A Bank Account For Non-Drug Dealers and Generally Nice Folk (Halifax)

Member Name: marandina

Product:	Halifax
Date:	08/08/02 (3646 review reads)
Rating:

Advantages: Should be available to most people, No frills and easy to understand

Disadvantages: Nil interest, Hasn't got full facilities

With me about to go on me hols, I'm feeling a bit socially aware so I thought I'd slip one in that may even help a few folks. In a world of "haves" and "have nots" it's easy to be isolationist about the most basic of things we maybe take for granted.

Social exclusion is one of the current in-phrases within this Government's remit. It alludes to everyday aspects of normal life that are denied to a certain section of the population. There is every possibility that this has been the status quo since, well, forever really but there are moves afoot to change this. Working parties are examining banking practices at the moment to see just how big this problem is. After all, imagine life without a bank account although millions manage it and with a deal of success too. It is a subject that's appeared a lot over the last few months in the financial press. After all, with a socialist government it's hardly fair that some people have not got similar rights to others. Of course, banking is just one aspect of social exclusion but it fits in nicely with the product recommendation within this opinion.

Bank accounts are invariably essential at some point because employers like to keep costs down by transmitting their wage bills via BACS (Bank Automated Credit System). Generally, this means a 3 bank-working day delay in transmission and receipt of funds from employer to bank. It's a whole lot easier than some bozo sitting down on Sunday night having to split wedges of cash in little brown paper packets with slips attached. So one of the first things you may be asked to do when you start a new job is sort a new bank account out. The information the employer is interested in is the 6-digit bank sort code and the 8-digit bank account number, which enables them to identify your account when sending the money through.

This sounds straightforward but is it? First of all, you'll have to overcome the ubiquitous
money laundering regulations. To make sure that you are not a drug dealer that's trying to cover your tracks by placing your ill-gotten gains through financial institutions, you'll have to come up with suitable proof of your name and address. This bit's probably outside the remit of this opinion so assuming you've managed that then you now need to negotiate the bank's credit score (when I say bank, it could just as easily be a building society or post office etc).

OK, if you haven't encountered the dreaded credit score then it's a predictive tool used to assess your credit worthiness and, thus, how likely you are to be a good customer. Basically, all of the information disclosed is allocated points. The total points are added together to give the applicant an overall score. To pass for the account you will need to meet or exceed the pre-set points score based on the bank's latest criteria (credit scores can be changed at any time according to quantity and quality of business the bank wants to take). The institution will set the credit score as high or low as they feel. Key factors tend to be how long you've been in your job; how long you've been at your current address and the like. A credit search is also done through companies like *Experian or Equifax to see if you've any skeletons in your closet. What they will do is examine their credit files for addresses you've lived at for at least the previous 3 years to see how many searches have been logged against you along with if there is any history of missed payments or, even worse, defaults and CCJs (County Court Judgements). All of this information goes into the credit score.

Herein lies the nub of the problem. Banks have the power to exclude large numbers of people by setting the bar at a certain level. For example, you are actually at a disadvantage by not having any existing credit as the bank has no track record to assess you with. For some, thi
s can be catch-22, as they can't get a track record without getting some sort of credit in the first place.

Halifax Cardcash may be a solution. It's no longer called Cardcash as it's been swept into the overall branding for Bank accounts and so, is simply called Halifax Bank account. It has evolved a great deal over the last 12 months with the inclusion of a chequebook to go along with its pre-existing facilities. These include:

 Facility to set up standing orders and direct debits.

 Bill payment facilities, which mean you, can pay many household bills at the machine. Payment is transmitted through BACS and you're advised that payment can take 5 bank working days.

 ATM card with solo. Solo is a poor man's switch where you can pay by swiping your card at outlets with Solo facilities and money should only be taken where the balance allows (no overdraft facilities on Cardcash). A disadvantage is actually finding outlets that have the Solo symbol (Often garages are the worst offenders which I where people want to use their plastic payment method the most). The choice of cash machines is huge with funds available through Halifax, Link and HSBC machines. No charges apply although you may still encounter the odd machine operator that might outside of these mentioned. They are obliged to display this on the screen before you confirm the transaction.

 Access to telephone banking. Once you've opened your account you can register your security details with the telephone operation based in Halifax Direct. This allows you to do most routine transactions over the telephone e.g. check your balance, pay bills. It's a very useful service as it's there 24/7, 365 days a year!

 Online banking is available too complimenting the telephone service.

 You can access your money abroad through the Cirrus and Maestro scheme so where ever you see this s
ign abroad you can access your funds (note the fees charged - £1.50 service charge + 2.25% conversion fee based on the transaction amount)

So, what are the disadvantages? Well, Cardcash won't suit everyone. If you want the full facilities i.e. overdraft facilities, switch, cheque guarantee cards then you'll still need a full bank account. Whilst the Halifax option is still competitive at High St level you may well want to shop around and look at operators like Intelligent Finance, Cahoots and so on. Unless you are under 18 years of age, there is a nil rate of interest applied to Cardcash accounts so you won't get seriously rich off the proceeds!

It is conceivable that, despite the honourable proclamations, you could still be turned down for a Card cash account. Since the inclusion of the cheque book facility, a partial credit score has been introduced. It's certainly not as onerous as the full credit score mentioned earlier and more people will be eligible for Cardcash but if you do have a history of bad debt then you could still be turned down. Again, this isn't the end of the world as you can always open an ordinary savings account that isn't subject to credit scoring (Often the bank omits to tell you this) but you won't get things like standing order and direct debit facilities etc.

Cheque clearance is 5 bank working days as opposed to 3 with the full bank account which some folks find frustrating.

So Halifax Cardcash is aimed at those folks that wouldn't ordinarily be able to open a bank account. It is possible to upgrade it to a full account replete with cheque guarantee etc after the account has been up and running for a few months.

You can open a Cardcash/Bank account online at Halifax.co.uk or by telephoning 08457 20 30 40. Minimum opening balance is £50 for over-18s and £10 for those younger than 18 years of age. Alternatively, you can always call in to your local branch (with s
uitable proof of name and address, of course) and give the poor bank workers something to do (ha ha, they're busy enough at the best of times but will be only too glad to see you).

Thanks for reading and hope this helps.

Marandina

*It's a good idea to write to the credit bureaux like Experian from time to time to see what's on your file. It only costs £2 and a reply is usually forthcoming within 7-10 days. It's all too common to find that other people's bad credit history is affecting yours maybe just because you are living at an address that has had bad payers living at it before you.

**Getting a specific cat for this sorted pronto but wanted to squeeze it in before my hols.

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