hsbc end of interest free overdraft

domesticgoddess789

I was under the impression that the interest-free part of my overdraft would be reduced every year until it reached £0. Last yr it was reduced by £500 to £1000.

I have just received a letter saying that my account is being transfered to a Current Account Advanced and that my interest free overdraft entitlement is coming to an end on July 19th! I am currently £1000 overdrawn and panicking because I really did think I had more time to pay this off before the interest-free period ended.

Has anyone else been caught out by the problem and is there anything I can do?

Please advise.

sansini

Hi Hayley, I am also in the same scenario as you - £1000 into the graduate overdraft and HSBC saying it ends July 19th.
I think I may go into my local branch on Monday and ask them what they suggest would be the best way out - they may be able to do a loan on a lower interest than 19.9% or a similar solution.

Norton_Blade

You should have received a letter last year saying that they had reviewed your overdraft and chosen to give you another year of it, but it will be "reviewed" in July this year. I took this as the overdraft was going to be removed and paid it all off.

I think the loan to pay it off might be your only option. Banks can call overdraft debts in any time they feel like it.

agsnu

Surely you would have at least expected it to decrease to £500?

NatWest will give you a £500 overdraft in year 3.

hibt.tse

I also received this today.

Not impressed - its not that I dont have the £1500, fortunately I do, but this money was going to clear off other debts with higher % first.

The fact of the matter is that when I became a student back in 2002/2003, the student bank account was "sold" to me with the maximum £1500 overdraft, which, as described by Hayley is reduced by £500 each year. Took a long time being a student (!) and last year, the interest free portion went down £500, which was fine.

Surely they cannot just move the goalposts like this? I am sure there are many people in far worse situations than me for whom this is a serious problem - for me I guess its an inconvenience and a principle thing.

Is it worth writing a complaint to them? Some battles are worth fighting - others arent.

Grateful for advice!

Tim.

agsnu

In fairness, they tried to remove all interest-free graduate overdrafts a few years back:

http://www.timesonline.co.uk/tol/money/borrowing/article1963602.ece

They can legally do this, but due to the uproar they were forced to backpedal. Overdrafts are repayable on demand - they can give you notice at any point and demand that you repay it immediately. What it sounds like is happening here though is that they are moving you to an account which has an interest-bearing overdraft, which means that you don't have to pay it back immediately but you will be charged interest.

If you don't like what HSBC are doing, move your banking elsewhere. NatWest give you £2000 in the 1st year after you graduate, £1000 in 2nd year, and £500 in 3rd year.

hebangsthedrums

Just got back from hols to the same letter. Not happy as I feel they are trying to pull a fast one, again.

One of the boons of the account was that the interest free OD would be reduced by £500 each year and now they seem to disregard that in line with some 'review' procedure. I'd love to know how many graduate account holders got what they were actually promised :rolleyes:.

I'll speak to them on Monday/Tuesday and no doubt get nowhere, but if people could advise how they get on with any queries would be great - we should in theory all get the same response.

hibt.tse

I spoke with telephone banking today and got nowhere other than the standard address for complaints.

Would be interested to see how others get on

Jess81_2

I have also got this letter, and should have 1 year left! Luckily i am not overdrawn but like many use the interest free OD to put money in higher interest accounts.

I also am appalled at the notice they have given and the fact they are trying to sell us bank account advance - which reading the info has no benefits for staying. You would think that being a customer since the age of 16 (now 27) they would show more loyality.

It is an inconvience for me more than an issue, but now have to scan through the millions of accounts for a good deal.

SparciaM

Loyalty means nothing nowadays.

Jess81, are you a mature student? As you're lucky to have a student/graduate account at 27 most stop around 23 ish (if you do a masters).

Like other people have said, if you don't like what HSBC are doing then switch to someone else.

You can switch your Graduate account to another one elsewhere. Banks love students/graduates as they get them in the door and then sell to them from an early age hoping they'll stay with them.

if you have proof in your T&Cs on the account that your OD was reducing £500 per year every year then challenge them on it.
My student account with HSBC didn't reduce by £500 per year, but the interest free portion of it. So year 1 of graduation I have £1500 OD (£1000 Interest free), year 2 = £1500 OD (£500 Interest free), year 3 - £1500 OD (£0 Interest free), hence why I paid it off every year not to incur any charges.
I actually moved it to a 0% cc at the end as that was easier

insurgente

i'm in the same situation... I'm not actually in my overdraft either, but as i'm planning to move soon I was banking on that 500 quid interest free to 'lean on' for a deposit whilst I got myself together. oh well

i'm sure when I graduated in 2007 they said the interest free portion would go down gradually over 3 years....thing is i'm so disorganised I couldn't prove it. I probably had it wrong .

what other banks besides Natwest offer a third year with an interest free overdraft?

i'm crap at maths...can anyone explain how much 19.9% interest works out to on say being 500 or 1000 quid overdrawn? I'm wondering if it's better or worse than the 50p per day Alliance and Leicester charge