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How to open a Bank Account and Apply for a Credit Card in the UK

March 20 , 2021 by: Amanda Goh

Opening a Bank Account in the UK

Whether you are moving to the UK for business, to study, or any other reason, a bank account is definitely something you should get done right when you arrive. While opening a bank account and getting a credit card used to be a difficult process in the past, it has recently become simpler and more straightforward. This article will help guide you through getting a credit card and opening a bank account in the UK.

Documents Needed to Open a Bank Account

To open a bank account and receive a credit card in the UK, you will need 2 main documents — a document proving your identity and a document proving your address. To prove your identity, you can either use your passport, driving license, or an identity card.

While to prove your address, you can provide one of the following documents: a tenancy agreement, your latest gas/electricity bill, a recent credit card statement, a current tax bill. However, if you have just arrived in the UK, you probably would not have any of these documents at hand. Thus, banks have become more flexible over the years in what documents they accept as proof of address.

If you are a student, you can show proof of address with a letter from your University’s admission office confirming your address. If you are working, multiple banks also accept letters from Jobcentre Plus, confirming your National Insurance (NI) number.

Alternatively, before you leave for the UK, you can go to your local bank and change your address to your UK address. Once you have done so, ask your bank to send a bank statement to your new address by post — allowing you to have a document proving your UK address.

Types of UK Accounts

There are various different types of bank accounts in the UK. A standard current bank account is one which you may want for everyday use, to pay bills, and to receive your salary. These standard current bank accounts can come in a debit card, a check book, or an overdraft protection. If you have a poor credit history, you can apply for a basic account. While if you would like to save money, you can apply for a savings account.

Which Bank Should You Apply To

While there are over 10 different banks in the UK, the 4 biggest banks are Barclays, Lloyds, HSBC, and NatWest — each having their own strengths and weaknesses.

Barclays is one of the oldest UK banks, with over 1500 branches just around the country. Applying for an account with Barclays is free, further coming with a contactless visa debit card. To apply for an account with Barclays is simple, with applying online being possible even before arriving in the UK. Once you have sent an application online, you will have to visit a branch in the UK to activate the account.

If you are a student, you can open a Student Additions account at Barclays. This account offers cashback from multiple shops, further including a free overdraft of up to £3000 (British Pounds).

If you have just arrived in the UK for the first time, you can open a New to the UK account with Lloyds. You are able to open this account just with your passport or identity card. To apply for this card, you will have to go down to a Lloyds branch with your relevant documents.

If you are looking for an international bank, HSBC operates in over 64 countries around the world. This means that you will be able to set up an account in your home country for the UK, before leaving. If you would like to open an account for day-to-day use, you can try their Basic Current Account. This account allows you to withdraw up to £300 a day with no monthly account fees.

NatWest offers a Select account that allows you to bank easily with their online banking app. This account if free and will also provide a contactless visa debit card. Further, if you lose your card, you will still be able to access and withdraw your emergency cash with just your security code.

If you are starting a business in the UK, you can open a NatWest Startup account — offering free financial services for 18 months. This account will also give you access to business events to help you and your company.

Photo by Mikhail Nilov on Pexels

How to Be Accepted for a Credit Card

To be able to obtain a credit card in the UK, you will need to: be at least 18 years old, be a UK resident, must not be legally restricted from obtaining a credit card. Furthermore, you will need to have a good credit history and a credit score. A credit score is a number reflecting the amount of credit risk you might have. This credit score will determine if a bank is willing to lend you money, how much you can borrow, and what interest rate you will be charged. To start building your credit score, you will need to open a bank account, set up Direct Debits and not miss your payments.

Opening and managing a bank account responsibly will show a good ongoing relationship between you and a bank. Next, set up some Direct Debit payments to help you pay your bills. Paying your bills on time is also important to raise your credit score.

Once you have a good credit score, you can apply for credit. You will have to go to your respective bank and apply with specific documents, including: your employer’s name and address, your bank account details, and your monthly/annual income.

ATM Charges

Generally, withdrawing money from an ATM is free if you use your bank’s ATM. Most banks do also offer free cash withdrawals even if you are not a customer. However, do note that not all ATMs are free. Some ATMs may charge you from £1.30 – £3 per transaction — do check if the particular ATM has charges before using.

 

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