Halifax/ Bank of Scotland: a guide to account changes.

rb10

yxes wrote: »

I would have to say I completely disagree with this change in overdraft fees. I am a very irregular user of the £100 overdraft facilitity on my halifax account and therefore incur no charges mostly, but if I spend £1 in overdraft for 31 days, that is a fee of £31 (an extreme, but possible). A horrendous equivilant interest rate. I have checked against my natwest current account where I pay no fees and have a large overdraft available where I spent (previously) an entire month in overdraft between -£300 and -£1700 and was charged less than £20. This was two years ago with a interest rate most likely higher than the current ones.

I personally think this is their way of clawing back the loss of 'income' gained from unfair and excessive unauthorised overdraft fees. I will definitely be closing this account asap and returning to natwest.

Your post does not make sense. You say that you are a 'very irregular user' of your overdraft. This implies that you would not be impacted much by the changes. But you are prepared to forfeit the £5 reward and go to Natwest??

And if you were overdrawn by £1 for 31 days (although there's no excuse for that with internet banking), you would actually pay £0.00 in overdraft fees, and, overall for the month, be £5 better off than if you were with Natwest. They discount the first £10 of your overdraft.

opinions4u

yxes wrote: »

I would have to say I completely disagree with this change in overdraft fees.

Even though they are completely avoidable? Ok.

I am a very irregular user of the £100 overdraft facilitity on my halifax account and therefore incur no charges mostly, but if I spend £1 in overdraft for 31 days, that is a fee of £31 (an extreme, but possible).

Stay in credit then and earn a fiver. I'm sorry, but you'd have to be bloody negligent to pay £31 in charges for a £1 overdraft. You'd also eventually lose your overdraft facility anyway because you wouldn't be funding your account.

A horrendous equivilant interest rate. I have checked against my natwest current account where I pay no fees and have a large overdraft available where I spent (previously) an entire month in overdraft between -£300 and -£1700 and was charged less than £20.

So over a year, where you're overdrawn for a month, you'd be £20 down at Nat West. At Halifax you'd be £30 up with a funded Reward account. Which is better?

This was two years ago with a interest rate most likely higher than the current ones.

Speaking generally, banks have increased overdraft rates in the last couple of years.

I personally think this is their way of clawing back the loss of 'income' gained from unfair and excessive unauthorised overdraft fees.

When the Reward account was initially conceived it was believed to be 'cost neutral'. A change in charging structures that wouldn't increase income.

I will definitely be closing this account asap and returning to natwest.

This is always your choice. But if you really can't work out how to make the Reward option profitable based on the circumstances you've explained above then you really are going to struggle.

Nathan_Spleen

opinions4u wrote: »

This is always your choice. But if you really can't work out how to make the Reward option profitable based on the circumstances you've explained above then you really are going to struggle.

But this is just the point isn't it?

If the changes to the general running and charges of these accounts were clear and easily understandable, then surely Jambosans wouldn't have felt the need start this ''Guide to account changes''. It's ludicrously and unnecessarily complicated.

WRabbit

I use my current account as exactly that - an account to meet current expenditure. As a result I transfer my excess funds out to savings accounts early in the month, leaving enough to cover anticipated expenditure.

However some months there's slightly higher than anticipated spending, or my pay goes in a couple of days later. So maybe 4 months out of the year I dip into my overdraft. I've an arranged overdraft of £1000, and I would use at the most £150, sometimes much less. The overdraft give me the cushion so that I don't need to micromanage my current account.

So on the 20th of the month I go overdrawn by under £100 - I'm now looking at £11 worth of fees, instead of the under £1ish I would have had previously. Also my savings accounts are with other banks so none of them offer the ability to do an instant transfer to the BofS. OK this is offset by the £5 reward. However as I say my salary is sometimes 'late' - eg Paid in on the 2 August for July, the 30 August for August and the 2 October for September - therefore no reward of £5 for September.

Despite page 13 of the booklet saying:
For example, if you use a small overdraft for a large number of days each month, you may end up paying more than you did in the past. If this is something you do regularly, you may want to consider changing to a different type of account with us.

There is no 'different type of account' unless you're a full time student.

I also object to the lack of cap on these fees.

OK - it's my fault for going overdrawn, but this enforced change by Bofs means a radical shift in the way I would have to manage my finances.

blued

I'm similar to WRabbit.

I find these changes extremely negative from a bank which has provided great service to me for about 13 years. I have a high interest current account and a websaver. When I get paid I move my wages that cover bills into another current account and the remainder into the websaver. Then weekly I put disposable income into the current account. Sounds a strange way to do things but its the best way I can budget and save. Obviously sometimes I spend more than the budget and have to transfer money in to cover this. Now unless I log in on the day I over spend (which wont always be possible) I'm going to be charged £1 each day until I manage to log in. Up until now the monthly interest debited has amounted to pennies. The £5 credit will give me 5 free days I suppose but even then I still risk paying much more in charges (albeit small charges but thats not the point) than ever before.

I understand people who regularly get overdrawn past their overdraft will save money but why should people who can manage their money properly be penalised??

Time to look for another current account I think!

sheep1903

This is not good news for me !!

I have an overdraft of £3800, and I pay in around £2500 per month, so I am never out of my overdraft. So I will be paying £2 per day for the whole month !!!

I think my usual charge is around £40ish per month. So I'll be paying around £20 per month more than before.

I can't really afford to pay off any of the overdraft just now either.

Not sure if any of the other accounts will be better suited for me.

apt

The way blued and WRabbit are running your accounts does not make sense and is not 'manag[ing] ... money properly'. Unless you have a current account which offers an overdraft which is both fee free and interest free you should not go overdrawn on your current account if at the same time you have money in easy access savings account earning a low rate of interest. Even under the current charges you would pay over 15% interest on an approved overdraft on the Halifax 'High Interest' current account. You will only be getting a fraction of that interest rate on your savings.

blued

apt

Like I said it is a strange way to do things! I rarely use my overdraft and when I do it isn't for very much or very long. To give you an idea of the interest I get charged last month interest debited was £0.18 and credited was £0.06 so hardly worth worrying about. I could have changed to a bank with interest free overdraft but Halifax has always had good customer service and the online banking is excellent so I see paying less than 20p per month in interest decent value! What is left at the end of the month in the websaver gets transferred to my ISA (with another bank).

I still feel this is good money management

I've now found that First Direct offer a £250 interest free overdraft and will also give me £100 to switch to them and pay in my salary. I dont really want to switch but I feel Halifax aren't leaving me with any option by introducing these charges.

JD642

I have a quick question. My partner has a current account at Halifax, not a high interest one just the normal one, sorry i forget what its official name is. He only has the £100 overdraft which I think is interest free but im not sure if this is the case when the new charges come in? Do you start paying £1 per day as soon as you are more than £10 od or does this first £100 rule still apply?

He doesnt always earn £1000 a month so wouldnt qualify for the £5 reward which might have cancelled out any charges that he did get. So if he does have to start paying these charges it might be best if he moves his bank elsewhere?

WRabbit

apt wrote: »

The way blued and WRabbit are running your accounts does not make sense and is not 'manag[ing] ... money properly'. Unless you have a current account which offers an overdraft which is both fee free and interest free you should not go overdrawn on your current account if at the same time you have money in easy access savings account earning a low rate of interest. Even under the current charges you would pay over 15% interest on an approved overdraft on the Halifax 'High Interest' current account. You will only be getting a fraction of that interest rate on your savings.

For me it's about the balance between the fees/interest and convenience. At the moment I would pay circa £1 in interest for going overdrawn at the relatively small level I do 10 days from the end of the month. I pay that penalty willingly as it offsets the convenience of not having to check my current account daily, and allowing me to increase my savings by keeping my current account as low as possible. Yes I could avoid it by transferring money from a savings account. However that transaction could take up to 5 days to happen depending on how a weekend falls. AFAIK the faster payment scheme rarely applies from savings accounts - so I would need to maintain a savings account with BofS to allow for an instant transfer.

Under the new scheme the balance has shifted. Under the same scenario I pay £10 in fees (offset by £5 in rewards - if my salary dates work out ok).

There's now a greater incentive to avoid the overdraft, but that is at the cost of convenience.

Like blued I have a system that works for me, that encourages me to save and keep a track of my finances. Yes I could have shifted my current account to an interest free/fee free account sooner but as a customer of 14 years there was an element of inertia involved - £4 a year in debit interest vs changing a long standing current account. This change has overcome that inertia.

I'll sit down over the weekend with my statements and a spreadsheet to see exactly how the reward account would benefit/disadvantage me. However in all liklihood I'll be moving to pastures new. However I'll possibly keep the Reward account open and use it to gain the fiver!