New Halifax Overdraft Charges
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£1000.00 divided by £7 multiplied by 0.01p multiplied by 365 days = £521.43
52% interest
But that assumes you pay the daily charge each day - that is the charge is not added to the overdraft.
If the daily charge is added then after a year it is £1681.40 - effective interest rate of 68.14%0 -
Like the insurance companies, they are relying on the inertia of the customer by just accepting these charges rather than changing. Time to vote with your feet and move to another bank. If enough people do that then Halifax will realise they have made a mistake.0
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According to Halifax the charge is added daily so as stated above the APR is 68.14% on £1,000.
I think Halifax should be publishing that sort of figure but they won't because if your balance was £6.99 the APR would be 0%0 -
Like the insurance companies, they are relying on the inertia of the customer by just accepting these charges rather than changing. Time to vote with your feet and move to another bank. If enough people do that then Halifax will realise they have made a mistake.
More easy said than done. I for one know I will be unable to get a bank account which matches my current limit. If I could then I wouldn't be on here
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The charge is added daily so the APR is about 68.4%.To be fair, if you know what your outstanding overdraft balance will be in October 'you' can work out what your overdraft charges will be. What use is it for Halifax to tell you what the overdraft charge will be on a future hypothetical overdraft balance? It might actually be unwise for them to do so as some people may be misled by a discussion over future hypothetical charges.
For Info: I 'think' the APR is approx 52%.
Also for info: Don't forget that overdrafts are usually repayable on demand.
((1+0.01/7)^365.25 -1) * 100
They don't actually state the APR anywhere on the letter - I thought they had to state APRs for all loans, or have the rules changed?0 -
[FONT=Tahoma, sans-serif]I think that Halifax will get away with not publishing an APR because of the way the charge is calculated i.e. it is 1p on every whole £7.
[/FONT] [FONT=Tahoma, sans-serif]So the APR on £6.99 is 0%, on £13.99 it is 53%, on £100 it is 65.95% and on £1,000 it is 68.14%[/FONT]0 -
To be fair, if you know what your outstanding overdraft balance will be in October 'you' can work out what your overdraft charges will be. What use is it for Halifax to tell you what the overdraft charge will be on a future hypothetical overdraft balance? It might actually be unwise for them to do so as some people may be misled by a discussion over future hypothetical charges.
For Info: I 'think' the APR is approx 52%.
Also for info: Don't forget that overdrafts are usually repayable on demand.The charge is added daily so the APR is about 68.4%.
((1+0.01/7)^365.25 -1) * 100
They don't actually state the APR anywhere on the letter - I thought they had to state APRs for all loans, or have the rules changed?
I put 'think' in quotes as I only did a rough calculation. Clearly the answer is different if the charge is added daily and the APR will change according to the specific balance so it's rather difficult to state the APR.
If you know it's 1p per day per £7 you can work out the charge as you go along but the short answer is that it's very expensive (as most overdrafts are) and you should only use it short-term and only if absolutely necessary.0 -
As someone who rarely dips into her overdraft, I welcome these new charges. It used to be so expensive to be charged a whole pound to borrow a few pounds for a few days. Now it's literally pennies! Cheers Halifax!0
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While I agree with the sentiment of voting with their feet for those who don't like the changes, I hardly think that Halifax (and the rest of LBG) will be quaking in their corporate boots at the prospect of a rash of folk flouncing off, defiantly proclaiming that "I'll take my overdraft elsewhere then"!Time to vote with your feet and move to another bank. If enough people do that then Halifax will realise they have made a mistake.
While there is sometimes a perception among the heavily and/or permanently overdrawn that they're doing banks a big favour by paying lots of fees, they're kidding themselves on if they see themselves as desirable customers - I'm not suggesting that LBG are deliberately trying to lose such customers but equally I doubt they'll be heartbroken about it either....0 -
Halifax have put an overdraft calculator on their website for you to see what the charges may be.
I can understand why they want people to ring back in October, although somewhat frustrating - as already said, life happens and things could get worse, or better.
http://www.halifax.co.uk/bankaccounts/overdraft-assessment/fee-calculator.aspI’m a Forum Ambassador and I support the Forum Team on the Budgeting & Bank Accounts, Credit Cards, Credit File & Ratings and Energy boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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