Hsbc

mellymeep

Having mega problems with them at the minute, after struggling to live in a maxed out £1500 overdraft this year my nana has very kindly given me my inheritence from my grandpa who passed away last year to help me sort myself out. It was £1000 which means my account is now only -£280 (was paid last Friday.) Im wanting to decrease my overdraft back down to £1000 so I can start to manage my finances a bit better, i've just tried to do it online but there were errors coming up. And now i've just been on the phone for 30 minutes trying to explain to them that I don't want such a big overdraft anymore, but they have refused to decrease it!! Im really annoyed because I know that if I dont decrease it I will spend the money!

Is there anything I can do to get them to listen to me and decrease my overdraft?

Bargainetta

First of all can I congratulate on your very sensible attitude. Second I think you really will have to put your wishes in writing because there is a blanket assumption that you will prefer some sort of overdraft and it saves you getting charged for letters they may have to send if you make a mistake. Perhaps request that the overdraft is for their minimum available. I am with First Direct, part of HSBC, and I was annoyed about my overdraft at first but now I just ignore it and never use it - mine is the minimum. Actually, on the whole, I find HSBC really pretty fair and, at least, my savings with them were never really at any risk in all the financial meltdown recently. It's just that they are still a bank and it is a bit like expecting a fox not to kill chickens!

Lokolo

You will be charged £25 for changing your overdraft so in hindsight - is it really worth it?

Wait until you get into positive figures and then cancel it, a much better choice.

rb10

If you're able to get to a branch, try going to speak to someone. Whilst increasing an overdraft could be difficult, you should be able to decrease it at your request whenever you like!

kingnoodle

You could loan £500 to me?
Only joking, one possibility is to take out the extra £500 and put it into a savings account where you can't touch it and you will also earn interest on that too.

lindsaym22

Ah getting into the overdraft is never a good idea, but somehow we all manage it!! I managed to get the interest free overdraft, which is great! I only really got it in case the bills ran over.. I wasn´t going to pay 30 pounds every time I an a few pounds over at the end of the month. I haven´t been tempted to spend it either, which is super! My friend, however is in really bad debt.. she´s only 21 and has an extremely large overdraft and credit cards!! I warned her last year but she didn´t listen and is now in a huge hole. She works a lot and never seems to have any money because really all she is doing is paying off the overdraft! Hope you manage to sort yours out.. you will feel a lot better when you can see the light at the end of the tunnel!

Mike1989

Best bet is to go into your bank and book an appointment with either the student manager (if your bank has one), or, you can book an appointment with those who handle the accounts. Go in and talk with them and see what they advise. Might cost you as a previous member mentioned for switching amount, but at worst, unless you really like HSBC, you can always switch to another bank and ask for a lower overdraft limit. That would mean you wouldn't have to pay a fee to reduce it, if there is one.

kingnoodle wrote: »

You could loan £500 to me?
Only joking, one possibility is to take out the extra £500 and put it into a savings account where you can't touch it and you will also earn interest on that too.

Although on Martin's site he recommends that you can use your overdraft and put it in a high rate savings account, that is not really something you should advise someone to do. First off, it is kinda stealing, in terms and conditions of banks your agreeing to put your money into the account, and in a sense you have taken money which is not yours and you are profiting by it. Might be just about legal, but, for someone who is wanting to reduce their spending, its not really good advice. For instance;

£500 in an ISA at lets say 5% interest for arguments sake. That means you will make £25. Is it really worth borrowing money from an overdraft to make £25?

Admitted I wouldn't take £25 and throw it in a bin. But, if you take £500 that is not yours and put it in an account, make £25 and you have to make sure that you are not going to go over drawn. Its not really the best way to go about things when you are trying to get your finances under control.

rb10

Mike1989 wrote: »

Although on Martin's site he recommends that you can use your overdraft and put it in a high rate savings account, that is not really something you should advise someone to do. First off, it is kinda stealing, in terms and conditions of banks your agreeing to put your money into the account, and in a sense you have taken money which is not yours and you are profiting by it. Might be just about legal, but, for someone who is wanting to reduce their spending, its not really good advice.

Where in any T&C does it say that the money must be yours? I believe it to be totally legal - the bank is happy to lend the money to you, it's up to you what to do with it.

However, I agree totally with you that it's not necessarily good advice, it depends on the person. If you are the sort of person who might spend it, then it's not worth the risk for a small amount of profit.

I think your example is over-exaggerating as well - at the moment, you'll only get 5% from an ISA by taking a fixed account, and that's not a good idea with overdraft money as the bank can demand repayment of an overdraft at any time. So if you are doing this, it should be in an instant access account, which probably has a (much lower) variable rate.

TDQO

Put it in writing... they want you to spend it then go over so they can whack massive charges onto your account.

Just think about the coming year though... can you afford to reduce it? You're obviously working but will this be enough? One day you might need that extra 500 and they might not increase it again...

PinkPig

Putting money from an overdraft into a savings account is not remotely 'stealing'. You're perfectly entitled to spend money you've borrowed on anything you like. If you owe money to someone, that money is 'yours' to do as you want with as much as any other money. There is absolutely no further moral standard that you need to apply and the 'it's wrong' attitude is completely ridiculous. Making £25 for very little effort also sounds like a very sensible way of 'getting your finances under control' to me and as a poor student every little helps!

The only reason not to put the money in a savings account is if you think that makes you more likely to spend the money. It also makes sense not to go right to the very edge of your limit so that you won't end up paying charges if you make a mistake. Otherwise it's a sensible thing to do if you don't actually need an overdraft. For me it makes me much less likely to spend the money - having it in an ISA and knowing that I lose the allowance if were to withdraw it and start spending is much more of a disincentive to spend than if it's sitting there as an 'available balance' on my current account!

HannaB

Lokolo wrote: »

You will be charged £25 for changing your overdraft so in hindsight - is it really worth it?

I'm with HSBC and I think this charge only applies if you formally change your overdraft amount twice in 6 months. (I paid off my overdraft in stages - £250 every 6 months and formally reduced it everytime I made a payment. Now it's gone from £1500 to £50).

Are you online banking? If so, just send HSBC a secure message that says, "I would like to formally reduce my overdraft limit from £1000 to £(whatever)".

I'm not sure how this will affect the terms of your student account though. The might automatically up the overdraft by another £250 as you go into year 2 (because to other students this would take them to £1250 in year 2 and £1500 in year 3).

I agree that putting the money into a savings account would be smart to earn the extra couple of quid interest. But if you really want to hammer it into your mindset not to spend what you don't have, formally reduce the overdraft. No temptation then at all!

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