Banks cancelling overdrafts

Turkey_Machine

Lokolo wrote: »

All the people who are living in their overdrafts and not coming out of them, whats wrong with a loan? Pay off the overdraft, budget, pay back the loan, and after a year or 2 you are free, being able to budget and you shouldn't have problems again.

I was told by my family and friends never to get a loan this young (I'm 20, yay me!), as you'll struggle to pay it off. Try telling a student a loan is a sensible option rather than an overdraft, please, I doubt you'll convince even the most desperate!

A loan is a very crap way of lending to somebody without job security:- need £1000 to pay off that overdraft? Here, have this at 20% (or some other royally-inflated figure the banks pluck out of their !!!!!!) interest over 4 (or less/more) years! It ends up costing less to have the overdraft + interest than it would the loan + interest, and if you can't make up re-payments on the loan you're in deeper trouble than you were with the overdraft!

A loan to get rid of the overdraft is only a sensible idea if the overdraft interest rate and repayments end up being more than the interest of a loan would be, and that's the only time it should be considered in this circumstance.

Is there one thing we can agree on as consumers? That when the banks do withdraw the overdraft and then whack on charges they're taking the proverbial pee? Apart from the fact they're unlawful, they just plummet you deeper in the red!

Justamum

Lokolo wrote: »

So you're saying even on minimum wage of £12k. living off £4k (not inc rent) people can't save?

Say that to those on the DFW board. Everyone can cut back, just need willpower, frugal spending and common sense and anyone can do it.

Currently as a student I don't have a lot of money to spend, after rent I spend around £300-£400 a month,, that includes going out and partying, petrol, car insurance and maintenance, food, bills (interenet, phone, gas and elec)

I have plenty of willpower, spend very frugally and have common sense, thank you very much.

After rent and bills I'd love to have £300-£400 a month to spend on going out and partying. (On second thoughts, no I wouldn't.) Sadly with three children our outgoings are probably far higher than yours. Electricity and oil cost £190 - and we don't even have the heating on!

Lokolo

Justamum wrote: »

Some people live on £4,000 a year? Is that before or after all essential outgoings? Or do they own their homes outright, or pay no, or little, rent (council house for instance). Our rent is currently £10,200 a year. In order to live on that little we would have to live in a cardboard box. Everybody's circumstances are totally different, so you can't say that because some people manage on so little that everybody can.

And no, not everybody can save. All our money is tied up in essential outgoings. Sorry to pop your balloon.

Thats after rent and bills. To be quite honest I don't believe that you couldn't cut back on your outgoings and save. By all means you can say all you want but even on minimum wage with 2 of you, thats £20k. £10k on rent, £10 a year to spend on bills and food. Food of £150 a month is £2k. Bills of about the same, thats another £2k. Clothes £500. Car another £1k-£2k depends on what you drive and insurance. £100 TV licence, although not an essential. Do you have Sky or VM? Is that an 'essential' or a luxury?

Do you have a budget planner? Do you track everyday outgoings?

By all means I am not saying the banks are in the right here but I do believe there are other options available to the consumers which they haven't considered.

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£190 between 2 of you is £85. I currently pay £35 myself (theres 5 of us, and adds upto just over £160 a month between us). Although we got our bill throught and owe a further £250 since September - opps!. We now only have the heating on from 7-9 in the morning

My £300-£400 includes bills, just not rent.

By all means I know children are expensive, we have all been one, but I am sure somewhere you could cut back.

Oh yeh and my expenses has gone up, shopping for myself costs around £100-£120 a month compared to £80-£90 6 months ago :-|

Kavanne

Justamum wrote: »

I have plenty of willpower, spend very frugally and have common sense, thank you very much.

After rent and bills I'd love to have £300-£400 a month to spend on going out and partying. (On second thoughts, no I wouldn't.) Sadly with three children our outgoings are probably far higher than yours. Electricity and oil cost £190 - and we don't even have the heating on!

He didn't says 300-400 on going out and partying, just that it was included in that. He also has his bills to pay and food to buy out of that!!!

ahai1

Most of the people have knowingly taken out things like mortgages and other stuff which they cannot afford to do so it is not the fault of the banks all the time. I agree the banks should take their share of the blame but at the same time they did not hold a gun to their hand and the people were not that stupid so I don't buy the assertation that the customer is blameless.

As I have said before people should seek professional money management advise.

Justamum wrote: »

The banks have been selling loans to gullible and willing people. Salesmen tend not to tell you the pitfalls and negatives about their product. Credit cards are glossily advertised with wonderfully low interest rates and huge amounts you can borrow. Not everyone is savvy enough to understand what they are getting themselves into.

Personally, we don't have loans and credit cards (or debt cards as I prefer to call them). The only money we owe is our overdraft which we NEED to use. My husband has been bringing home just over £1500 a month, but our outgoings on rent and bills (including the overdraft charge, so it's not 'free' money) is just under £1250. If it wasn't for the child benefit money we wouldn't eat. I feel guilty about it, but my mum tends to buy the children clothes out of her pension. I am trying to reduce our overdraft but it's an extremely slow process. Comments such as "everyone should have some savings" don't help - there are thousands and thousands of people who just don't have the finances to be able to save.

If the bank took away our overdraft suddenly and demanded instant payment, then piled charges on top because of "unauthorised" spending, then we would very quickly end up owing hundreds, and probably being evicted for non-payment of rent. It's that bad for lots of us.

Lokolo

Turkey_Machine wrote: »

I was told by my family and friends never to get a loan this young (I'm 20, yay me!), as you'll struggle to pay it off. Try telling a student a loan is a sensible option rather than an overdraft, please, I doubt you'll convince even the most desperate!

A loan is a very crap way of lending to somebody without job security:- need £1000 to pay off that overdraft? Here, have this at 20% (or some other royally-inflated figure the banks pluck out of their !!!!!!) interest over 4 (or less/more) years! It ends up costing less to have the overdraft + interest than it would the loan + interest, and if you can't make up re-payments on the loan you're in deeper trouble than you were with the overdraft!

A loan to get rid of the overdraft is only a sensible idea if the overdraft interest rate and repayments end up being more than the interest of a loan would be, and that's the only time it should be considered in this circumstance.

Is there one thing we can agree on as consumers? That when the banks do withdraw the overdraft and then whack on charges they're taking the proverbial pee? Apart from the fact they're unlawful, they just plummet you deeper in the red!

Yeh I agree the charges are compeltely out of order and I do think banks shouldn't be taking them away like this but there are other options.

If you are still in an overdraft for over 6 months and struggling whats wrong with coming onto sites like this, asking for budgeting help? I have a budget planner (be it a v ery bad one as what I say I spend and what I then do is completely different!!!!) to help me.

Yeh loans are quite expensive sometimes but if you are really struggling, go into bank and ask for help. I think banks have a legal obligation (someone confirm) to help those that are struggling financially, you go into a bank, say you are struggling and you want to get rid of this debt, organise a repayment plan etc. People can do it but they just don't see how they can when there are SO many options available.

Justamum

Lokolo wrote: »

£10 a year to spend on bills and food. Food of £150 a month is £2k. Bills of about the same, thats another £2k. Clothes £500. Car another £1k-£2k depends on what you drive and insurance. £100 TV licence, although not an essential. Do you have Sky or VM? Is that an 'essential' or a luxury?

Do you have a budget planner? Do you track everyday outgoings?

By all means I am not saying the banks are in the right here but I do believe there are other options available to the consumers which they haven't considered.

I wish food and bills came to £10 a year!

£150 a month on food for 5? I don't think so. Leccy, oil, phone come to £245 - we don't have the luxury of shopping around over here. £500 on clothes? We don't buy clothes except school clothes for the children. Have you seen the price of children's shoes. Don't watch tv - cancelled that a couple of months ago. And no, we didn't have sky or VM (whatever that is )

Trying to teach your grandmother to suck eggs I think. I budget for every single penny that comes in and goes out. And I mean every penny has to be accounted for. In fact I'm a bit anal about it tbh. We have a car, but DH goes to work on the bus - it works out cheaper. From what I've read on this thread most of the people are stuggling because their essential outgoings exceed their income. A single person really cannot understand how difficult it is for families to manage. Walk a day (or a week) in the shoes of most of us before you criticise.

Lokolo

Ha I meant £10k

I am assuming this is for 2 people on minimum wage. I am sure you both earn over minimum wage.

£500 - charity shops etc. and shoes, in Stafford we have a cheapo shoe shop which sells shoes for £10 and such! Although you do get what you pay for.

VM = Virgin Media.

Yeh I agree people are struggling now but what about the past? To be quite honest I haven't been able to save over the past few months because of increased costs (petrol back in the day being over £1.10 a litre URGH) and food now going through the roof.

I tend to be on the savings board a lot and the first thing we tell people to do is to save at least 6 months salary in case things get paid. This is what people need to realise, save for the bad times because everyone has them.

By all means I don't know everyones situations but I can't believe that everyone whose having their overdrafts cancelled are in positions such as sluggy1967.

Turkey_Machine

Lokolo wrote: »

Thats after rent and bills. To be quite honest I don't believe that you couldn't cut back on your outgoings and save. By all means you can say all you want but even on minimum wage with 2 of you, thats £20k. £10k on rent, £10 a year to spend on bills and food. Food of £150 a month is £2k. Bills of about the same, thats another £2k. Clothes £500. Car another £1k-£2k depends on what you drive and insurance. £100 TV licence, although not an essential. Do you have Sky or VM? Is that an 'essential' or a luxury?

Do you have a budget planner? Do you track everyday outgoings?

By all means I am not saying the banks are in the right here but I do believe there are other options available to the consumers which they haven't considered.

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the edited bit

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£190 between 2 of you is £85. I currently pay £35 myself (theres 5 of us, and adds upto just over £160 a month between us). Although we got our bill throught and owe a further £250 since September - opps!. We now only have the heating on from 7-9 in the morning

My £300-£400 includes bills, just not rent.

By all means I know children are expensive, we have all been one, but I am sure somewhere you could cut back.

Oh yeh and my expenses has gone up, shopping for myself costs around £100-£120 a month compared to £80-£90 6 months ago :-|

No it ain't, it's £95.

My current expenses are food, drink, phone credit, rent (once a term, but still a fair whack), travel and train tickets to interviews, and internet (VM), although that should be subsidised by Suffolk County Council as part of my Disabled Students Allowance. I have been paid the princely sum of £190 for a few days work I did during the Easter holidays, on top of the £100 I already got paid for other work I did in the same holiday. The balance of my overdraft currently stands at around £500, £450 short of its limit. I have to make that last as long as it takes me to get a regular job, which considering the amount of applications I fill in doesn't give me much return!

TV Licence by the way is further in the region of £150.

Lokolo

Turkey_Machine wrote: »

No it ain't, it's £95.

My current expenses are food, drink, phone credit, rent (once a term, but still a fair whack), travel and train tickets to interviews, and internet (VM), although that should be subsidised by Suffolk County Council as part of my Disabled Students Allowance. I have been paid the princely sum of £190 for a few days work I did during the Easter holidays, on top of the £100 I already got paid for other work I did in the same holiday. The balance of my overdraft currently stands at around £500, £450 short of its limit. I have to make that last as long as it takes me to get a regular job, which considering the amount of applications I fill in doesn't give me much return!

TV Licence by the way is further in the region of £150.

Bah my Maths exam isn't til next week

Have you tried getting a job at uni? Thats what I have and get paid £7.31 an hour for one, and £7.88 for another. Its pretty good.

I was lucky when it came for me trying to find a placement job, I only went to one interview and got that job, they paid me partial expenses but I can imagine a lot of people don't so it can get quite costly.

Do you keep a budget planner? What I tend to do is get an A4, half it, then half it again so I get 4 bits of paper, and write down what the expenses and income I am expecting, then work out where I could cut down (by time I've filled up one paper its all a mess so I then transfer everything onto next bit of paper), it helps me then I know how much I can spend in other areas. Like before Easter I didn't go out for 3 weeks because I had no money, but this week I've been out twice