Changes to Overdraft fees

Jafnaste

Dear all

Apologies if this has been posted before but I heard from an acquaintance that all banks in the UK are going to follow Halifax's model of charging overdraft fees i.e. £1 for everyday you are in you're overdraft even if it is within your agreed overdraft limit!

I currently have overdraft facilities with both Lloyds TSB and Barclays (I have refused to upgrade my accounts and have the bog standard current accounts for both Lloyds TSB and Barclays).

I practically live in my Loyds TSB overdraft to pay the ever increasing cost of the bills (seeing as how every corporate tom, !!!!!! and harry has decided to screw the British public in the height of a recession!) after the government has robbed me of a fair whack of my earnings!

Anyway I wanted to enquire whether the above is true or not? Will Lloyds TSB and Barclays follow the the same model as Halifax in terms of charging fees?

Thanks

CLAPTON

It's better to start budgeting properly and stop being in your OD everry month

littlewren

CLAPTON wrote: »

It's better to start budgeting properly and stop being in your OD everry month

That was not a constructive 'answer' at all and totally uncalled for. The OP is only worrying about what I and many other people are worred about and he/she deserved a decent answer.

In an ideal world and without large bills to worry about on a regular basis, none of us would have overdrafts!

John_Miller49

Today I recieved mail from the Halifax stateing that from December 6th the following changes to there overdraft facility will take place.
For arranged Overdrafts up to £2,500 they will charge £1 a day
For arranged Overdrafts over £2,500 they will charge £2 a day
For the use of a unarranged overdraft they will charge £5 a day

This, in my opinion, is a evil switch to make Bonus Money for the boss, at a time of deep Recession / Depression / Job losses, when people depened on there overdraft for survival, Halifax will charge you up to £30 / £60 / £150 Per MONTH.
I bet the Halifax start handing out overdrafts on a plate before too long, so beware out there because dispite banks being the cause of what we are now all going through, they want to make the life of the Poor & Stuggling even worse. :rotfl:

TMoose

And on the flip-side...

1) your maths is incorrect - It should be £30/£60/£150.
2) This can also be offset against the £5 "reward" for paying at least 1K pm in, which cuts it to £25pm/£55pm.
3) A 5K arranged O/D previosly would have cost 2.13% pm - which with an average OD balance of £2500 would have cost £53.25.

So overall the cost is not hugely greater.

As for unarranged overdraft... well I'm not going to get into the "manage your own finances properly" discussion.

As for paying the bonus for the boss - it's more likely to pay all the "unfair charges" claims that people have put in!

littlewren

TMoose wrote: »

And on the flip-side...

1) your maths is incorrect - It should be £30/£60/£150.
2) This can also be offset against the £5 "reward" for paying at least 1K pm in, which cuts it to £25pm/£55pm.
3) A 5K arranged O/D previosly would have cost 2.13% pm - which with an average OD balance of £2500 would have cost £53.25.

So overall the cost is not hugely greater.

As for unarranged overdraft... well I'm not going to get into the "manage your own finances properly" discussion.

As for paying the bonus for the boss - it's more likely to pay all the "unfair charges" claims that people have put in!

It is totally unfair and unacceptable for the average person.

I receive maintenance from my ex husband and it doesn't reach the £1000 mark so I cannot take advantage of the £5 reward account. (Even if I was able to, whoopedy doo, £5 off the £30 fee!)

I have a £700 overdraft, although I am overdrawn by approximately £450 each month because I can't manage otherwise, having had to take out the overdraft to pay for 2 house surveys for a move which eventually fell through anyway. I am now unable to pay this back in one lump sum, so it is only going down a little each month and because there is no incentive to try and get it down further now, I may as well leave it as it is! And this means that £30 will be taken out of my maintenance each month, which will leave me even worse off.

The majority of people I have spoken to have similar overdrafts, not the ridiculously high one of 5k, mentioned in your post.

So people with very very large overdrafts may be better off, but not us lesser mortals with smaller overdrafts.

It's disgusting.

jamesd

It doesn't need to be a lump sum of £1,000, you can meet the target just by moving money to and from Halifax accounts.

Until the end of this month people can open three reserve accounts. Then you set up standing orders to move £250 into and out of each four times during the month and collect £15 for your trouble every month.

If your finances are as tight as they seem to be you might want to investigate an opportunity to make £180 a year with almost no ongoing work.

You might also want to consider use of a 0% for purchases credit card or even a credit card that charges interest. For your comparatively low amount of money needed the interest on that would be cheaper than paying Halifax the overdraft fee.

jen_a_c

I posted about the very same a week or so ago on the DFW board.

It's disgusting - surely the fairest way to charge is proportional to the usage? It doesn't seem right that somebody using their overdraft by a couple of hundred is charged the same as someone £2500 overdrawn.

Seems like good customers are paying for those who abuse accounts and regularly exceed limits.

CLAPTON

littlewren wrote: »

That was not a constructive 'answer' at all and totally uncalled for. The OP is only worrying about what I and many other people are worred about and he/she deserved a decent answer.

In an ideal world and without large bills to worry about on a regular basis, none of us would have overdrafts!

I respect that you have a different view .

However the simple maths is this

If you use your OD regularly then you pay interest and/or fees.
It therefore follows that over a period of time you have LESS money to spend on your essential requirements and NOT MORE.

So regular use of a OD is sensible only for RICH people and not for people struggling.

Very sadly many people seem to think that poor people need to borrow.

Clearly a complete and utter nonsense... they can't afford it.
People used to know this about 20 years ago but unfortunately a new fashion of debt seems to have developed in the 90s and especially during the last 10 years.

Big bills, christmas, birthdays, car bills, washing m/c breakdowns, tiles off roofs etc and totally predicable occurances... so you SAVE for these things and spend only what you have saved.

Like credit cards, OD are somethings useful for very short term borrowings.. i.e one or two months... no more.

So I'm afraid I see your view as whole negative and encouraging totally bad habits.

Try reading the debt free wannabe boards for the inevitable consequences of your views.

The advice is simple

save for things you need, mortgages excepted.
Occasional borrowings for a month or two for very short term cash flow problems then OD or CC is maybe acceptable

However if you have regular big bills on a regular basis then borrowing is NOT the solution but will ineveitable make your situation worse.

I would suggest you go over to the debt free wannabe board and post up your budget (SOA ) and receive a little advice about managing your finances better
a good format is http://www.makesenseofcards.com/soacalc.html

I wish you well and hope you become debt free soon.

John_Miller49

Its Obvious Clapton either works for the bank or should apply to, as he fails to understand so many people are stuggling to survive / pay there bills or Mortgage, even keep there homes, through loss of jobs . The Halifax are taking advantage of the poor to pay the already rich .... yet again

PaulJM

Got the same letter today - after 20 years with the halifax. I'm totally disgusted. Yes, it's true, you shouldn't be in your overdraft - and yes, everyone here will admit that it's inefficient; but when you're juggling a massively busy life, it just happens. It shouldn't, but it does.
And yes - it's massivily more expensive for me- I've been in this OD about £300-£400 for maybe 20 days a month. My average charge is £3.50 ish. This will make it £20.
You know the worse thing? It's been touched on above - 2 MONTHS AGO, MY OD WAS INCREASED TO £1500 BY THE HALIFAX WITHOUT ME ASKING! I got a letter to 'congratulate' me for this. That, in my veiw, is bloody disgusting. I did the above in CAPS because I've only just remembered that!!!!!!!!! grrrrr.