MSE News: HBOS 'High Interest' customers to earn zero interest

jambosans

cheggers wrote: »

its interest rate has just gone down the pan.

As I live in my overdraft

You've contradicted yourself, why would a higher credit interest rate benefit someone who "lives" in their overdraft?

Also, constantly being in an overdraft is not the way it should be used, although banks do allow this. You are in a perpetual cycle of debt, and that is a rather precarious position to be in considering overdrafts are repayable on demand.

You call it a "kick in the teeth", I call it a "kick up the backside" to get that debt repaid. Obviously I don't think Halifax are making this change to encourage customers out of debt, but I would suggest there is no bigger incentive than a greater cost financially for remaining in debt.

cheggers wrote: »

At least next time I go to the counter at the HBOS and they try and sell me some uncompetative financial products

You would be hard pressed to find another current account, or savings account for that matter, which gives a £5 net payment, just for funding the account with £1000 or more in a calender month. You don't even have to leave the money in the account, you could transfer the same £250 in and out four times, and still receive a Reward. It seems stupidly competitive.

Incidentally, closing your account and moving to another bank may be a short term resolution. Other banks may follow a similar structure, especially if bank charges are (eventually) deemed unfair. It's good business, cross-subsidise the free in credit banking model from another area - i.e. borrowers - and make a tidy wee profit to boot.

alibongo42

Technically I seem like the ideal candidate to swap to a Reward Account, as I'm never in my overdraft, and pretty much empty my account each month, until the next salary goes in.

However, it's preying on my mind that when organisations get rid of an old system/product by giving you the choice to move to a "better" one, there is usually a reason why it's in their best interests and not yours.

Can't actually see a catch here, as £5 a month sounds like a no brainer. I'm just sure that somewhere along the line I would end up wishing I hadn't changed over. Am I being too suspicious?

rb10

alibongo42 wrote: »

Technically I seem like the ideal candidate to swap to a Reward Account, as I'm never in my overdraft, and pretty much empty my account each month, until the next salary goes in.

However, it's preying on my mind that when organisations get rid of an old system/product by giving you the choice to move to a "better" one, there is usually a reason why it's in their best interests and not yours.

Can't actually see a catch here, as £5 a month sounds like a no brainer. I'm just sure that somewhere along the line I would end up wishing I hadn't changed over. Am I being too suspicious?

Yes, you are being too suspicious.

If you don't change, then you will be on 'Current Account', which is exactly the same as the Reward account, but without the £5 reward.

For those of us who stay in credit, and do not go overdrawn, this is a very good account. You will earn far more from this new account than you now get on the High Interest account.

JimmyTheWig

opinions4u wrote: »

if you only go overdrawn by nominal amounts for short periods of time then you probably do so through laziness. I'm not intending to be rude

Yes, that's hit the nail on the head for me. I know its laziness and I'm not offended by you saying it.
I think for now I'll take the £100 from First Direct and carry on being lazy.
(Once the switch is done I may as well convert my account to a reward account and put £1000 through it each month for the bonus fiver.)

LBG_worker

Dam it - I have a reward account and a high interest current account which I kept open for its in credit interest rate! (and because when the reward account was created they stopped the high interest account). I don't ever use my overdraft so these changes are most irritating Grrr!!!!

opinions4u

LBG_worker wrote: »

Dam it - I have a reward account and a high interest current account which I kept open for its in credit interest rate! (and because when the reward account was created they stopped the high interest account). I don't ever use my overdraft so these changes are most irritating Grrr!!!!

Change your HICA to a Reward account before 31st October then.

Oldangrumpy

:rolleyes: Called into the bank today & changed our account. Whilst with the 'financial advisor' I queried a new payment into the account. Guess what, it was money from a cash back site. The advisor had never heard of such things & knew nothing about this site. I suggested that as some one working in money perhaps she should log on & find out.
She did thank me for my advice!!!!!!!!!!!!!!!!!!!!

blued

Worth noting to anyone thinking of changing from Halifax to Alliance & Leicester that if you go through Quidco you will get £45 on top of the £100 A&L give you to switch to them. It would take 29 months to get this from the Halifax reward account supposing they dnt stop the £5 reward and you stay in credit! A&L are 05 on your overdraft for the first year and thereafter charge £0.50 per day with £5 max per month for being overdrawn.

I really can see Halifax losing a significant amount of customers with this change!

CharlieBilly

Time to switch banks I been a customer of there's for over 30 years.

I haven't got a letter yet

noh

blued wrote: »

Worth noting to anyone thinking of changing from Halifax to Alliance & Leicester that if you go through Quidco you will get £45 on top of the £100 A&L give you to switch to them. It would take 29 months to get this from the Halifax reward account supposing they dnt stop the £5 reward and you stay in credit! A&L charge £0.50 per day with £5 max per month for being overdrawn.

I really can see Halifax losing a significant amount of customers with this change!

The A+L overdraft is fee free in the first year if you switch to them.
Best thing to do is get 3 Halifax Reward Current accounts opened set up one DD on one of them switch (but don't close) that one to A+L via quidco also open an online saver at A+L for a further £20 from quidco.
You will then get £100 from A+L £65 from quidco. Credit £1000 to each reward account each month by cycling money between them and collect £180 in rewards for the year.

A total of £345 which can go towards eliminating your current overdraft amount after the year is up.