Monday, 19 July 2010 12:00 AM
News that unauthorised current account overdrafts can result in exorbitant charges (up to 167% APR, on average) might have been a shock to many people - but not to those with a Credit Union Current Account.
The account - which is currently available from 25 credit unions around the UK, with more coming on stream all the time - offers a fair and affordable alternative and a greater degree of choice than currently provided by the high street banks. As there's no overdraft facility, account holders are able to manage their money better - without the stress and uncertainty that many bank accounts bring.
"Credit unions aim to help their current account customers by not letting them go overdrawn. To achieve this, they deliberately do not offer overdrafts, which can cause so much misery if people unexpectedly run up huge charges," says James Moran, Banking Services Manager at ABCUL - the Association of British Credit Unions.
"If there are not enough funds in your account to pay direct debits or standing orders, there is generally a small charge or fee when these are returned.
"Credit unions work with their members to help them manage their money rather than slapping huge charges on them when they go into the red."
James adds that the Credit Union Current Account provides a fair and affordable alternative to the traditional bank account.
"When people say there's not enough choice and the banks are treating them unfairly, more often than not there's a credit union solution waiting for them locally. The Credit Union Current Account provides the perfect answer for anyone wishing to avoid overdraft charges."
Credit unions are financial co-operatives owned and controlled by their members. To find a credit union near you visit www.abcul.coop.
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Notes to Editor:
ABCUL is the main trade association for credit unions in England, Scotland and Wales. At the end of June 2009, ABCUL's 325 credit unions were managing nearly £450 million of members' savings on behalf of over 550,000 people, and had over £375 million out on loan.
ABCUL is the country's largest development, information and training network for new credit unions. It is a democratic, not-for-profit organisation and is improving day-to-day operations, legislation and regulation for all credit unions.
Credit unions are licensed deposit takers, authorised and regulated by the Financial Services Authority. They are covered by the Financial Services Compensation Scheme, so the first £50,000 of a member's savings are completely safe.