HSBC bank student account 2012/2013: We want your feedback

I'm really annoyed with HSBC. I opened my student account in Feb 2012, before any of their incentives, because I was interested in the 3% interest on balances up to £1,000 and the opportunity for a £3,000 overdraft.

I've seen very little of the 3% interest because I was silly enough to keep a balance above £1,000 until recently when I've taken advantage of cash incentives to open other bank accounts (didn't apply for overdrafts).

After being initially offered an overdraft of £1,500, it was kept at £500 which has only occasionally been used and then repaid within a week or so since Feb 2012 as I never needed it (I was assured I could apply for more at any time). I'm currently borrowing £139.59 from my overdraft as I misread the month of my student payment date and although I have money floating between two other accounts (and a large sum locked into an ISA until April) I wanted to increase my overdraft as a safety-net until my next payment/ISA is accessible. When applying, I was told I could apply for up to £5,000 as my account was granted 'Advance' status and although I thought this was wrong I knew I could repay it if I ever needed to use the full amount.

HSBC got back to me and said that this would be irresponsible of them as I am currently holding two credit accounts elsewhere (which are the two bank accounts without overdrafts) and this amount is not suitable for my income (my annual student payments are £16,000 as I have a child dependent and I recently had an annual summary saying my average monthly balance was +£2560). They now say I need to wait three months before I can apply for any increase again!

I am most annoyed because I recently took advantage of cashback available for a free credit check and I can see that this application has had a negative impact on my credit score - taking me from Good to Fair. While I obviously made some mistakes (probably shouldn't have asked for so much and might have been worth transferring money so that I was in credit with them), I feel really let down by HSBC after being so loyal to them. It really stings to know that I have friends who have lived off credit for years and have accumulated a lot of debt yet still have multiple large overdrafts with various banks!

I am looking at switching student accounts but not sure where I stand as I finish assessments in 11 weeks (although I don't actually graduate until November). Will probably pop into the branch of the account I like and ask their advice.