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Halifax £1 per day charge for using authorised overdraft? Will others follow?
laura-uk_2
Posts: 18 Forumite
My dad has recently received a letter telling him that as of December he will have to pay a charge of £1 for every day he is in his authorised overdraft on his account with Halifax.
I am a recent graduate looking for work with a Graduate Royalties account with RBS - does anyone know if it is it likely that the other banks will bring in something very similar? I am quite worried about this, as I do not know how long it will take me to find a stable job and get out of my overdraft - if they do follow suit I'm going to be in big trouble... my authorised interest-free overdraft has a limit of -£1200, and I'm currently around -£1000!
And if RBS did do the same, is there anything I could do about it to avoid getting in more and more of a mess?
I am a recent graduate looking for work with a Graduate Royalties account with RBS - does anyone know if it is it likely that the other banks will bring in something very similar? I am quite worried about this, as I do not know how long it will take me to find a stable job and get out of my overdraft - if they do follow suit I'm going to be in big trouble... my authorised interest-free overdraft has a limit of -£1200, and I'm currently around -£1000!
And if RBS did do the same, is there anything I could do about it to avoid getting in more and more of a mess?
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Comments
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Well I don't know enough about your situation, but I've received the same letter from the Halifax, after 20 years of being with the bank. It's pretty disgusting actually. I probably don't go more than £300 into the overdraft - it's more convienience than anything - I know they're inefficient things - but that could mean £30 odd quid a month! I usually pay £3.50 for this!!! Argh!!0
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It's yet to be seen what the banks as a whole will do, pending the outcome of the bank charges test case.
You can be fairly certain, though, that all banks will bring in some form of new charging scheme in reaction to the case. The difference, this time, will be that it has legal backing to it - you can expect goodwill refunds to disappear along with the threat of a legal challenge.What would William Shatner do?0 -
the same has happend to me, I am living off my overdraft at the moment have done for some time and still was hoping for some time to come, but they told me today as the acount is in joint names in £1 per person per day :mad:, surely if you have had this facility there shouldnt be a great big charge, fair enough if they tell you from the onset of applying for a overdraft. :eek: Halifax :eek:0
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My dad has recently received a letter telling him that as of December he will have to pay a charge of £1 for every day he is in his authorised overdraft on his account with Halifax.
I am a recent graduate looking for work with a Graduate Royalties account with RBS - does anyone know if it is it likely that the other banks will bring in something very similar? I am quite worried about this, as I do not know how long it will take me to find a stable job and get out of my overdraft - if they do follow suit I'm going to be in big trouble... my authorised interest-free overdraft has a limit of -£1200, and I'm currently around -£1000!
And if RBS did do the same, is there anything I could do about it to avoid getting in more and more of a mess?
I would have thought that whilst you are on the Graduate account, you will be fine. The £1/day charges are instead of interest, and so as you are on an interest-free overdraft, I'd expect that this would become charge-free if RBS decided to introduce a similar charging structure.
However, I think it's highly likely that if/when the banks lose the test case over unfair bank charges, other banks will have to introduce either a similar system to Halifax's, or monthly account fees. So it's probably worthwhile trying to reduce your overdraft if you are able to.the same has happend to me, I am living off my overdraft at the moment have done for some time and still was hoping for some time to come, but they told me today as the acount is in joint names in £1 per person per day :mad:
That is incorrect. The charge of £1 is applied to the account if it is overdrawn, regardless of whether it is a single or joint account.surely if you have had this facility there shouldnt be a great big charge
You are borrowing their money, why shouldn't they charge you for the privilege?fair enough if they tell you from the onset of applying for a overdraft. :eek: Halifax :eek:
They tell you from the onset that:
(i) They can recall the whole overdraft whenever they like - so you certainly shouldn't be relying on it.
(ii) They can change the T&Cs of the account (which include the way they charge for overdrafts) by giving you 30 days notice. They have given you about two months notice.0 -
You are borrowing their money, why shouldn't they charge you for the privilege?
QUOTE]
No that's not completely fair. Banks should be trying to help people here and now - and this is a massive and unfair hike in prices.
I don't use a lot of my overdraft - but its useful if I need to. I understand you SHOULDn't use them normally, but in a busy life, we do.
If I go over by £100, into an arranged overdraft, for 20 days, I get charged £20. Previously that was about £1. And if all others follow, then there won't be any choice.
Added to this - the Halifax offered me £1500 overdraft a couple of months ago - without me asking. I had to call to tell them to take it off. It was obvious why they did this - it's not on. I thought they were meant to clean up their act.0 -
I don't use a lot of my overdraft - but its useful if I need to. I understand you SHOULDn't use them normally, but in a busy life, we do.
If I go over by £100, into an arranged overdraft, for 20 days, I get charged £20. Previously that was about £1. And if all others follow, then there won't be any choice.
If you need to spend more than you have, and it's just for a short time, then a credit card is a far better way of doing this. You get it absolutely interest free, provided you pay it off in full.Added to this - the Halifax offered me £1500 overdraft a couple of months ago - without me asking. I had to call to tell them to take it off. It was obvious why they did this - it's not on. I thought they were meant to clean up their act.
They do not charge anything for having an overdraft facility on the account. It's only if you actually use it that you will get the charge. So by giving you a maximum available overdraft of £1500 does not mean you will be charged anything.0 -
Ok. I understand what you're saying. You know what? If I had a credit card, I'd use it too much. So I don't have one. I know, in a perfect world, I shouldn't use the OD. A lot of things would be different if they worked that way....they don't though. There would be little point in this website if it all worked out like that.
With my previous arranged overdraft, I could go £100 under, and not be paranoid about checking every day. £1 is not a massive amount, although maybe a high comparitive APR - you can take the hit. £20/£30 is.
It's plain that they increased my OD so close to them making this change to get people more submerged in their OD. People do that - maybe not some of the perfect money saver/card surfers from here, but in the real world, they do.
I'm afraid the atitude of "do it this way, use this card, pay it back, speak with this loan company, and it'll be fine, let the banks do as they wish" is not going to turn around the stupid borrowing atitude we have at the moment.0 -
Product managers at the banks might. I suspect all banks are considering their options. If I was a Product Manager I would probably ensure Graduate accounts were treated a little differently.I am a recent graduate looking for work with a Graduate Royalties account with RBS - does anyone know if it is it likely that the other banks will bring in something very similar?
It wouldn't mean £30 a month because for many days you would be in credit. If you transfer to the Reward account and fund the account with £1,000 you will also get a £5 credit.Well I don't know enough about your situation, but I've received the same letter from the Halifax, after 20 years of being with the bank. It's pretty disgusting actually. I probably don't go more than £300 into the overdraft - it's more convienience than anything - I know they're inefficient things - but that could mean £30 odd quid a month! I usually pay £3.50 for this!!! Argh!!
Indeed, if you don't exceed £300 overdraft I'd suggest you change to the Ultimate Reward account. Costs you £12.50 a month but you get a fiver back if you fund with £1,000, no charge for overdraft less than £300 and free breakdown cover, family travel insurance and mobile phone cover (amongst other things).
You really could turn this situation to your advantage.
It's no different to them increasing their interest rate. How would you have coped with that? Time to work out exactly how you are going to get out of overdraft instead of relying on a short term borrowing method to fund your lifestyle long term. The Debt-free Wannabe board is an excellent place ot seek support. It's also £1 per account per day. They don't charge double for a joint account.the same has happend to me, I am living off my overdraft at the moment have done for some time and still was hoping for some time to come, but they told me today as the acount is in joint names in £1 per person per day :mad:, surely if you have had this facility there shouldnt be a great big charge, fair enough if they tell you from the onset of applying for a overdraft. :eek: Halifax :eek:
They are giving up their income from £28 and £35 charges that are currently applied. They are not registered charities and you should hardly be surprised that they are looking to recover lost income elsewhere.No that's not completely fair. Banks should be trying to help people here and now - and this is a massive and unfair hike in prices.
Knowing the charge in advance, I'm sure you'll manage your money better because you know exactly what you'll be charged if you don't.If I go over by £100, into an arranged overdraft, for 20 days, I get charged £20. Previously that was about £1. And if all others follow, then there won't be any choice.
No ulterior moment at all. They performance scored your account (as they have for the 20 years that they've been offering current accounts) and gave you the choice of having the facility available.Added to this - the Halifax offered me £1500 overdraft a couple of months ago - without me asking. I had to call to tell them to take it off. It was obvious why they did this - it's not on.
I'm sorry, but that really is paranoia.It's plain that they increased my OD so close to them making this change to get people more submerged in their OD
The charges couldn't be clearer.I thought they were meant to clean up their act.0 -
With my previous arranged overdraft, I could go £100 under, and not be paranoid about checking every day. £1 is not a massive amount, although maybe a high comparitive APR - you can take the hit. £20/£30 is.
Thirty pounds - or twenty five as it will be if you get the reward - is not a massive amount to pay for, say, one thousand five hundred of finance each month. On a credit card with a 2.5% minimum repayment, it'd be closer to forty.It's plain that they increased my OD so close to them making this change to get people more submerged in their OD.
It's not plain at all - that's a pretty serious accusation, and the Office of Fair Trading wouldn't take kindly to that practice at all. Halifax is far, far from stupid enough to increase overdrafts to earn fees, despite what the cynic in you might think.I'm afraid the atitude of "do it this way, use this card, pay it back, speak with this loan company, and it'll be fine, let the banks do as they wish" is not going to turn around the stupid borrowing atitude we have at the moment.
And frankly, neither is your whiny attitude about a company changing their charging policy as they are entitled to do. If they were changing it to a hundred pounds a month, I'd understand - but twenty five pounds a month for short term, small balance lending is not a lot. Not a lot at all. Halifax's current rate of 19.5% even works out to be roughly the same on the amount given above.
The real attitude problem here is yours. You do indeed have a stupid borrowing attitude and you are hiding behind this "perfect world" excuse/nonsense. Unless you're eating stale bread and gruel every day, there is something you could cut from your monthly spend to reduce your overdraft every month.
Maybe your internet?What would William Shatner do?0 -
Ok, totally get your point here- there are better ways to fund a couple of hundred quid. As for paying £12.50 a month/£140 a year for these things - no chance - I doubt I pay anywhere near that for those things they offer.
BUT...let's not forget the main point here - there's such a thing as corporate responsibility. Where else would you be allowed to add such a massive hike to your prices, especially when they affect the people that need the help most.
This is a money making scheme - I know they are businesses, that should be able to make money, but how about a bank turns round, says they understand that they helped !!!!!! up the economy, and plays it straight? Don't send out unasked for increases to OD's to bury people further in. Treat me as I am- someone who stupidly and lazily goes a couple of hundred quid under every month, and charge me a couple of quid. If I go further under, charge me more. I'm not squandering my 'wealth' or commiting a crime, I'm just blummin busy, and I don't mind paying a quid or two for this. Don't increase my charges by 100%. Make people like the banks, be fair.0
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