Why I changed my current account after 22 years!

I was perfectly happy with my Yorkshire Bank current account for many years. I didn’t expect to ever have to leave them, until recently. I saw no need to switch, even when they made it easier to switch – I happily ignored the “£100 credit when you switch to us” adverts for many years, in the almost certain knowledge that the grass was not necessarily any greener on any other side.

Although I have had an extremely variable income for much of my life, I’ve always been relatively prudent and avoided running up large amounts of debt that I would have had difficulty paying back. An overdraft was always essential, but only within a pre-arranged limit and only for short periods of time when I needed the extra liquidity. In short, I ran my account in a responsible way.

In turn, they were pretty good to me. On odd occasions when I had minor issues they were helpful. When I was charged fees at least once, due to my own oversight, they agreed to refund the penalty on the basis that I was a long term, valued customer in generally good standing. I’m particularly keen to emphasise how friendly and professional the staff in the Peterborough branch were whenever I visited.

Unfortunately out of the blue, a significant and sudden change occurred in the way that they charged fees. Unfortunately it followed the long period of historically low interest rates that had meant many current accounts – my own included – no longer paid any interest on credit balances. Because of this I had been transferring out credit balances into my cash ISA as soon as possible – and as much as possible – leading to the occasional small, very short term overdraft. Usually less than £200 for a few days to a week.

The fee changes were a thinly disguised way for Yorkshire – part of Clydesdale Bank and by now owned by National Australia Bank – to move away from the Free Banking model, while still appearing fee-free. Instead of simply charging interest on an authorised overdraft, they completely renamed it to “Planned Borrowing” and introduced a “Useage Fee”. This meant that every time I went into my planned borrowing by more that the “Buffer Amount” of £25, I would be charged a £6 fee for the month. As well as the interest.

As soon as I read the leaflet, I realised that the introduction of this new fee structure was going to be a problem for me when it came into effect in December 2014. But being busy I soon forgot about it – in fact the first time I remembered was when an unwelcome £6 fee appeared on my online banking screen. I dug out the fee leaflet, sighed deeply and got on the phone to “Customer Services”.

CS: We can’t refund it! (Stridently)

ME: I wasn’t asking you to refund it. I called to tell you that if this was the way that things were going to be now, it simply doesn’t work for me and my requirements for a current account.

CS: So what do you want me to do?

ME: Nothing. I will be closing my account.

CS: I can log it as a complaint?

ME: Yes, if you want. I’ll still be closing my account and moving to a bank that offers a fee-free overdraft facility!

I didn’t really need to find another current account as I already had another one already set up with SMILE – the internet banking arm of the Co-Operative Bank – but being the sort of person who likes to keep their options open, and in order to enjoy a switching incentive, I thought it would be an ideal time to open a completely new account.

I’d heard good things about First Direct – an internet based arm of HSBC. They had won various awards for customer service and seemed to be very fair and well regarded. They also offered as standard a £500 overdraft facility – free of fees – and the first £250 FREE OF INTEREST! Exactly what I needed. Add in a £100 incentive and I needed no further persuasion.

Reviews and tips relating to First Direct to follow in another article…