Basic Bank Account Alternatives (2024)

Nowadays it seems like you can’t do anything without the internet. More than ever, our digitalised, interconnected world often excludes individuals who don’t have a basic bank account. In 2019, theFCA published a studywhich found there are 1.3 million underbanked adults in the UK.

In many instances, those without a banking account can find it difficult to get a job as employers and agencies typically prefer to pay your wages into a bank account – or are penalised for wanting to pay employees in cash.

So, if you’re looking for a suitable account but have been turned down for a bank account with the traditional high street banks, what are your alternatives? Let’s look at some of the reasons why you may need a bank account, what problems you may have encountered, and what your alternatives are.

Why Do I Need a Basic Bank Account?

Current Accounts

Most of us need a basic bank account to access a few simple financial services. The main service we need is acurrent account, somewhere wages can be paid into and bills can be paid from.

Many employers, agencies or companies will only pay wages into a bank account or current account. This will help keep your money secure and also offer additional services like the ability to save money and set up regular payments.

Money Management

Having your money in one place means you can keep better track of your income and your outgoings. You’ll see where you are spending your money, which puts you in control and allows you to budget your money between payments.

One advantage is that secure, basic accounts offeronline bankingwhere you can manage your money 24/7 from anywhere in the world.

Debit Cards

It is becoming more difficult to live without adebit cardwhich is essential for all online shopping and accessing certain subscription services such as Spotify.

Nowadays,digital payment walletsmean that your debit card details are stored on your phone making it even easier to shop (especially during COVID) and removes the worry of accidentally leaving your bank card at home.

Reasons You Might be Denied Access to a Bank Account

Credit History

Yourcredit historyis often checked when you apply for a new account and if you’ve faced previous problems or if you have no credit history you may be declined.

Finding a banking provider which offers an account where there isno credit checkneeded, can be the solution.

Low Wages

If you are on a low salary you may find it difficult to open a current account as many ask for a minimum monthly wage or salary to be paid in.

Some banking providers ask for a minimum deposit per month in order to access an account, which does seclude some individuals on a lower income.

Overdrafts

If you have an existing current account with a large overdraft limit, this can affect your ability to transfer the account to another provider, especially if you live within your overdraft from month to month.

No Proof of Address

Often a form of identification that banking providers require isproof of addressin the form of a utility bill or tax bill. This can be tricky for some, especially if you live at home with parents, in a house share where the bills don’t come out of your account or have recently moved over to the UK.

Defaulted Payments

This type of payment basically means that you’ve missed a payment and not repaid it. Missed repayments on loans, credit cards or finance agreements can adversely affect your credit score and ability access certain banking products.

Alternatives to a Basic Bank Account

Credit Unions

Credit Unions are like a building society in that they are run for the benefit of their members. Usually, they will operate in a small geographic area, a specific town or city, and may also offer services only to people in particular industries.

Some credit unions will provide a cash card as opposed to a debit card. A cash card will only allow you towithdraw cashat an ATM, not pay for goods and services in shops or online.

Prepaid Debit Cards

Aprepaid cardworks in much the same way as a basic bank account. One advantage is that you can open a prepaid card without any credit checks or needing to provide proof of address.

With some prepaid cards, they give you the ability to set updirect debitsandstanding ordersand manage your finances on the go. The difference with a prepaid card is that money needs to be loaded onto the card before use as there is no overdraft facility, but this can be done through a bank transfer or through your wages.

Prepaid cards give you the freedom to spend your money online, in-store or over the telephone. You can incur some charges but are a perfect solution for those needing access to a suitable banking account.

Suits Me® Prepaid Debit Card

At Suits Me®, we like to think we offer something a bit different. Our main priority isfinancial inclusion– meaning we believe in providing a solution for everyone, regardless of their financial position, personal circ*mstances or credit score.

Once you’ve opened your Suits Me® account (which only takes ten minutes!) you will have access to great banking-like facilities including:

• A contactless Mastercard®debit card, accepted at millions of locations worldwide,
• The ability to manage your money on the go using your secureonline account andmobile app,
• Make payments,transfers, or check your balance and spending.
• You’ll even gain access to our exclusivecashback reward programmewhere you’ll automatically receive discounts into your account when you shop with some top UK retailers.

Related Posts

• Three Reasons a Suits Me® Card Could be Right for You
• How We’re Expanding Financial Access to the Underbanked Through Online Banking
• Underbanked in the UK: How to Get on the Banking Ladder