Once-apathetic British bank customers are now jilting their current account providers at record rates, according to data from payment processing provider Bacs. So far, more than 2.8 million people have taken up the option to change their bank accounts using a new, more rapid switching service implemented in 2013. This service cut the maximum waiting time from 30 working days to seven and helps customers avoid common switching problems, such as missed bill payments.
Roughly 310,000 customers swapped banks in the first quarter of 2016, representing a 20% increase from last year. Santander, Nationwide Building Society and Halifax were the most common choices for switchers using the new switching service, while Natwest/RBS bid farewell to 26,000 customers and Barclays to 25,000.
Of course, there are more than likely still plenty of people sitting in accounts that pay them less than they could be getting: “While the increase in figures is positive news, the number of switches is still comparatively small, given there are 65 million active current account holders in the UK,” said Kevin Mountford, head of banking at MoneySuperMarket.
So if you haven’t switched provider in a while, it may be time to revisit your current account. The number of accounts on offer has risen from 120 in 2011 to 143 today, helped by new competitors joining the industry.
And with interest rates remaining extremely low, banks are increasingly using current accounts to tempt in new customers – either by offering high interest rates on relatively small sums (5% on up to £2,000 from TSB, for example) or switching bonuses (First Direct and Halifax offer £100 to current account switchers right now).
Don’t overpay on your credit card
Credit card users are in many cases still paying high fees to use their cards, even though the European Union capped the transaction fees chargeable to retailers from December 2015, writes Amelia Murray in The Daily Telegraph. The “interchange fee” paid by retailers has been capped at 0.3% for credit and 0.2% for debit cards, down from 0.8% on average. The EU’s plan was for these savings to be passed on to consumers: retailers “must not charge consumers… fees that exceed the costs borne by the trader for the use of that means”.
Yet many customers are not seeing the benefit, reports Murray. For example, consider the 2% credit card charge often added to flight purchases, or the 5% added to cinema tickets. “There doesn’t seem to be anyone policing credit card charges… asking them why they apply a 3% surcharge when others process cards transactions for free,” said James Daley of consumer campaign group Fairer Finance.
For the retailers these small sums can add up to a lot. Before the change the British Retail Consortium said that savings to British firms could exceed £480m a year once price caps were implemented, so you can see why some might be reluctant to pass the savings on. For the time being at least, these charges are only investigated when a complaint is lodged (with the local trading standards office, in the first instance). Complaints are infrequent. But if a firm is overcharging you for your plastic, it shouldn’t be – so speak up.