/ Money

Throw loyalty out the window

Bank card being cut with scissors

So… I have a confession to make. I’ve used the same bank since I opened my first account when I was nine – for no better reason than because my parents’ had an account with it at the time.

I’ve been thinking of switching for a while, but now NatWest has served up an extra reason to get cracking. From July, it is introducing a ‘usage fee’ each month for authorised overdrafts. The £6 charge means that those who go more than £10 into the red every month will pay £72 a year, on top of the 19.89% equivalent annual rate (EAR) interest.

At the same time, NatWest is reducing the maximum amount it will charge each month for use of unauthorised overdrafts from £186 to £90. While this is good news for those who use unauthorised overdrafts, the bank is essentially penalising people who use their overdraft responsibly.

I don’t use my overdraft every month, but I do dip into it occasionally, thus qualifying myself for this disproportionate penalty.

Switching banks for the first time

So I’ve decided that I’m going to switch current account for the first time – to First Direct, a Which? Recommended Provider. It will give me a £250 interest-free overdraft with no charge, plus £100 for switching.

Of course, switching isn’t as easy as it could be. It is about to get simpler though, with a new switching guarantee to be brought in by the Payments Council in September 2013. This will allow you to move your money to a new home in just seven working days. However, we’d still like to see the introduction of portable account numbers, which would let you take your account numbers from bank to bank.

The message we need to send the banks is that they can’t rely on us staying with them out of habit or misplaced loyalty. With money as tight as it is at the moment, people are getting quick to notice when a bum deal is dressed up like a positive change – and they’ll vote with their feet rather than sticking with the status quo.


There is little reward for loyalty offered by any business or institution – although Nationwide offers better interest for longer term members. The rule is to search for what you need and go for the best deal; complacency does not pay.

The banks have shown what a set of theives they are get there selfs in to debt then want us to bail them out

Good luck with your switch to First Direct. The only problem I experienced when I switched to them from Barclays was with the council tax direct debit. At the time (9 years ago) my council did not accept the automatic transfer of bank and I had to contact them direct to arrange the details.

I’m sure we would all love to know how you get on. I have never regretted my move and the telephone banking is so good I rarely use their internet banking.

I most certainly think it is worthwhile changing bank accounts or indeed any other financial service organisations or indeed utilities or indeed look carefully at any products we consume. Isn’t that what this organisation is about. I have been with Which for literally decades and it as been a worthwhile educational experience,to my benefit. I personally have had issues with some conclusions Which has arrived at but they have been few and far between, On this issue Which has consistently recommended First Direct as one of the very best banking services providers. I can certainly concur with that conclusion I have been with First Direct almost since they started over 20 yrs ago. I can assure anyone reading this I most certainly would have changed if I had not been satisfied with their customer service and their products.£250 free overdraft £1000 overdraft very low charges very competitive savings rates ( though these do vary- hence look elsewhere) £100 awarded to your account when you open up your account and should you not bee satisfied they pay you another £100 should you close your account and go elsewhere ( they must be pretty confident about you staying ) The customer service is quite simply the best if you telephone no button pushing you speak to someone straight away and the people at the other end of the line are very accomplished and knowledgeable only transferring you to another department if it is a highly special subject-and the transfer is pretty quick, to if they need to phone you back that is also rapid. Security is in “a league of its own” says Which. I concur. The website is brilliant beautifully logical and well designed.If I can negotiate my way round it easily anyone can. Only the late lamented ING DIRECT was its equal. I do not work for the publicity department or indeed any other department of First Direct I am just a highly satisfied customer for two decades. One point it is only a telephone/internet bank but that hardly matters these days. If you wish to have face to face service with a bank person then you should know that FD are a subsidiary of HSBC and any of there branches treat you as if you were one their customers also you could try one of the new plush instore M&S banks which are also connected to HSBC again they were extremely helpful to me. So yes certainly change your account if you are not happy. I am only recommending who I deem to be the best. Maybe you might get better service from Coutts-you know the royal bank gold embossed statements on parchment-that sort of thing,but then you might not oh and I think you might have to be worth a few million quid?

Michael says:
3 July 2013

I left Santander due to their awful tv ads with button, Ennis and Rory. Couldn’t be associated with a brand who produces that level of garbage

Lauren says:
3 July 2013

I was a loyal customer until my building society left my local town. I generally keep all products with one bank for ease now, e.g. current, joint, savings and isa. With interest rates so low, ease of banking is more of a priority.

Doug says:
3 July 2013

Switch to Metro Bank after HSBC kept on telling me they were cancelling my card due to fraud activity every time I phoned them to say I was due to fly out of the country, despite never having any fraud detected on my accounts. They just happened to always say, ‘we were just about to phone you’. No good when you are at the airport. Numerous complaints just fell on deaf ears. Large banks don’t need to care when they have such a massive customer base. Now Metro bank is a complete different kettle of fish. They are great. Local call centres, no overseas transaction fees on withdrawals. When I had a problem in China where I tried to take cash out at several machines, but the machines didn’t dispense any cash yet still debited me, a phone call to Metro bank got my money back in a few hours. No large bank can do that or is willing to do that. They are open late and on weekends. If I need anything, I can just walk in and they will sort it there and then. Even issue new cards on the spot. They may not offer good interest rates for current accounts, but that is not what I am after. Service and availability is worth so much more.

Dick C says:
5 July 2013

As a Lloyds TSB customer I am left in a difficult position. My branch, the one where I lived 12 years ago and never visit is to become a TSB or until it is hawked on the market to another bank.
My local branch is to become a Lloyds and in order to remain a Lloyds customer, the bank I originally chose after all, I have to apply as a new customer with all the hassle involved.
Lloyds have no apparent plan to ease my transition yet there must be thousands of customers in a similar plight. So much for loyalty!
The breakup is allegedly to increase competition and choice yet customers are not being offered a choice. What happens when another major bank buys TSB? Back to square one!

Heather M says:
5 August 2013

My husband & I had both banked with NatWest since we left school in 1983. I worked for them from 1983 – 1990. Up to 2010 that is 27 years of loyalty from both of us as individual customers and then joint account customers from 1993. We had an impeccable record of account management up to that point and were Private Banking Customers and had our mortgage with them. Oct 2008, one month after their owners RBS were bailed out by the government, we were offered a loan £38,000 by Private Banking based purely on income. I was concerned about the level of debt we already had outstanding and thought it better we look at adding the funds to our mortgage as we had just under £100,000 equity. The monthly payment would have been a lot more manageable. But the member of the Private Banking Team, who no doubt earned commission on the sale of the loan, pushed us to take the product as the funds would be in our account in 48 hours (adding to the mortgage would take a lot longer) and we could look at a reduction in the monthly payment should the BOE Base Rate reduce, which it did shortly after taking the loan out. All that happened was we were pushed back into more debt as we found the monthly repayments a struggle and by the end of 2010 needed the help of our Private Banking Relationship Manager to reorganise our finances. Supposedly being ‘Britains Most Helpful Bank’ and with 27 years of loyalty and in excess of £100,000 equity on our property you would think we would get the help. Instead Private Banking removed our overdraft facility, told me how nice it would be when my mother-in-law dies and my husband and I come into her inheritance, were exceptionally rude about temping work and refused to look at reducing the loan repayments even though we were ahead of our repayment schedule. Our accounts were moved to their Risk Management and in order for us to eat and pay bills we opened an account with Barclays to have our salaries paid in. My husband was in full time employment on a decent salary and I had started a temping role, hopefully leading to permanent work. However, Risk Management only operate the hours of 9-5 Mon-Fri & bowing to the pressure via messages left on my mobile, had to speak with them during this time. Apparantly e-mail and letters were not an option!!!. This disruption lead to loss of my job as I could not get a mobile signal and had to ask to use the office telephones. Now in 2013 and thanks to numerous PPI complaints being upheld, other than the loan, we are now debt free. Unfortuantly the loan is now in default (repayment plan has been set up) as the loss of my job has caused problems finding new work and the repayments were frozen while the FOS reviewed our complaint submitted in 2011 which I am very disappointed to say has not been upheld. As this whole dreadful scenario has had an impact on my health and relationships I am now closing this whole sorry episode and moving on, but my message to you all. Loyalty counts for absolutely nothing and switching banks is going to be so easy. Find a bank who will be there for you in good times and bad and not slam the door in your face when things go wrong. NatWest came incredibly close to destroying my life but I wasn’t going to let that happen and now I am in a much better place. They have lost all of our daily banking business and when the damage to our credit report is repaired will lose our mortgage as well. To them we were just a number not human beings who like many people these days had lost their way and needed help to get back on track. Shame on them.

Loyalty is an out of date concept. This goes for everything from phone provider or savings account to AA membership or gas supplier. Sensible people now spend lots of time researching and switching … Or threatening to in order to get a better deal from their existing provider. It saves you cash but what a pain in the neck! I hanker for the days when there was no choice and we were all in the same boat together.

Maybe we are looking back with too much nostalgia. In those days it was not easy to search for competitive deals from banks, energy providers (just British Gas and an electricity board), insurance (through a broker or you kept your old one year in, year out), AA or RAC at a fixed price. Now we can search the internet for the best deals and change relatively easily. Keeping existing customers is more difficult as they are savvy, so attracting new ones with introductory offers is the response. It is harder on those without access or who can’t or won’t make the effort. But I’m not sure their ever was any real reward for loyalty.

I don’t believe that loyalty is necessarily outdated. I deal with various small businesses that provide services at a good price.

It makes good business sense for insurance and breakdown recovery companies to reward loyal customers who have a record of making few claims and to discourage those that have a poor record from renewing. New customers are always going to be a gamble.

I have been with Barcays Bank of 40 Years, recently reduced my overdraft from £3,000 to £2,000 after a number of large bills, I went to the Bank and spoke to the relationship manager !!! I requested my overdraft be increased to £2,500 and was told no, because I had gone over my overdraft limit, and would be facing extra charges , I told the relationship manager I would move to a bank that doesn’t treat it’s customers with total distain, the reply was “you can’t change banks, you’re credit rating won’t allow it, I requested my bank charges be refunded, the reply was yes I can do that for you, but we will have to remove your overdraft facility” what service eh, I will now be banking with First Direct, good luck Barclays

I think the riposte about your credit rating was completely out of order. Banks have a tendency to be unhelpful just when their customers need their support the most. Credit card companies are the same: as soon as they notice a customer spending more and carrying forward large balances they raise the interest rate. Because they can.