Thursday 11th May 2006
Basic bank accounts are proving to be extremely popular with people hoping to avoid getting into debt, according to the British Bankers Association (BBA).
As awareness of the nations increasing debt has grown, more people are looking to find ways to prevent themselves from amassing large overdrafts and credit card debts.
Basic bank accounts have helped to achieve this as they do not have an overdraft facility.
Brian Capon of the BBA described them as a "stripped down current account" that should be regarded as a "proper account" rather than a savings account.
Since the product was launched in April 2003 1.64 million accounts have been opened; in the fourth quarter of 2005 alone a net total of 121,000 accounts were set up. The accounts can be accessed through post office branches.
The figures come amid growing complaints that banks are charging too much in the way of fees on unauthorised overdrafts; although the Office of Fair Trading has recommended a cap of £12 on fees, it may be that for those who are able to, opening a basic bank account could limit the potential to be stung by high fees for going over the arranged overdraft limit.
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