Letter In The Telegraph Today.
News0 min ago
crazy banks!
4 Answers
As i continue in my struggle for a bank account offering a debit card for people with not too perfect credit history and low income ( i hate carrying cash!!) I have comme accross comething i find odd. How come banks offer visa electron and/or solo cards to people aged 16 and17? They are then upgraded to full debit cards once the child ahs reached 18. Why doesn't a bank realize there are people out there that would also like this facility and have a regular income, which i'd be suprised if a 16 year old did! (no offence to alll those hard working teenagers!!!)
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Some facts:
You can still go overdrawn with an Electron/Solo card so there is still risk attached to these accounts (youth or adult).
Customers under 18 are not legally responsible for debt so, again, the Bank of Stevie risks losing money.
If any customer gets into debt, it costs the Bank of Stevie money to chase them to pay it back & many such debts are sold to 3rd party companies for significantly less than the amount owed.
However, "wiv da kidz" it's a risk worth taking & a cheap way to recruit customers who may go on to take out credit cards, loans and mortgages with the Bank of Stevie, thus paying lots of interest & generating profits.
The vast majority of yoof customers go on to run trouble free accounts so again, there isn't as much reason to fear that money will be lost.
Statistically speaking, those who have gone into debt once are much more likely to do so again in future so you have to think about how decisions are made (predict the future based on past behaviour). Customers with a "not too perfect credit history" have amply demonstrated that when given credit, they get into trouble and cost the Bank of Stevie money. Until these costly little demons have consistently demonstrated otherwise they get no lollipops.
If you were considering lending a friend �50 of your hard earned cash and he/she had consistently illustrated that they were unreliable with money and that there was a higher risk of being out of pocket would you still lend them the money?
Until Oxfam do current accounts you'll have to rely on your bank making decisions based on cold hard financial facts rather than being charitable to customers based on them being "nice people".
Lesson over & no offence to all those irresponsible bad debtors out there (that was a joke!).
You can still go overdrawn with an Electron/Solo card so there is still risk attached to these accounts (youth or adult).
Customers under 18 are not legally responsible for debt so, again, the Bank of Stevie risks losing money.
If any customer gets into debt, it costs the Bank of Stevie money to chase them to pay it back & many such debts are sold to 3rd party companies for significantly less than the amount owed.
However, "wiv da kidz" it's a risk worth taking & a cheap way to recruit customers who may go on to take out credit cards, loans and mortgages with the Bank of Stevie, thus paying lots of interest & generating profits.
The vast majority of yoof customers go on to run trouble free accounts so again, there isn't as much reason to fear that money will be lost.
Statistically speaking, those who have gone into debt once are much more likely to do so again in future so you have to think about how decisions are made (predict the future based on past behaviour). Customers with a "not too perfect credit history" have amply demonstrated that when given credit, they get into trouble and cost the Bank of Stevie money. Until these costly little demons have consistently demonstrated otherwise they get no lollipops.
If you were considering lending a friend �50 of your hard earned cash and he/she had consistently illustrated that they were unreliable with money and that there was a higher risk of being out of pocket would you still lend them the money?
Until Oxfam do current accounts you'll have to rely on your bank making decisions based on cold hard financial facts rather than being charitable to customers based on them being "nice people".
Lesson over & no offence to all those irresponsible bad debtors out there (that was a joke!).
ginger 69, it IS possible to become overdrawn with an account offering a solo or electon debit card. I worked for a high street bank for 17 years, I know.
The card itself works by checking the available funds in your account, so as long as the funds are available at the time of the transaction, it is authorised. However, inbetween the transaction being authorised and it actually debiting your account, a cheque or direct debit could be presented. It would be returned of course, as there were no funds, but most banks can and do charge for unpaid cheques/direct debits. The card payment is guaranteed so this would take you overdrawn straight away. Most / a lot of accounts that only offer debit cards like solo or visa electron do offer cheque books or direct debit facilities.
Other senarios exist wherby an overdraft could arise on such an account, although it is unlikely, it is still possible.
As Sammy Snake says, if you have 2p in your account and your mortgage direct debit bounces (I'm making a leap of faith here that you're mortgage isn't 2p or less) then no doubt your bank will levy a bank charge. If your balance hasn't changed by the time the charge debits (at least 14 days later) then you'll go overdrawn.
Less commonly, but more in line with card usage, if you have �14.99 in your account and swipe your card to buy a wig then this amount will vanish from your *available* balance for just 3 days. It's still physically in your account but it's not available for you to spend. If it takes the wig shop 6 days to actually remove the money from your account then on the 4th day you can happily go out and buy a CD with that same money. That way, your card purchases have put you overdrawn because you've spent the same money twice.
Finally, some fraudsters have latched onto the fact that with certain banks, if you swipe your card at any time during the day and then wander into the branch to make a withdrawal, the branch only see *yesterdays* swiping - NOT that day's.
I have �5000 balance, swipe card to buy "and Bully's special prize..." Bullseye stylee speedboat costing �5000 (which will go well with my council estate high rise flat) and then go to the branch to withdraw �5000 cash with huge grin on face.
Again, Electron/Solo account goes overdrawn.
Bank of Stevie knows fine well that people make mistakes and learn from them but Bank Of Ginger must learn that consequences of mistakes sometimes endure beyond having learned the lesson.
Credit is granted/declined based on a *consistent* recent pattern of behaviour & your overall financial situation.
Lesson II over.
Less commonly, but more in line with card usage, if you have �14.99 in your account and swipe your card to buy a wig then this amount will vanish from your *available* balance for just 3 days. It's still physically in your account but it's not available for you to spend. If it takes the wig shop 6 days to actually remove the money from your account then on the 4th day you can happily go out and buy a CD with that same money. That way, your card purchases have put you overdrawn because you've spent the same money twice.
Finally, some fraudsters have latched onto the fact that with certain banks, if you swipe your card at any time during the day and then wander into the branch to make a withdrawal, the branch only see *yesterdays* swiping - NOT that day's.
I have �5000 balance, swipe card to buy "and Bully's special prize..." Bullseye stylee speedboat costing �5000 (which will go well with my council estate high rise flat) and then go to the branch to withdraw �5000 cash with huge grin on face.
Again, Electron/Solo account goes overdrawn.
Bank of Stevie knows fine well that people make mistakes and learn from them but Bank Of Ginger must learn that consequences of mistakes sometimes endure beyond having learned the lesson.
Credit is granted/declined based on a *consistent* recent pattern of behaviour & your overall financial situation.
Lesson II over.
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