Packaged current accounts: Money for nothing

Wednesday, 21 October 2009 06:20

Premium current accounts that charge people for insurance services or access to cheaper loans result in benefits being largely unused by customers.

A poll of Which? members finds only 12 per cent of packaged current account customers use all the benefits.

One in ten never use the benefits.

Added extras include mobile cover, ID theft packages and commission-free foreign currency along with home and car insurance deals.

Which? warns credit interest rates on premium accounts often fail to beat standard accounts and customer satisfaction is no better.

James Daley, Editor, Which? Money, said: "The majority of our members with packaged accounts are paying for benefits they simply aren't using.

"Anyone considering one of these accounts needs to look carefully at the alternatives before agreeing to pay a monthly fee for extras they may not need."

Which? also found a fifth of those with paid for accounts were upgraded without being consulted.

Mr Daley said this was "unfair and should be stopped".

There is the fear paid-for accounts are slowly becoming the norm - as they are in other European countries.

Banks are currently fighting over unauthorised overdraft fees with the Office of Fair Trading and a loss of income from the penalty charges could lead to all but few basic accounts being charged.

Barclays offers a package costing £5 a month but it claims there are up to £213 of annual benefits.

It also has one account costing £25 a month.

HSBC offers an account with worldwide travel insurance, roadside breakdown assistance and life cover for £12.95 a month.

Lloyds TSB's range of silver, gold, platinum and premier accounts cost between £7.95 and £25 a month.

NatWest offers premium Advantage accounts costing from £6.95 to £19.95, Halifax offers a reward account at £5 a month, and Royal Bank of Scotland has its Royalties accounts at £6.95 and £12.95 a month.

Abbey has Reward accounts at £10 and £15 a month.

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