Halifax Reward

YorkshireBoy

bert&ernie wrote: »

I think the OFT might have something to say about it.

That could be a little awkward, since it was the OFT that was asking for more transparent T&C's and an easy to understand fee structure which was fair(er).

And to be honest it doesn't come much more transparent than this...

£1 per day if you use a small overdraft
£2 per day if you use a large overdraft
£5 per day if you spend, or commit to spending, money without a pre-agreed authorisation to do so

...and no more 'unfair' £28/35/39 charges.

On the subject of the old charges for paid and unpaid items, the new structure will present the customer with more problems. I really can't see the banks agreeing to release a DD payment because there's nothing in it for them now is there?...even if they could make £5 per day out of it. I think we'll see banks refusing payments (and being happy with the £1 or £2 daily fees), leaving the customer to ring round the DD originators to make their peace with them.

I have to say that my professional expertise is more focused in credit cards. If a credit card product were designed to work in a similar way, it would have to be marketed with an eye-watering APR.

As the 58% APR 'black' cards and Coutts etc are, because they have to include the annual fee in the APR calculation. However, and as you will know, the BT fees and cash advance fees do not have to be included now.

Could the £1 and £2 usage fees be classed as BT/cash advance fees in the context of EAR/APR comparison, and so a challenge wouldn't be possible?

bert&ernie

YorkshireBoy wrote: »

That could be a little awkward, since it was the OFT that was asking for more transparent T&C's and an easy to understand fee structure which was fair(er).

And to be honest it doesn't come much more transparent than this...

£1 per day if you use a small overdraft
£2 per day if you use a large overdraft
£5 per day if you spend, or commit to spending, money without a pre-agreed authorisation to do so

...and no more 'unfair' £28/35/39 charges.

On the subject of the old charges for paid and unpaid items, the new structure will present the customer with more problems. I really can't see the banks agreeing to release a DD payment because there's nothing in it for them now is there?...even if they could make £5 per day out of it. I think we'll see banks refusing payments (and being happy with the £1 or £2 daily fees), leaving the customer to ring round the DD originators to make their peace with them.As the 58% APR 'black' cards and Coutts etc are, because they have to include the annual fee in the APR calculation. However, and as you will know, the BT fees and cash advance fees do not have to be included now.

Could the £1 and £2 usage fees be classed as BT/cash advance fees in the context of EAR/APR comparison, and so a challenge wouldn't be possible?

I think transparency is good, and I'm no real fan of the APR/AER anyway. I do however believe in the principle that prices should be quoted in a comparable way. If, and I believe they will, the other banks move their pricing strategy in the same direction, then I think this could present a challenge to consumers. Each bank will have a slightly different pricing mechanism and comparisons will become very difficult.

In this case, I'd say that the AER is rendered obsolete by this new pricing scheme.

I do think there needs to be a standard metric that can be applied to different pricing schemes, using various standard reference values as required, to enable a straightforward comparison between providers.

One example that springs to mind is the changes to PPI. In credit cards, its currently expressed as xx pence per £xx of balance. The recent Competition Commission recommendations are that it should be expressed as a monthly cost per £100 of monthly benefit - this enables the consumer to compare their credit card PPI policy with a stand alone income protection policy.

Milarky

So, just to clarify (as confirmed by scooby359's post #18) there will be no charge for having an overdraft facility, merely use of an overdraft. And 'use' is where the account remains overdrawn for one or more days. Where the overdraft is used to make payments - but the account balance restored to at least '0.00' on the same day, the overdraft is not counted as being used and no charge will apply?

(I can live with that)

What is annoying is the sloppy journalism of the BBC item which merely (and ambiguously) stateS

Instead, customers with an arranged overdraft of up to £2,500 will pay £1 per day; those with a higher arranged overdraft will be charged £2 per day; and anyone with an unarranged overdraft will have to pay £5 per day.

YorkshireBoy

Milarky wrote: »

Where the overdraft is used to make payments - but the account balance restored to at least '0.00' on the same day, the overdraft is not counted as being used and no charge will apply?

From the Halifax press release...

Traditional unarranged overdraft fees will be removed – no debit interest, no monthly unarranged overdraft charges and no fees for paid or unpaid items will be applied. No charge is made if an account is brought into credit by the end of the banking day.

http://www.hbosplc.com/media/pressreleases/articles/halifax/2008-12-12-Anewapproa.asp?section=halifax

LongTermLurker

YorkshireBoy wrote: »

From the Halifax press release...

When's the end of the banking day? When they close their doors or midnight? I think the former.

There's no shortage of ambiguity in the press release, is there?

cannonball_2

Looks like I'd better find something else then quick as I use my overdraft a bit during the month. Its just not an account for you, if you are going to be overdrawn is it. :rolleyes:

YorkshireBoy

LongTermLurker wrote: »

When's the end of the banking day? When they close their doors or midnight? I think the former.

You're wrong!...it's neither.

The end of the "bank working day" is 5pm on any day which is not a Saturday, Sunday, or English bank or public holiday.

There's no shortage of ambiguity in the press release, is there?

The 'detail' is in the T&C's...

http://www.halifax.co.uk/HelpCentre/pdf/1_336608-3.pdf (page 6, section 2, condition 1.1, 3rd bullet)

LongTermLurker

cannonball wrote: »

Looks like I'd better find something else then quick as I use my overdraft a bit during the month. Its just not an account for you, if you are going to be overdrawn is it. :rolleyes:

If the offer still stands, A&L don't charge overdraft fees for the first year and then I think they're capped at £5pm.

Halifax clearly don't want people to use the facility do they?

LongTermLurker

YorkshireBoy wrote: »

You're wrong!...it's neither.

The end of the "bank working day" is 5pm on any day which is not a Saturday, Sunday, or English bank or public holiday.The 'detail' is in the T&C's...

So no getting home from work and desperately sending a FP in then...

cannonball_2

LongTermLurker wrote: »

If the offer still stands, A&L don't charge overdraft fees for the first year and then I think they're capped at £5pm.

Halifax clearly don't want people to use the facility do they?

Or maybe they do!:D Because the moneyback account has such a good overdraft rate, this is going to shock a few people isnt it, especially if their overdraft is large.