The 'Something for Nothing' State


#1

The something for nothing state is something that really annoys me, especially when I see it here. The place I see it most, is on the Students section. Many want the perks that the big banks can give, which (as I see it) Monzo can’t possibly afford.

I’ve not been to university, I don’t have any student debt, and I personally cannot think of anything worse. However, many go and love it which is great. But why do students want and/or need any of these perks? At the end of the day, the big banks want you to sign up to them and then get stuck in a rut with them until your dying days.

If I was a student, I would much rather have a bank account as smart as me. A bank account that is shaping the way for the future of banking. Yes, I would rather have a Monzo account than a legacy style account.

Alll views above are my own, and not those of anyone else unless they state somewhere that they are.


Direct Debit cashback - future Current Account
#2

I’m a student and I love Monzo and it would be my main spending card. I’m pretty sure that Monzo cannot afford to give out interest-free overdrafts to students, but some other banks do offer them. For example, Santander gives students £1500 overdraft interest-free. Trust me that overdraft would come in handy more than once when you are in uni. I don’t expect Monzo to provide those but that doesn’t mean we shouldn’t make use of these if someone else provides them.


#4

Be wary of comparing banks overdrafts – some give ‘guaranteed’ amounts, others ‘up to’ amounts – so make sure you’re comparing like for like.

However, you must ask for an extension or renewal each year, even on guaranteed limits – as they are not applied automatically.

Be wary of applying for the maximum overdraft possible just because you can. If you budget well you may not need it as anything other than a buffer, and the smaller your overdraft, the less likely you are to get caught in a dangerous spending spiral.


( related to Monzo CEO, Investor in Monzo ) #5

I suppose its called buying your custom which will eventually come with a price for their spendthrift habits of “free” money -granted some students do use this facility wisely , but a lot probably won’t - personally I would rather have an account that lets me control my spending and gives me a clear view of where , when and how I spend my money , yes I can do that with lloyds after about 3 or 4 hours of sifting through my account statements, but with Monzo its sooooo much easier and better use of my time - which is my valuable resource, rather than the £100 introduce a friend or the £15 / month current account fee for insurance “freebies” or the “free” overdraft facilities - to learn that there isn’t much in life that is free is a much more valuable lesson

edit - that should have probably come with a bah humbug warning :wink:


#6

Until there’s a Monzo bank account the students will need somewhere to pay in their loans and any other income so might as well take advantage of whatever freebies the big banks offer. A free railcard was my favourite offer - do they still offer these?

Here’s what I’d do at the moment (pre-Monzo bank account):

  • Get a student account that offers you the best deal, pay any income into this.
  • Get a Monzo pre-paid card and transfer your preferred weekly budget to it every week.
  • Try to do all spending through Monzo only using the other bank card if there’s a reason Monzo isn’t working (they warn it’s a beta and we should carry a backup card)

If you do need the interest free overdraft you can transfer it to the Monzo card but hopefully the apps budgeting facilities will help you minimise the dependency on it.

Once the Monzo bank account launches:

  • Pay in all your loans into the student bank account so you qualify for the benefits.
  • Once paid transfer it all to the Monzo bank account. Use it as your main bank account.
  • If you do need to use the overdraft you can use it to top up the Monzo account as before.

(james_e_bell) #7

I agree it is frustrating (im also of the opinion that the banks fund these freebies through charging those who cant afford it interest, fines etc) however it is valid consumer feedback (or behaviour if its actually making people choose something else).

However - if you are the student (or even adults when considering reward cards), who is to say that you shouldnt take the free railcard/cash/interest free overdraft etc etc - these are the current battlegrounds on which people ‘buy’ current accounts.


(Rumee Ahmed) #8

I’m currently a student with a Student account from Santander. They perks included a interest free overdraft and a free 4 year rail card. In my opinion it was totally worth it given the amount of times I would not have been able to make a payment when my loans would come through at a later date. A third of rail fairs is very nice to us as well. You are not or have not been a student and therefore don’t understand the depth of the situation. If I had to choose one account it would probably have to be the ‘legacy’ style account. Although I would get rid of it and replace it with :mondo: after graduating.


(Rumee Ahmed) #9

Most students don’t recive enough loans for ‘spendthrift’ habits. Most of us need overdrafts because we usually have to pay two months of rent up front before moving into the property in the summer period even though we don’t revieve loans until term starts in Autumn. In Autumn we also have to pay deposits for next year living accomodation, which is not covered within the first terms loan. The minority who do develop this so called ‘spendthrift’ habit are the wealthier ones whose parent sare paying for their education.


( related to Monzo CEO, Investor in Monzo ) #10

I don’t think you have to be either rich or poor to be a spendthrift. its about how you use and plan the use of your money

The use of bank accounts should let you plan your rate of spending, and let you know what you are spending your money on and where , and how much month there is left at the end of the money, or visa versa - hopefully.

Needing to supply two months rent as a deposit for a flat is not a new idea - it has probably always been there - to take out an overdraft to pay for it just shows a lack of financial planning until the problem is presented to you and you have to look for ways to solve it having left home to go into the world at Uni. Hopefully, with the functions planned for Monzo this will help in financial planning rather than just asking for more “free” money to carry on what you are doing - which sure as eggs are eggs will get out of hand for one reason or another one day - after all thats how banks make their money , by lending it, and then eventually charging you once you have got into the habit of living beyond your means.

I see using Monzo as a great way to take ownership of your financial decisions and their implications, rather than just waiting for your monthly bank statement to drop through the letterbox with your eventual overdraft charges in red.

And that is in no way a criticism of students or student life, some , most, use overdrafts very responsibly transferring it into Monzo lets you take control of the overdraft, and teaches financial responsibility, rather than the other banks that will keep offering you more and more “free” money - up to a point when you won’t be able to cope if you cant control your spending.