Help - Paying off an overdraft on an inactive account

pfloyd1984 · 30 January 2013 at 1:07PM

Hi folks, needing help and advice.

I have an old bank account with lloyds tsb that hasnt been used for over two years. There is currently an overdraft of £1300 and as agreed with the bank im making consistant monthly payments to of £60 pm.

The issue I have each time the payment is applied approx £30 of that is used to pay overdraft fees etc.

I have both phoned and visited the branch explaining that my attentions are to pay this off as soon as possible but I find it unfair to be paying the maximum I can possibly afford for only 50% of it to be used against the arrears. I have explained that I have no intention of ever using this account and would happily close it and continue the monthly payments. I found there staff in branch unhelpfull who insisted they cannot close the account and there is no other option.

Could someone please advise me if this is correct and what my best options are going forward.

Thanks

Danni-R · 30 January 2013 at 1:09PM

I'm in the same position with HSBC. Unfortunately I think they are correct. Its the joys of fees. You might be able to argue with them but its no different to your account being the main account. Telling them that you wont use it again doesnt help as either way they will get their money.

lazer · 30 January 2013 at 1:14PM

It is generally against the terms and conditions of your bank account to be using the overdraft facility when you are not using it as your main account.

Be aware that they can make the overdraft payable on demand and amy do so if you bring it to their attention that it is not your main account.

They are correct that you cannot close your account until the overdraft is paid.

Could you not get an overdraft for the same amount with the current account you are using as your main account and use this to pay the overdraft in your inactive account?
How much of an overdraft are we talking about - if you were to use this account as your main monthly account, would you be out of the overdraft for at least some days in the month, as this would reduce the fees?

pfloyd1984 · 30 January 2013 at 1:31PM

Danni I fear you may be right. Lazer i have moved to thinkbanking which ensures all debits are paid and there is no overdraft facility to customers.

Thanks for your replies

lazer · 30 January 2013 at 2:52PM

pfloyd1984 wrote: »

Danni I fear you may be right. Lazer i have moved to thinkbanking which ensures all debits are paid and there is no overdraft facility to customers.

Thanks for your replies

So you are complaining about a charge for borrowed money and yet are willing to pay £14 a month for think banking?

I ahd to google thinkbanking as i had never heard of it

I can see the benefits of thinkbanking for maybe teaching people about budgeting cash, but in reality what they do is easily done via online banking.
Have your salary paid into one account, and all bills from that account too.
With a speadsheet or a calculator you should be able to work out the total of all the regular bills - leave this amount in the account and transfer the remainder to a different account that you can use for other purchases.

For the sake of about 5 mins work a month, it will save you £14.50

Danni-R · 30 January 2013 at 3:54PM

Its no different to a credit card. You knew when you spent the money that you would need to repay it (I did too) but also fees.

If you want a simple account I think the co-op do one with no overdraft facility. add the £14.50 a month thats an extra 1/3rd off the dept a month.

ps. I'm really against the idea of having to pay for a bank account.

Help - Paying off an overdraft on an inactive account

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