Solo card and fees

[ben_wade]

Hi, i'm 15 which I think means I can get a solo card from either HSBC or Natwest.  Is this correct?

Also, I see that there are various percentage figures like interest, Gross APR, Net APR etc.  I guess interest is the same as my current nationwide savings account (They pay me to have my money there) but what do all the other figures mean?

Many Thanks
Ben

[willow74]

You can apply for a solo debit card on your account at your age.  With a solo card  you can use it as a debit card in lots of shops as long as the funds are in your account.  It will not allow you to go overdrawn so its a good starter card.

APR is Annual Percentage rate.  This really comes into effect when you have a credit card with the bank, or a loan.  This is the annual percentage of interest that the bank will charge for the facility.  For example if you had a credit card and owed �500 on it the bank will charge you approx 14% APR on that figure.  That is their interest charge and how they make their money.

This will not apply to you on a solo card as it is an intrest free type card, because it is not a credit card, but a debit card.  (i.e they are not loaning you anything)

If you have savings in a savings account they will pay you a percentage of interest either monthly or quarterly. The interest payment will increase with the more money you have in the account.

cheers ! 

[ben_wade]

Thanks Willow.

When you say i can apply for a debit card on my account do you mean on my nationwide 'smart 2 save' account or with HSBC or Natwest?

So from what you say i think i'm right in assuming i will not have to pay anything to the bank for having and using this card.  But, will they give my interest for having money there and if so are HSBC and Natwest's interest rates good?

Thanks again
Ben

[stevie21]

If your nationwide account is a savings account then no, you can't have a solo card there. It'd have to be on a current account.
On this type of account you won't have to pay anything to use the solo card and they will pay you interest for having your money there. The amount of interest will be so small that I wouldn't even shop around much : there won't be much difference in the amount of pence that you receive in interest from different banks.
Instead I'd choose a bank that is convenient for you to use. One that has branches near you, or offers an incentive to open an account etc.

Finally, it's not impossible to go overdrawn on a solo account, just a little more difficult.

[ben_wade]

Thanks Stevie!

 

I would make sure i don't go overdrawn anyway.

The interest rate works in the same way as a savings account doesn't it?  I mean if i had �1000 and interest was 3% then i would get �30 per year on it?

[stevie21]

That's right, yes. One final thing to note (if you're really THAT interested in the, er, interest rates. Excuse the pun!) is that the interest rates quoted are always before tax.
If you want to know how much it is after tax, calculate 4/5ths of whatever you read. (3% gross would then be 2.4% net).

It might even be that you are exempt from tax if you're just a bairn in which case ask at the bank and fill in an R85 form.

All the best Ben, I was nowhere near this organised when I was 15!

[ben_wade]

Thanks guys, got an information pack on the way from hsbc!