How to manage money with a basic bank account

If you pay your salary into your current account or you’ve shown yourself to be good at managing your money, your bank will probably put you on some kind of premium account, which might have perks like cheap travel insurance or a small monthly cashback bonus.

But if you’ve had financial problems in the past – maybe you defaulted on an overdraft – or in some cases if you are young or a first-time current accountholder, you might be given a basic bank account instead.

These provide the bare essentials of banking abilities, and often don’t come with certain desirable features. For example, you might be given a basic cash card that can only be used to make withdrawals at that bank’s own ATMs, and is not suitable for third-party cash machines or to pay directly for things in shops and online.

However, the exact limitations and account features vary a lot between the different banks, so it’s important to check the terms and conditions of any basic bank account to know what you’re getting.

Managing money with a limited bank account

If you find yourself using a basic bank account – especially if you are moved on to a basic account by your bank after previously having a full current account or premium account – it can feel quite limiting.

This can be even more of a problem if you moved on to the basic account because, for example, you lost your job or another source of income and no longer qualified for a premium account with a minimum monthly deposit.

As is so often the case, basic bank accounts are often aimed at people with the least spending power – young people and those in financial difficulties – yet instead of giving you more ways to manage your money and get to a stronger financial position, they give you fewer options.

One of the positive aspects of this is that basic bank accounts will often not come with an overdraft or credit card, which means it can be less tempting to overspend and go into debt on the account.

If your credit score has suffered due to the way you have managed your personal debt in the past (or the way you have mismanaged it), a basic account can help to get things back on track by encouraging you to stay in the black for longer, so old mistakes eventually fade away on your credit file.

Get an online account with no credit

An instant online account with no credit, such as an Arro Personal Account, is an alternative to a basic bank account and may give you features your basic bank account does not.

For instance, with every account you get a MasterCard® debit card issued in your name, with access to all of the card’s capabilities:

  • Pay in shops by contactless or chip and pin.
  • Pay online using the card details, expiry date and CVV.
  • Withdraw cash from your account balance at ATMs.

Because it’s a MasterCard®, it’s widely accepted at cash machines, in shops and on websites worldwide – and we’ll send you your card details via SMS immediately so you can use it online and start managing your money sooner.

You also get access to send money via Faster Payments and Direct Debit, so you can manage bills better than in the past, and make sure you don’t miss any deadlines that could hold down your credit score.

All of this is done via the Arro Money online account dashboard, purpose-built by us for the job, and you can log on from any internet-enabled computer or smartphone to check your balance and recent payments at any time.

Finally, because your Arro Personal Account has a normal sort code and account number – just like any high street bank account – you can transfer money into it in all the normal ways, including your wages, salary or benefits payments and any other sources of income.

Get an account with a bad credit rating

Many people get a basic bank account because their bad credit rating stops them from qualifying for anything else.

At Arro Money we want to help you get your credit file back on track – and we start by offering guaranteed approval for all eligible applications, if you’re over 18, live in the UK and meet our simple Fair Fit criteria.

Crucially, there’s no overdraft or credit card, and that not only means less temptation to overspend, it also means we don’t need to run a credit check before we approve your account.