Abbey advance overdraft interest calculation

A letter and follow-up phone-call from Abbey revealed how they treat debit card payments with regard to interest:

While the statement date reflects the date the merchant requested the funds, the relevant date for interest calculations is the day the transaction was made. In other words: interest is based on the available balance, not statement balance. This means that you cannot calculate your interest from your statement.

Abbey's procedures are different from various other banks': HSBC, Halifax, Lloyds TSB, Cooperative base their interest calculations on the statement balance.

dti wrote: »

what counts as a day, one minute or 24 hours?

The 24-hr period between cut-off points. I am not sure what Abbey's cut-off time is, possibly 17:30.

dti wrote: »

recently Abbey seem to have started charging this as a day even if I am back in credit before 9am.

You need to be a bit more precise. As I detailed in post #2, debit card payments are treated differently with regard to the statement date.

If you have a Standing Order set up, which takes you overdrawn (within your limit), and you then top up the account before the cut-off point, you should not be charged.

Also, if an outgoing cheque is debited taking you overdrawn, a timely top-up should prevent any charges.

dti wrote: »

Also interest charge that appears on my account 8th June is for the time I was overdrawn in April I think, but staff at Abbey give me different answers

It clearly tells you on page 1 of your statement what you are going to be charged for and when.
Charges are applied in the following statement period.

dti wrote: »

staff at Abbey give me different answers

No point in asking. Frontline staff does not have the competence to answer questions like that. My experience is that they did not even understand how their overdraft charges are applied.



You may also want to have a look at the thread Abbey instant overdraft interest.