In a situation like this, mortgage customers would usually be best advised to remortgage. Unfortunately, these days, lending criteria have become considerably more strict, effectively locking borrowers into existing contracts. One possible solution to the dilemma consists in raising one’s own equity in a house by means of tapping into one’s savings and paying off a considerable amount – thereby increasing one’s chances of remortgaging. Another suggestion was to improve relations with one’s current bank. As Mark Harris, chief executive of mortgage broker SPF Private Clients, pointed out: “If you have little or no equity, remortgaging to another lender will be tricky. So ask your existing lender if it will offer you one of its fixed or tracker rates. If you are on one of the cheapest SVRs of 2.5% from Lloyds and Nationwide, you will struggle to find anything cheaper. But if your SVR is, say, 4% plus, there should be something cheaper out there, assuming you have at least 20% equity in your home.”

Needless to say, meanwhile, the process of trying to set up a new mortage plan and making ends meet was a psychologically painful and demanding one. It was precisely here that an eccount could come in handy, according to Thomas: “We strongly encourage anyone on an SVR to find hands-on solutions to their mortgage issues, regardless of whether they can achieve this through remortgaging or by negotiating better conditions with their bank. In either case, the key to successfully paying off one’s mortgage lies in smart budgeting and building a sustainable financial foundation. By using an eccount, mortgage customers can avoid unnecessary overdrafts and prevent themselves from having to tap into expensive short-term loans. This way, shocks like these are far more easy to cope with.”

#1 An eccount may be the only account you’ll be able to get
Sadly, most banks treat bankrupts almost like criminals these days, subjecting them to painful credit checks or outright barring them from their services by default. Effectively, once you’ve entered individual insolvency, getting a standard current account is all but out of the question, excluding you from many fundamental banking facilities. Thanks to the eccount, this worst-case scenario no longer applies. For a negligible monthly fee, you will be able to transfer money and withdraw cash from ATMs all around the country, you can have money paid into your account again and make a fresh start. For thousands of customers, the eccount has turned into an indispensable part of their life. It may be the only account you’ll be able to get – but it may also be the best.

#2 An eccount can help you save money
Not all bankrupts are by default profligate or careless spenders. Budgeting is a difficult task which requires organisational skills and the ability to efficiently cope with setbacks and shocks, after all – and not everyone is equipped with these talents. Typically, bankrupts have simply lost control of the balance between incomings and outgoings because of short-term problems and have had to borrow their way out until there was no way of repairing the damage anymore. An eccount, meanwhile, can make a decisive difference in supporting you in this regard. For one, you can only spend what you actually have – overdrafts are not allowed, preventing further debts from piling up. Secondly, each eccount comes with an inbuilt debt warning system, alerting you should your finances fall below a certain level. And finally, the transparent fee structure of an eccount can end up being cheaper than a seemingly free current account.

#3 An eccount can help you with repairing your credit rating
Much to the chagrin and disappointment of many bankrupts, a single mistake in the past can forever make them untrustworthy in the eyes of banks and keep them from returning to their former life again despite their best intentions. Repairing a credit rating can certainly seem like a hopeless task. And yet, an eccount can make it seem attainable again. By eliminating overdraft- and credit-facilities, it is a clear signal to banks  that you’ve learned your lesson and that you are willing to make significant changes in your spending behaviour in the future. It also prevents you from having to take up further debt.

An eccount won’t change the fact that the road ahead of you is a hard one. But at least by setting up an eccount, you are providing yourself with the chance of building a future for yourself. Compared to the draconian service provided by standard banks, that is a great perspective for sure.

1. Debt alert
There are a few things you just can’t buy and time is one of them. When it comes to your finances, meanwhile, time can truly be money. Especially when there’s not enough money on your account to cover your expenses for the rest of the month, you may be forced into taking up expensive short-term loans and running up debt.

An eccount can help you budgeting thanks to its inbuilt debt alert function: As soon as your balance drops below a certain level, you are sent an SMS to your mobile phone – allowing you to take action to keep you from having to take up expensive credit.

2. Debt prevention
One of the biggest challenges for those in financial trouble is to avoid racking up even more debt. This is because interest payments may drain your resources and force you into taking up a new loan. These new credits in turn generate new interest rate payments and create a system of increasing interests which can quickly spiral out of control. This is why it is of utmost importance to prevent new debt from building up. An eccount is perfect in this regard, as it doesn’t allow you to go into overdrafts. This way, your budget will remain balanced, leaving you in full control of your finances.

3. Interest management
Few people realise why overdrafts and credit card debt are so problematic. It isn’t so much the fact that you’re taking up debt to cover your expenses in principle – after all, expensive products like a house or a new car will come at a price only a minority of people will be able to cover out of their own pockets. What really matters is that these facilities tempt you into paying interest even on items you could afford yourself. Especially credit card use has risen dramatically, leading many consumers to pay interests on clothing or dinner bills, which they could easily have paid for in cash.

The lesson you should learn is to separate your income from your debts and to only pay interest if you really have to. With an eccount, you can naturally still take up a credit. But you can make absolutely sure to only apply for one if you really need it.

4. Spending behaviour
An eccount reminds you that spending and earning are directly related. After all, you can only spend what’s on your account. For most of our customers, this leads to an important shift in their behaviour and attitude towards consumption. You, too, will notice this. It won’t make you stop enjoying yourself or going on a shopping diet. But it will make you consider each purchase more deeply than before – and thus lead you to enjoy the things you’ve bought much more than before.

As mentioned, an eccount can not replace a sensible debt management strategy – but in terms of supporting you in your goals and decisions, it can make all the difference between beating debt and being beaten by it.

#1 No credit checks, all standard banking facilities

Our original intention for the eccount was to help anyone unable to open up a current account with a standard bank. By eliminating credit checks, we have granted thousands capable of paying a small monthly fee access to the full range of essential banking facilities again. Our motivation to do so was extremely simple: From our point of view, credit checks are nothing but an unnecessarily painful procedure, which, truth be told, doesn’t really reveal anything meaningful about someone’s finances.

Universal access doesn’t mean that an eccount is in any way inferior to a current account. You can use it to set up standing orders, withdraw money at ATMs at no additional charge, transfer money, have your wages paid into it and a lot more. In practise, you will find an eccount just as effective and useful as a traditional account – and no one will be able to tell the difference from the outside.

#2 A fully-fledged prepaid card

The banking facilities just mentioned aren’t the only benefits. Each eccount comes with a fully-fledged prepaid card, which works just like a regular debit- or credit-card. This means you will be able to purchase goods cashless at millions of locations worldwide and to make use of the advantages of online shopping by hunting for bargains on the web. Just load money onto your prepaid card and you’re ready to go. Since it is connected to your name and contains a chip, prepaid cards are exceedingly hard to counterfeit and thus particularly safe. And again, a prepaid card looks just like a regular credit card. Thanks to all of these benefits, we believe it to be ideal payment tool in the 21st century.

#3 No overdrafts, no debts

There’s just one exception to the points we’ve just made: An eccount will not allow you to go into overdrafts. Instead, you can only spend what’s on the eccount and will have to top up your balance should you require more. To some, this may constitute a disadvantage. To anyone, who’s ever been in debt, meanwhile, it contrarily makes for an advantage. After all, overdrafts may be convenient, but they are extremely dangerous, too. By eliminating them from the equation, you will be able to focus much clearer on what you really need and to sensibly balance your incomings with your outgoings. It doesn’t prevent you from getting a credit if you really need one, either. Quite on the contrary: By improving your financial health in the long-run, you stand a better chance when applying for a loan with a bank next time around.

#4 Online banking

Traditional banks have long explained their comparatively high operating costs with their wide web of branch offices. This has long changed, with many branches closing down. At eccount money, we believe online banking to be the future and therefore fully embrace it. Rather than using it to save money, we are regarding it as your best option: It allows you to take care of your banking affairs twenty four seven and without having to wait in line before being served. It also means you can closely monitor your spending patterns and to draw adequate conclusions from them. You can even deal with transactions on the move, thanks to our mobile banking options. With an eccount, you’re ready for the future.

#5 A clear fee structure

Many traditional banks have long pretended as though banking were free. In reality, it isn’t and although your current account may come at no charge, you will pay the price anyway by means of overdraft fees or a plethora of costs which come mentioned in the fine print. At eccount money, we don’t think everything in banking should be free – otherwise, how should we be able to provide you with services and products at the highest possible quality? We do believe, however, that you should be able to know precisely how much you will have to pay for a particular transaction, so you can take informed decisions.

Clearly, then, eccounts may have added another option to the banking sector – but instead of making it even more complex, they have made it considerably easier. After all, eccounts are the ideal banking solution under all circumstances.

Less risk for you
Banks have always found it hard to determine the right amount of risk on an organisational level and for you as a customer. As a result, they have tended to dole out credit freely at times of low interest rates and to completely shut down the supply after the inevitable crunch. As a result, it is you as a customer who has to bear the full weight of risk and as a result, many find themselves having to pay back higher monthly installments than they can afford and to eventually default on their debts at some point. What customers need instead are solutions which can stabilise their income- and spending stream and which prepare  them for the fluctuations of the capital markets. What they need, in short, are tools helping them to ground  their finances.

More partnership
Traditional banks have, in a way, always made money by selling you credit and therefore from getting you into debt. After all, most bank accounts no longer incur any monthly fees, so the only way a bank can make any money off you is by slapping high interests on your credit and by making it extremely easy for you to go into the red with your debit card. And so, most current accounts allow for dangerously high overdrafts, sometimes as high as thousands of Pounds. It is only afterwards, when things have gone wrong, that many customers are finding out that they have actually racked up debts this way and paid interest on them as well. This, by all accounts, is not a particularly strong model when it comes to building a fruitful long-term relationship between the parties involved and it has an inbuilt tendency for conflict and disaster.

Better service
Essentially, it has become increasingly apparent over the past decade, that banks have never really cared about smaller and low to middle income customers. Their real area of interest lies in high earnings and big investments, with their small income business mostly considered little more than goodwill. This disinterest in the well-being of the largest part of the population is telling in the way banks treat their customers: Credit checks are often painful ordeals involving unpleasant questioning by managers; many branch offices are closing, depriving the elderly and financially squeezed of personal assistance; and online banking has mostly remained an unpleasant and unnecessarily complex ordeal.

eccounts and their far-reaching palette of services are the logical result of these developments:

• By charging a monthly fee rather than operating on the basis of credit and interest, they are putting customer service and your financial well-being first.
• By focusing on sensible budgeting and controlling debt rather than providing overdraft- and credit facilities, they are catering to the real needs of households.
• By recognising online banking as a veritable new strategy rather than just a way of slashing costs, they have made banking a lot more convenient and agreeable.

To us, this isn’t so much a case of revolutionary developments, but more of drawing the right conclusions from very tangible problems. In a way, the rise of the eccount tells you that banking, after decades of marking time and ignoring the call for transformation, is changing. And this time, it’s for the better.

As bleak as the report’s outlook may seem, it also had some positive aspects to offer. According to Green, all participants were highly aware of the need for sensible and effective budgeting, planning their decisions on a weekly basis and constantly looking for ways to improve their finances. Their monetary issues were not so much the result of uninhibited spending, but of taking up loans at a time when credit was cheap. As wages flatlined, costs of living surged and benefits were cut, they were suddenly facing drastic slumps in their real disposable income. This, in turn, lead to problems in the realms of housing, childcare, work and skills, budgeting, cost of living as well as debt. Despite these issues, the report also had some sensible solutions on offer:

• Since owning one’s own home was increasingly out of reach for most households, making tenure for rented apartments more secure was a priority. Deposit schemes allowing for a quicker payback of the deposit could furthermore prevent tenants from having to take up debt prior to moving into a new apartment.
• Families who took part in the report all found it hard to strike a sensible compromise between committing to a job and raising their children. Childcare was generally held to be either too expensive, too inflexible or both, usually making it impossible for at least one parent within a relationship to work even on a part-time basis. Improving childcare and making it more affordable, would allow households to generate a double income again. More flexible solutions with regards to vacations and working hours could also greatly contribute to this.
• Tackling debts had become a key point for many households in the UK. While free debt advice was available, there were still barriers preventing many from actually making use of it. Eliminating these barriers remained a priority for politics in the near future.

Especially with regards to the latter, preventing debt in the first place seems to be the key to success. An eccount could help millions of households in the UK in dealing with their debts, keep them from having to borrow money and put them back in control of their finances again. As Thomas pointed out, “one of the first steps suggested by a debt advice professional is to get your budget in order again and balancing incomings and outgoings as quickly as possible. With an eccount, you can achieve this aim instantly, since it doesn’t allow for overdrafts and raises your general awareness of how much you’re spending. It doesn’t resolve all of your financial problems straight away – but it definitely makes dealing with them a whole lot easier.”

Exercising your rights
Before we take a look at recent developments, it is important to point out that these seemingly bleak perspectives notwithstanding, you do have some rights as an applicant and you can and should make use of them. The Financial Services Authority has published an informative and easy-to-understand leaflet explaining precisely what a bank is allowed to do as part of its application procedure and what exceeds its boundaries.

• A bank must inform you on the terms and conditions relating to the account, for example. It can reject some (but not all) types of ID to identify you, but it should be able to explain why it rejects them.
• A bank must also inform you, upon request, whether it is going to perform a credit check on you. The latter is a particularly important aspect, as repeat checks with different banks can reduce your credit rating and thus squeeze your chances of getting a bank account in the future.

If any of these points should lead to financial exclusion, you can contact the FSA’s ombudsman for help and assistance.

Universal access: A short history
The idea of universal access to fundamental banking facilities may sound like a relatively new concept and it has indeed considerably gained in popularity in the wake of the recent economic crisis and the resulting climate of distrust and risk-aversion. And yet, it has been on the political agenda for decades. Take a look at the following statement, quoted from a Wikipedia entry, for example, which was made in relation to the founding of a new financial service: “It reflected a general feeling […] that the banks were not meeting the mass banking needs of the British population.” Intriguingly, this quote doesn’t refer to any events from the past few months, but to the introduction of the Girobank in the 60s, a measure intended to considerably improve upon the problem of low access to bank accounts in the UK: “In the early 1960s, the majority of adults in the United Kingdom did not have a bank account and the banks did not court business from the working classes, which they regarded as unprofitable.” Undeniably, things have improved quite a bit since then. And yet, the issue has never been resolved in full. In 2010, chancellor Alistair Darling finally announced more substantial plans to force banks into accepting customers applying for a basic bank account. But since then, there has been little more than yet more debates and analyses. According to Inside Government, “over one million UK households did not have a transactional bank account” at the end of 2011.

Spending power and its risks
But why, exactly, are banks refusing potential customers at all? Surprisingly, perhaps, there is, in fact, a perfectly reasonable explanation: Risk. Most of today’s current accounts provide you with considerable spending power. Thanks to the associated credit card, you can conduct major purchases with astounding ease. And the overdraft capacity of your debit card means that you can dip into and remain in the red for lengthy periods of time. As long as you can repay your debt, banks actually make money this way, charging interest on the amount borrowed. But in some cases, customers are no longer able to repay their credit, eventually causing them to default on their debts. To reduce these losses, banks are separating – from their point of view – the wheat from the chaff, turning down thousands of applicants each year. And those accepted are facing high fees.

With political processes intended to improve these issues currently stalling, it is good to know that there are now new solutions available. The experience from the banking sector has made us at eccount money realise that by eliminating overdrafts from the equation, we can considerably improve access to fundamental banking facilities for millions of UK citizens. Our eccounts offer precisely the kind of universal access the financial inclusion movement has always pleaded for – which spells good news not just for bankrupts and unemployed, but for anyone who’s faced financial difficulties in the past: Thank to the eccount, you can finally take access to fundamental banking facilities for granted again.

Resolute and rapid action is indeed essential, as the situation looks to be far worse than expected. According to a report by London-based think tank The Resolution Foundation, a young couple working 23 hours with one child and with a household income of £15,500 could see their entire working tax credits eliminated as a consequence of the new regulation, thereby cutting their income for 2012 by as much as almost twenty percent or £3,000. Perversely, these cuts were getting increasingly bigger the lower the household’s income, with single earners on the minimum wage in danger of loosing more than a quarter of their annual income – a serious threat to their livelihood. No wonder the report sounded the alarm bells: “Friday’s increase to the personal tax allowance provides a small boost to most people in work but millions of low to middle income families will have their tax credits cut at the same time”, according to Gavin Kelly, chief executive of the Resolution Foundation, “Those working under 24 hours a week face the most brutal cuts of thousands of pounds if they cannot find extra hours – a real problem given rising under-employment. These huge losses in income will push some families back onto benefits – and are totally at odds with the message of making work pay.”

His sentiments were mirrored by Thomas, who underlined the call for political action to offset the losses and provide for a safety net for the worst affected. At the same time, he pointed at the benefits of an eccount over traditional current accounts in balancing incomings and outgoings in the long run: “UK citizens can not prepare for everything. And yet, they do need to realise that an important part of their financial future lies in their own hands. By piling up credit card debt and massive overdrafts on their accounts, they are have become exceedingly vulnerable to shocks. eccounts are a logical and sensible response to this dilemma: By ruling out overdrafts, creating a transparent separation between spendings and savings as well as warning customers when their money level on the account falls below a certain level, they actively support a healthy financial lifestyle and can help to offset the problems caused by income losses. The earlier you switch the better: Black Friday may only have been the beginning.”

Before we turn towards the answers, let’s first explain the meaning of the word “guaranteed” in this particular context. When applying for a current account, banks will try to verify whether or not you might be a potential risk to them. This is done by means of a credit check, as part of which your past record in terms of paying your bills completely and on time is analysed. For a long time, this part of the application procedure was a mere formality and would usually be targeted exclusively at former bankrupts or those with a proven record of excessive spending. Today, however, banks have become over-cautious, with some potential customers being turned down for a single missed payment. The same holds true with regards to basic bank accounts, even though they’re already a stripped-down version of a current account and were originally introduced precisely for those, who weren’t granted a standard account. As a result, getting a bank account is no longer a given

Applying for an eccount differs considerably from these draconian procedures. We do spend a lot of time filtering out possible fraudsters, but this is more of a precautionary measure to protect the interests of our customers. Other than that, however, all you have to do is fill in a simple application form, wait for a few days and you’re ready to go. There will be no questions asked and even in case of a former bankruptcy or unemployment, you will not be required to explain the circumstances of your situation. Instead, we will make sure you can make use of your banking facilities as quickly and comfortably as possible. Rather than seeing you as a potential risk, we see you as a partner, as someone who is trying to make positive changes, take important decisions in their life and move forward. With the exceptions mentioned above, all applicants are guaranteed to be accepted as part of this philosophy and that’s why we frequently refer to our eccounts as guaranteed accounts.

You may ask yourself why we can afford this point of view, but really, credit checks are a sadly uninformative tool and tell us desperately little about someone’s ability and interest in paying their bills. Instead, the biggest problem of all are overdrafts, i.e. customers spending far more than they can afford. This is why we have decided to eliminate them with your best interest in mind: “By eliminating overdrafts from our portfolio of services, we can focus entirely on supporting our customers“, said eccount money’s Will Thomas, “We firmly believe that this is extremely helpful in terms of you being able to budget better and more wisely. Bank accounts have become an essential requirement today and by making our eccounts guaranteed for anyone who applies, we are putting all UK households in touch with these vital facilities again.”

1. An eccount eliminates overdraft facilities
Banks habitually assume that debts are the result of excessive spending. This may seem unfair, but it would be reasonable to admit that financial difficulties are indeed generally the result of people spending more than they have. Overdraft facilities are particularly problematic in this regard: By overdrawing your account, you are effectively taking out a loan from your bank, which will eventually have to be repaid. By eliminating overdraft facilities, for example by choosing an eccount, you are committing yourself to wise budgeting and to sensibly balancing your outgoings and your incomings.

2. An eccount equals transparent banking
By applying for an eccount, you’re getting two accounts for the price of one: Each eccount is divided into a bills account, which you can use to receive and send money, as well as a spending account tied to a MasterCard prepaid card, which allows you to shop at online- and retail-stores. The major benefit of this approach is that it allows you to monitor your spending behaviour. And since you can conveniently manage and review all of your transactions online, you can stay clear of unhealthy shopping sprees and make sure you still have enough money left at the end of each month.

3. An eccount includes an alarm function
With a regular current account, overdrafts are actually in the interest of your bank. After all, this is part of how they’re making money on you. Things are different for eccount-holders. Since you’re paying a monthly fee, our interest is to keep you a happy customer to make sure you stay with us. And from our experience, only financially healthy customers are truly happy customers. Which is why we’ve decided to warn you each time your balance falls below a particular level by sending you an SMS to your mobile phone. This will let you know whether or not there is still enough on your account to get through the month or whether you need to take some action and start economising. It goes without saying that this service is entirely free of charge.

4. An eccount means transparent fees
Many financial institutions love to hide their fees behind small print and oblique regulations:

Overdrafts mean you will have to pay back interest
Missed payments mean you will have to pay a fine
Credit cards may be free, but using them, again, means paying interest on your bills, which can quickly add up over time

With an eccount, meanwhile, there are no hidden fees: The costs of any additional services can be easily and quickly deducted from a transparent fees table.

Thanks to these features, an eccount makes for a great support tool for a debt-reduction and money-saving strategy: “Eccounts are perfect for anyone committed to a sensible approach to spending and banking”, said eccount money’s Will Thomas, “They are a great help in eliminating unnecessary fees and, generally speaking, make customers more aware of what they can afford – and what not.”