Halifax £1 per day charge for using authorised overdraft? Will others follow?

Mince_Pie

Think I'll be switching to the Reward Account - better to pay £25 a month than £30 I suppose - Yep, I have an overdraft and am currently living in it - Unexpected car troubles causing £1100 worth of work to it resulting in a few months later paying £20-£30 a month in interest.

Funny thing is, I traded in my old car coz it needed a new clutch and was gonna cost me £400 for everything it needed.... That was in March... Then in July £1100 for the newer car - whoopsie....

Oh well, thanks very much everyone in this thread for their advice - took me 2 days to read through it all, but it has helped me and is appreciated - don't think I can switch accounts and get 0% on the O/D from A&L due to the post about "prove x number of days in credit"

But hey ho, c'est la vie and yes, my own fault for not managing my finances properly to get into this situation (), plus a new child arriving and a wedding and car troubles etc etc...

But thanks to the wonderful world of cashback that £20-£30 a month charge is nothing as I'll be earning more than that per month in cashback from various places - it just used to go to my spending fund, now it'll go to charges

I highly recommend anyone else in this same situation to look into cashback sites and recoup some of those charges (if you aren't already doing it...) In the end, we can all moan about paying £30 a month, or earn £50 a month and be £20 up - :thumbsup:

Thanks again everyone!

tankie

listening to all said, what effect does it have on your credit rating when switching banks???

I now have a pristine credit rating 5 yrs down the road, I have savings, but I just had a run in with Halifax not 5 months ago, when i was out of the county and they charged me for being overdrawn £30.

I had to go into a branch to reinstate my account and they refused to pay it all back, (got £20 out of them)

So i think after 15 yrs i will be changing banks!

chickadee

opinions4u wrote: »

You saw an increased recommended limit and requested it. I'd hazard a wild guess that they didn't increase your overdraft limit unilaterally.

Actually they did exactly that to me as well. I have a joint account with my husband and in September we got a letter like this:

Overdraft renewalI am writing to tell you that from 16th September 2009 your overdraft limit will be £1,150.00 . If you want to change this overdraft limit because your circumstances have changed, we will be happy to review it at any time. We can usually give you an instant decision.This overdraft is provided on the condition that you pay your salary or other regular payment into your account.The interest rates that apply to your overdraft are shown in the table below.

Neither of us requested the overdraft to be changed, it was done unilaterally. In the table, there were listed the interest rates applicable at the time. No part of the email mentioned the future change to the charging structure and our previous overdraft was £400.

I don't know why this thread has become so confrontational. Former bank managers (and even present bank managers for all I know) seem to be desperate to defend the actions of banks, when as we all know their recent actions are indefensible.

I don't believe that their actions in changing bank charges are purely to do with unfair bank charges being recovered. More to do with the fact that they need somehow to start recouping the losses they are now making through having made imprudent investments on a grand scale.

opinions4u

chickadee wrote: »

Actually they did exactly that to me as well. I have a joint account with my husband and in September we got a letter like this:

Overdraft renewalI am writing to tell you that from 16th September 2009 your overdraft limit will be £1,150.00 . If you want to change this overdraft limit because your circumstances have changed, we will be happy to review it at any time. We can usually give you an instant decision.This overdraft is provided on the condition that you pay your salary or other regular payment into your account.The interest rates that apply to your overdraft are shown in the table below.

If I got it wrong, my apologies.

I don't know why this thread has become so confrontational. Former bank managers (and even present bank managers for all I know) seem to be desperate to defend the actions of banks, when as we all know their recent actions are indefensible.

Many of my posts have been about taking a step back to work out how you can benefit from the changes. Some of my posts have suggested moving banks if you are worse off from the changes and can't make the necessary adjustments needed to benefit.

Defending them? I do defend the right of any business to charge for their services. Equally I defend the consumer's right to go elsewhere if the price and service don't meet their requirements.

I don't believe that their actions in changing bank charges are purely to do with unfair bank charges being recovered.

I do know that the charging model, when conceived, was cost neutral. In other words Halifax would make no additional profits from their customers by introducing it. Whether or not that is still the case I don't know. But the model hasn't changed - maybe the cost/income realities have, but I genuinely wouldn't know.

You don't have to take my word for that, I'm just a bloke posting something on a message board. But if they aren't getting there £28 and £35 charges and choosing to pay out the fivers then there's a hell of a lot of income lost. The £1/£2/£5 fees won't make them a significant amount over and above the charges that have gone.

jambosans

chickadee wrote: »

I don't believe that their actions in changing bank charges are purely to do with unfair bank charges being recovered. More to do with the fact that they need somehow to start recouping the losses they are now making through having made imprudent investments on a grand scale.

Changes like these are not conceived within the space of a year. Considering the Reward Current Account (which currently has this fee structure) was launched in February, suggests these changes have been in planning for at least a year previous. So I disagree with that argument, purely down to the timescales - i.e. HBOS's near collapse was too recent.

tankie

tankie wrote: »

listening to all said, what effect does it have on your credit rating when switching banks???

I now have a pristine credit rating 5 yrs down the road, I have savings, but I just had a run in with Halifax not 5 months ago, when i was out of the county and they charged me for being overdrawn £30.

I had to go into a branch to reinstate my account and they refused to pay it all back, (got £20 out of them)

So i think after 15 yrs i will be changing banks!

can anyone answer the question please????

comedykev

as a new user I cant post links but there is a petition on

http:

//petitions.

number10.gov.uk

/halifaxcharges/

comedykev

obviously you have to remove the gaps

YorkshireBoy

tankie wrote: »

can anyone answer the question please????

Your credit rating will be negatively affected, if that's the only current account you've got/had over recent years.

The reason?..."time with bank" is a key stability criterion in credit scoring for credit-based products, ie credit cards, loans, mortgages, and even buy-now-pay-later schemes at Comet, Currys, DFS et al.

kriss_boy

The problem is life throws all sorts at you and overdrafts act as short term loans.

You may dip into it for a few days if your runing low before payday or even a few months if your car packs in. Historically AERs on overdrafts are affordable enough that these finanical curb balls can be absorbed.

The standard £1 per day the Halifax have introduced is appalling however.

Sure, increase the AER on the overdraft in an attempt to tempt the worst offenders out of the red but to punish everyone in this manner is wholly unjust.

I choose to live in my overdraft for my own reasons and luckily I can move out of it before these fees are enforced but there after what incentive is there to stick around?

To face a £7 fee for being overdrawn for a week before payday because you have an expensive month and go £10 in the red...

...I dont think so.