Overdraft loophole / stoozing?

pault123

Ive gone overdrawn by £1000 (my OD limit is £1200) in my HSBC account, I think I get charged interest if its not cleared in a month, or it may be per day can someone clarify?

Would it work to use my overdraft from another account to clear this overdraft then a few weeks later transfer the money back to clear that overdraft?

and keep doing once a month, my idea being to never have to pay interest on it and slowly pay it off bit by bit, or even use it for stoozing?


Thanks for advice and input!

Paul

Bokken_2

I think you'll have to have a look at the terms and conditions of your account and the allocation of interest to your overdraft.
Most banks allow a free overdraft upto a point ie.£250 after that you are charged a fee to the next level ie.£500 /£750/£1000 and then there is normally a upper level for any overdraft over their upper level.ie. £1000/£1200 or what has been agreed with your bank.
nice try but you would still incur interest charges on the days between the money being electronically transfering between account even if this was 4-8 days a month it is still a charge.
If on the other hand the overdraft was at 0% in the first place like the A&L overdraft you could stooz the OD into a 5% saving account for the term of the OD.Unfortunately A&L have been very tight with their OD limits.
Get a 0% credit card that allows you to SBT Super Balance Transfer to you bank account pay off the OD and then just move the balance from one 0% card to another until it is cleared.

grumbler

Bokken wrote:

...Most banks allow a free overdraft ...

AFAIK most banks don't allow a free overdraft. Agreed overdraft is usually fee-free, but not interest-free.

pault123 wrote:

Would it work to use my overdraft from another account to clear this overdraft then a few weeks later transfer the money back to clear that overdraft?

and keep doing once a month, my idea being to never have to pay interest on it and slowly pay it off bit by bit, or even use it for stoozing?

No, this wouldnt't work. Interest on overdraft is charged from the first day you are overdrawn. You will only lose because during a transfer both your accounts will be overdrawn. However, overdraft rates vary from bank to bank. It is worth swithching it to the account where interest rate is lower.

pault123

Thanks for the advice! Didnt' think it would be so easy, explains why I didnt see any Overdraft stoozing posts!!

Do you happen to know if i'd be better off leaving the overdraft £1000 over and paying overdraft interest or putting it onto my HSBC CC which offer 2.3% at the mo with a 2% transfer fee.

£20 fee, would £1.92 sound right for the interest charge per month at a 2.3% apr per annum on £1000?

Adding the £20 fee over 12 months would work out £3.59 per month on the CC option.

Could do with knowing the overdraft interest to do a comparison and if someone could confirm my figures

Thanks Paul

grumbler

pault123 wrote:

Do you happen to know if i'd be better off leaving the overdraft £1000 over and paying overdraft interest or putting it onto my HSBC CC which offer 2.3% at the mo with a 2% transfer fee.

AFAIK HSBC overdraft rate is 12%+. I think this is a good offer if you cannot repay this amount during 2-3 months. Are you sure that they will transfer your overdraft balance to your CC? How long 2.3% will last?

pault123

2.3% for 6 months just checked. 12% is outrageous!! is that per annum?

grumbler

Yes, APR. See Interest rates .

Not the highest rate among all bank though ...