Abbey National taking £1500 of my overdraft away

claire8370

Hello people

I need some advice of my options here

Whilst at univertsity abbey gave me £2000 overdraft, I graduated in 2005, today I get a letter saying that on 1st Spetember this is going to be reduced to £500, surely they cant do this that quickly, my wages get paid into this account and I do not have £1500 to pay it off,
Is there anyway I can open another account that will let me have this much of an overdraft then pay the abbey off?

Thanks for reading.
Much worried Claire

becky004

claire8370 wrote: »

Hello people

I need some advice of my options here

Whilst at univertsity abbey gave me £2000 overdraft, I graduated in 2005, today I get a letter saying that on 1st Spetember this is going to be reduced to £500, surely they cant do this that quickly, my wages get paid into this account and I do not have £1500 to pay it off,
Is there anyway I can open another account that will let me have this much of an overdraft then pay the abbey off?

Thanks for reading.
Much worried Claire

Have you tried telephoning them, I had a letter stating my overdraft facility would come to an end on 1st July, I rang them and they are reducing it every month rather than taking it away completely. They also asked me how much I could reasonably afford them to reduce it by each month.

Salazar_2

I believe that overdrafts are repayable on demand so the bank are within their rights to reduce it or cancel it, even although it's going to cause you real inconvenience. My advice would be to speak to them with a view to reducing the overdraft incrementally over a period of time long enough to minimise the financial shock.

If they don't agree to that then open a new account without an overdraft as soon as possible (you won't need an overdraft facility as all your wages will be yours to spend) and abandon the Abbey account but contact them to arrange to pay off the overdraft at your own pace. While you're at it ask that they freeze interest and any charges on the account. I doubt they'll agree but asking does no harm.

chuckley

damn i i thought the current HSBC state was bad... at least they lettin u keep the overdraft, but just taking away interest free option.

but anyway speak to them, but in the mean time i suggest u get your wages poaid into another account incase they take all your wages.

daveboy

It isn't your overdraft....it is money they allow you to borrow.

If they want to reduce it or take it away altogether they can do so, providing they inform you in writing.

All of this would have been in the agreement YOU signed when the account was set up. :rolleyes:

Richard019

claire8370 wrote: »

Hello people

I need some advice of my options here

Whilst at univertsity abbey gave me £2000 overdraft, I graduated in 2005, today I get a letter saying that on 1st Spetember this is going to be reduced to £500, surely they cant do this that quickly, my wages get paid into this account and I do not have £1500 to pay it off,
Is there anyway I can open another account that will let me have this much of an overdraft then pay the abbey off?

Thanks for reading.
Much worried Claire

I suspect you've misread the letter (quite understandable whith the panic the idea would create).

I got the same letter from NatWest a couple of years ago and thought the same thing because it said "your interest free overdraft will be reduced to".

It was only when I read it back that I realised all they were saying was that they were reducing the interest free bit and that I would keep the full amount available. Even when I'd realised that it still looked as though they were saying that if I went over my interest free limit I would be charged interest on the whole lot when they weren't.

You'll also probably find that the leaflets and paperwork about the account actually tell you how much they're going to reduce it to and when they're going to do it so there's been plenty of notice (several years notice in fact).

Reread the letter to make sure what they're saying is the same as what you're reading. If you're going to see the overdraft actually drop massively and not just lose the interest free portion of it then go into your branch and explain to them that you can't afford to repay it in one go. They should be able to agree to increase the limit whilst you repay it so long as you do a certain amount each month. You will be charged interest on this increased bit but get them to agree to a timescale that you can afford to repay it over.

If you don't get much joy there then my advice would be to get an MBNA or Virgin credit card as unless you've got other debt I don't know about they tend to do big limits for people from the off. They also have a 15 month (with Virgin) balance transfer that you can make to your current account to bring you back to around zero.

You could come back to £500OD but then every little payment would incur interest for no good reason. You'll also probably find that in a year's time they'll want to take that interest free bit away so you're best to start getting used to it being at or above zero.

They'll charge you about 3% to transfer the money but as you're likely to be paying around 12% on the overdraft (£500 at 0% and £1500 at some figure in the high teens) that's very reasonable. You're then free to repay that over a longer term by either putting the money in savings until the due date (and making yourself some interest in the mean time) or if that's too much of a temptation just paying it off the card each month.