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The hidden charges of student bank accounts

Last updated: 28th May, 2012

There has been a lot of controversy recently about whether a “free” bank account even exists. We all know that as things stand, you can open a bank account for free in the UK. However, the banks not only look to get money from your money but also money from you!

Many are aware that the interested rate with their current account does not match what the bank are getting for investing your money. What’s more, with the majority of the top student accounts in 2012 you don’t get and interest on positive balances at all! This means that the bank are making money out of your money and not giving anything back.

You may argue that they loan each student money out for 0% interest and although this may be slightly true, the banks, more often than not, expect you to fail in reaching repayments and therefore owe them money.

The marketing of the student accounts seems to gloss over a number of the key charges you should know about and this actually makes them more hidden. There is no need to be worried about the hidden charges of student bank accounts but you should definitely be aware of them in order to avoid them.

Overdraft Charges

A lot of students aren’t aware of the charges on their overdraft as the banks don’t make them entirely clear (for one bank you have to almost be a detective to track down the charges).

If you ever feel that you are going to go into your overdraft then you will need to notify your bank. If you do then they can help you with the best way to sort out your finance worries as well as possibly lower the cost to you. For example, if you arrange to extend your overdraft then there could be no charge where as if you go into your overdraft without arranging it you may be charged a huge amount (up to £6 a day).

Keeping quiet about it is not a good idea. The bank won’t simply forget and forgive!

Using your card abroad

Most students end up going abroad at least once during their 3-5 years at university. It is important that you know what the bank could charge you for spending/withdrawing with your card abroad and how you can avoid getting stung by this student bank account hidden charge.

You could be charged up to £5 for each transaction or withdrawal you make abroad. Now that’s pretty costly, especially when you would rather be sipping a nice cold cocktail by the beach.

The easy way to avoid this student account hidden charge is to simply withdraw the money in the UK and then exchange it for free there.

Warning: It’s worth noting that if you should go abroad, you should notify your bank as they may cancel your card if you don’t.

Phoning the bank can be costly

It seems ridiculous but some of the banks actually charge you to call them up. If you are already in your overdraft or worried about extra charges then this is a bit of an insult (especially if you are put on hold).

Luckily, there is a solution to the problem that is really quick and easy. You can use the site called SayNoTo0870.

This site allows you to call a free number (usually a different department) and they then refer you onto the student bank account team and you will be charge free!

This website is a students secret weapon and it can really help you take those hidden charges off of your phone bill.

 

By students

Hello! This website has been written by student money experts Save the Student! to give you an overview of student bank accounts and what they have to offer you.

The studentsWe review the benefits and catches of all student accounts so you can make an informed choice and avoid the traps!

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