want to close high street bank accounts and open credit union account

[ethicalmoney]

Hi, anyone got any idea on how this might work? I don't have much debt, just a bit on credit card and overdraft amounting to about £4,000 but my income is sporadic and I've often found myself going over my limits and getting charges - as time goes on this is increasingly happening. I also would prefer to go with a credit union for ethical reasons. I wondered if there was anyway I could shut my bank account and associated CC down and open a CU and pay my bank a low amount eat month, ideally with an interest freeze? thanks for any advice.

[Never-In-Doubt]

Re: want to close high street bank accounts and open credit union account

Even a CU will charge for late/overpayment sadly. There won't be any difference swapping - plus not many CU's offer CC's...

[ethicalmoney]

Re: want to close high street bank accounts and open credit union account

aha, yes. I was more wanting an interest freeze and do go with someone more ethical, if they do have a current account. Or even just to put the majority of any spare income into a CU savings account perhaps...

[Never-In-Doubt]

Re: want to close high street bank accounts and open credit union account

The thing with CU's is saving assists in any borrowing but their rates aren't spanking; far from it.

I I use Leeds CU to save £50pm - just save that and never touch it. Not been tempted with the LCU Current Account as you pay a fee plus it's not as good as the main high street ones. Sometimes ethics need to be put aside, especially when it involves money - your hard earned money!!

[Undercover Elsa]

Re: want to close high street bank accounts and open credit union account

With regard to getting interest frozen, banks are very reluctant to do this (despite their protestations of "talk to us, we can help"). Unless you're in Dire Straits you won't get money for nothing. They will demand in depth Income and Expenses from you, and will only consider it if your circumstances are extreme. The only other way is to stop paying into the account until they default you and terminate it. Obviously this reflects badly on your credit file.
Once terminated charges and interest usually stop. They'll demand the full balance, but at this stage you can usually negotiate an interest free monthly repayment plan.
Before doing anything like this you'd obviously need to open a "parachute account" at another bank...although not necessarily a CU as explained by Niddy above.