Make the most of full benefits from your packaged account
A recent poll from moneysupermarket.com showed that just half (52 per cent) of those who pay for their current accounts make use of the package of benefits, and only half of this group use their benefits on a regular basis. This means a huge proportion of the British public are paying for benefits they don't even use.
Despite 40 per cent of those questioned admitting to paying for their current account, 13 per cent of packaged account holders said they weren't sure or weren't aware of the benefits they were entitled to. Even more surprising, thirty five per cent admitted to never using the additional benefits or only using the overdraft facility, meaning they could be paying extra for their current account and not fully utilising the benefits.
Kevin Mountford, head of banking at moneysupermarket.com said: "Fee paying accounts are now very much part of the UK's financial landscape. However, it's worrying to see many consumers don't know what they are paying for and aren't making full use of the benefits they are entitled to. The decision to pay for a current account shouldn't be made on a whim, particularly with a wide number of rates and fees on offer across providers.
"We've seen a number of providers who have started to notify customers of fee increases. Halifax for example will increase the monthly fee by £2.50, increasing to £15 on September 1st 2011. Its vital customers check the fees on their account, in order to compare how these packaged accounts stack up against fee free current accounts. Comparing the levels of cover against stand alone deals will give a good indication of whether they really do provide value for money."
The monthly fees customers pay varies across the high street and can be as high £20 per month. However, these fees do not tell the whole story, as the charges and benefits included by different providers vary enormously. Consumers need to work out whether they will use additional benefits and check whether they already pay for the same benefits elsewhere such as travel insurance and motor breakdown cover, or they could be throwing away money for cover they don't need.
Kevin Mountford continued: "Customers unaware of the benefits they're entitled to should check with their provider and ensure they are aware of the steps needed to activate benefits such as breakdown insurance and card loss, as often they will need to register their details before the cover kicks in. It is also worth checking the terms and conditions of any benefits, and establishing who else may be covered under any policies - such as a partner or children.
"When looking at a packaged account, in the first instance the main attributes such as overdraft fees, in-credit interest rates and how much money will be going into the account each month should be considered. After that, consumers need to look at the full range of benefits on offer and how much they cost before committing. While not perfect for everyone, packaged accounts are here to stay and offer a good solution for those who are ‘time poor' and prefer to bundle all their requirements in one product rather than shop around."