If you've had trouble opening a current account at a major bank, it’s understandable that you may be worried and unsure who you can turn to.
A guaranteed acceptance account could be the solution you’re searching for, because your credit history plays no part in deciding whether you’re accepted or not.
In fact, the best guaranteed bank account companies promise to make them available to anyone (as long as you have ID, are at least 18 and a UK resident).
How do guaranteed accounts work?
Unlike most normal debit or credit cards, with which you can spend a lot of money (even if you don’t have it…), most guaranteed accounts only give you access to a prepaid card.
This means that you have to put money onto it in order to spend it, so in essence you are only able to spend money that you have available in the first place.
You can put money on the card using wages or benefits and add it by setting up a standing order, visiting any Post Office branch or informing your employer that you want your wages paid straight to the account.
You should make a guaranteed current account comparison to see which company offers to best account for you.
Can you get a debit card with a guaranteed account?
It is possible with a few accounts to get a cash card or debit card that you can use for many everyday tasks, like withdrawing money from an ATM, setting up debit or standing order payments and making cash transfer to other accounts.
While these cash cards provide an alternative if you still want to have an account with a bank and have found it tricky to get an ordinary account, you must check what charges apply and be aware that you won’t be able to get an overdraft.
Take charges into account
When you compare guaranteed bank accounts you’ll soon see that most of them charge a monthly fee for using the service. This is because these accounts are seen as being more risky for companies to provide and are generally offered to less profitable customers.
It’s more costly for the company to offer pre-paid accounts with low turnovers, especially as there’s no way they can make money through interest rates – that’s why they put charges in place for supplying the account.
When you take out a prepaid card you need to make sure you set some aside each month to pay this charge and that you can afford to pay it off.
Some account providers will also charge you to withdraw money using an ATM, so if you don’t want to pay a fee each time it’s probably a good idea to rule out any companies that apply one.
Why you should get a guaranteed account
If you’re in a tight spot and have been rejected for an account with a bank, for whatever reason, when you apply for a guaranteed account you know it’s highly likely you’ll be accepted.
Furthermore, opening one of these accounts can help build up and restore your credit rating, meaning there’s more chance you’ll be accepted for a standard current account in future.
With these accounts you should also be able to budget more effectively, as you’ll know how much is loaded onto the card and therefore how much is available for you to spend.
Some companies take this further and set up two accounts for you; one to deal with bill payments, the other for you to use as spending money. This means you won’t get caught short as your money is allocated accordingly.
There’s little chance of getting into debt, as companies tend not to offer guaranteed bank accounts with overdrafts, so you can’t go overdrawn by spending too much cash.
Relationships with high-street banks
Companies that offer guaranteed accounts often have agreements with leading UK banks, which means customers can use a bank’s branch to deposit cash or cheques and also withdraw money.
If would prefer to have this kind of day-to-day banking service, you should check if the guaranteed account provider you want to go with offers this option or works with any high-street banks.
If you use the card efficiently, budget well and build up your credit rating over time, you stand a better chance of success when you approach banks in the future.
How to find the best guaranteed business account
Guaranteed accounts can be used for business purposes, as well as just personal spending.
You can get a quick decision on whether your company is eligible by applying online, and don’t have to go through the rigmarole associated with banks and credit checks.
Companies that offer these claim that you can do everything you would with a normal business bank account – like process transfers, pay in cash and manage expenses – but at a cheaper rate.
If this appeals to you and seems like a good option for your company, you should compare guaranteed business bank accounts to see what’s available.
For more information about current accounts, and how you can get the best one for you, check our guide Top 9 tips for choosing a current account.