Word to the wise on First Direct..

illuminate

just a warning about their overdraught facility.

Now I didn't spot this when I moved my banking to them so others might miss it also.

You get charged £25 for them, to accept and provide an overdraught facility. They waive the charge upon you opening the account, but failed to tell me that the annual review of your overdraught that most banks do, is treated as a NEW APPLICATION.... and its done automatically.

This in effect means that they will charge you £25 pa for having an overdraught. Though they don't word it that way.

I feel a bit miffed as it negates all the benefit I thought I would get from the first £250 of my overdraught being interest free.

tinkerbell84

They've never charged me for my overdraft - I think they only charge if you ask them to change the amount.

Once a year they review it, but they don't charge for it!

illuminate

well they charged me and haven't altered the value of my overdraught.....

Can anybody clear this up ?

I did query it over the phone with them when the charge was applied, but was told "its standard practice" by CS.

Extant

As I recall, it runs along the same lines as HSBC's retail banking policy - any request for an overdraft, be it formal or informal, will trigger the charge.

Existing overdrafts, however, get reviewed - but not charged. I'm sure ShelfStacker will come clear this up soon enough.

ShelfStacker_3

Right. If you've applied for an overdraft in the past 6 months, formally or informally, any application for another/increased one (formal or informal) will incur a charge, unless it's the first ever overdraft you've had. At renewal, the same terms apply. Put simply, if you're always upping your limit, it'll cost you loads, if you stay with the same limit forever it'll cost you nothing.

If they've charged you at the review, and your limit hasn't been increased or you haven't been over it in the previous six months, then that's an error and you should query it. If you have done any of those things, and they have charged you, it's exactly what they've told you they would do, really.

dlk

They only charge for renewing the overdraft if you have exceeded you formal overdraft limit in the last 6 months. This is because any request for an overdraft can be a chargable event but if its the first one you've had in 6 months they waive it. They will be able to tell you when you had your last overdraft request i.e when you exceeded your limit

illuminate

OK..... just gone back through my statements. Looks like I went overdrawn by a couple of quid for a day back in October.

Now I can't find any charge that was levied for this back then, so I assume the £25 charge relates to this.

Does that mean that if I had gone overdrawn on multiple occasions, then I would have incurred multiple £25 charges at my review ?

ShelfStacker_3

illuminate wrote: »

OK..... just gone back through my statements. Looks like I went overdrawn by a couple of quid for a day back in October.

Now I can't find any charge that was levied for this back then, so I assume the £25 charge relates to this.

Does that mean that if I had gone overdrawn on multiple occasions, then I would have incurred multiple £25 charges at my review ?

No, you'd still have only incurred the one at your review. You may however have incurred the fees all those other times for asking for an informal OD.

illuminate

So let me get this right....

You get charged there and then for an "informal" over OD.

Then get charged annually for a "formal" OD if you've had an "informal" OD ?

ShelfStacker_3

illuminate wrote: »

So let me get this right....

You get charged there and then for an "informal" over OD.

Then get charged annually for a "formal" OD if you've had an "informal" OD ?

If the informal OD was in the 6 months prior to the review date of your formal limit, yes. But you wouldn't have been charged if the informal OD was under £10.

The way to think of it is that your original limit expires, and FD then either cancel it or agree a new one in its place, subject to the standard arrangement fee policy. The policy is that if you've arranged an OD, formally or informally, in the previous six months before you arrange another one, you get charged the arrangement fee. Basically it works out that if you go over your limit or increase it all the time, you get charged, but if you stick with one limit and never go over it the OD is effectively free.