious risk they’ll no longer allow you to use your current account at all.

Why Apply For A Basic Bank Account As Part Of Setting Up A DMP?

If you have already missed debt repayments your credit rating will probably be damaged already. The result of this is that banks will be unlikely to grant you a new account with facilities like an overdraft. The same may be true simply because you have significant debts even if you have not yet missed any debt payments.

There is also a risk that, if you did get a more complex account with extra features, the new bank might not wish to continue to extend these facilities to you if they were to discover your declining credit score in the future (after the debt management plan is up and running).

Basic bank current accounts will not generally offer credit facilities. However they should still offer good-quality functionality and customer service. The lack of credit facilities will generally be a bonus as continuing to use new credit after a debt management plan has started is likely to be a dangerous move for a number of important reasons.

Visit Our Debt Management Plan Forum If You Have Further Questions

If you have further questions about bank accounts you may wish to visit our debt management plan forum itself. Experts on debt management plans are on-hand to answer any questions you might have about banks accounts and the commencement of a DMP

* Affiliate link. 

Beverley Budsworth Phil Corfield Debt Management Plan Expert DMP Adviser
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