MSE News: Anger over new Halifax overdraft fees

PhaedraUK

I don't, I'm afraid (bank £1k/month). I work for a budget chain, earn the minimum wage, never drive faster than 57 mph (lol), make good use of this site (among others), and jump through hoops to keep my head above water (I'm not complaining). Thirty pounds is a lot of money to me, and if I'd been earning it from the Halifax, I'd be pretty naffed off at having some of it swallowed up by charges. I think I'm really lucky to be able to move, and that's my Reward.

rb10 wrote: »

In those six months, you'd have made £30 in Rewards, enough to let you go overdrawn for a whole month, and your net payment for that would be £0.00. Unless you are keeping something quiet, it sounds like you are one of the people who will really benefit from this account (assuming you earn £1k/month).

jambosans

PhaedraUK wrote: »

I don't, I'm afraid (bank £1k/month)

If you actually read the thread, and the countless other replies on this matter, you would know that you don't need to bank £1000 per month. You simply need to have any credits totalling £1000 or more to gain the £5 net payment each month. For example, you could transfer the same £100 in and out ten times, and still qualify for the £5 Reward.

PhaedraUK

I suspect that what they are hoping for is that the overdraft will go on the card, albeit at a cheap rate, and the customer will run up another overdraft - perhaps, even because the original loan is so cheap. I'm not sure how I feel about this, since these companies are in the business of making money, and unfortunately they rely on weaknesses where cash is concerned. It's easy to say customers shouldn't do it - it's the customers fault - but it happens, and it's easy. One thing I am sure about is that they're not offering this out of the goodness of their hearts, because they are in the business of making money.

rb10 wrote: »

It's just for existing credit card holders. To me, it sounds like a 'win win' situation for the customers. They pay much less for their borrowing, and are guaranteed that Halifax won't just ask for the whole lot back at a moment's notice..

PhaedraUK

I have read the thread, up until a reply to my post, and shall continue with the remainder in a moment - thank you for your help.

I was in the Halifax yesterday, having these charges explained to me. I also asked for advice about how to avoid them - there was none, as my income isn't sufficient for the £5 Reward. I wasn't advised of the suggestion you made, but if it works, I thank you for it, and hope it lasts.

jambosans wrote: »

If you actually read the thread, and the countless other replies on this matter, you would know that you don't need to bank £1000 per month. You simply need to have any credits totalling £1000 or more to gain the £5 net payment each month. For example, you could transfer the same £100 in and out ten times, and still qualify for the £5 Reward.

atomicsheep

Are there any specific rules about the £5 reward?

I want to close all my halifax accounts ASAP but if the £1000 only has to be credited (and not remaining in the account for a set time period), then ill move my money to another bank - transfer £1000 on my payday to halifax then back again the following day.

A free £60 / year?? or will this not work?

can i do this with the 3 accounts I hold? i.e bounce my money across them 3 times and out again?

atomicsheep

A word of warning to those enquiring about the ultimate reward account where you have an agreed rate (or free) £300 overdraft. Im sure i read that you pay £12 / month for this privilidge
PLEASE CORRECT ME IF THIS IS WRONG AS I JUST READ IT FROM THE LETTER

opinions4u

atomicsheep wrote: »

A word of warning to those enquiring about the ultimate reward account where you have an agreed rate (or free) £300 overdraft. Im sure i read that you pay £12 / month for this privilidge
PLEASE CORRECT ME IF THIS IS WRONG AS I JUST READ IT FROM THE LETTER

The Ultimate Reward Current Account

- cost £12.50 a month = £150 a year
- reward for funding £1k a month = £60 a year
- worldwide family travel cover = £50 a year is my typical premium
- RAC Cover (decent, although doesn't cover you at home)
- Mobile phone cover
- Home Emergency Cover = £40 as a typical home insurance policy add on and is brilliant if you need a plumber or electrician etc in a crisis
- A few other bits too.

So if this is going to save you several £1 charges AND you can enjoy the other benefits it can work for you, potentially quite profitably.

If not, don't rule out switching elsewhere.

noh

atomicsheep wrote: »

Are there any specific rules about the £5 reward?

I want to close all my halifax accounts ASAP but if the £1000 only has to be credited (and not remaining in the account for a set time period), then ill move my money to another bank - transfer £1000 on my payday to halifax then back again the following day.

A free £60 / year?? or will this not work?

can i do this with the 3 accounts I hold? i.e bounce my money across them 3 times and out again?

Yep you can do that and it will work. There are many already doing so.
The money only needs to be credited no minimum time period required.
With faster payments the money can be in and out in seconds no need to wait till the next day.

PlugnPlay

opinions4u wrote: »

But losing customers with overdrafts would improve their balance sheet.

Been pondering the question as to why they are doing this. Do you think it is just a measure to make the figures look better?

Many posts here indicate that the people who will be hit hardest are folks who have relatively small overdrafts. People with overdrafts in the region of £2500 probably aren't going to be too bothered because they are probably paying about £30 per month anyway, so won't bother paying the debt down immediately.

It could be a measure to try and get some short term cash into the coffers and pay down some of their own debt to the Bank of England maybe? Are they due to make some sort of payment shortly?

It looks as if the net effect will be to loose those customers who have smaller overdrafts very quickly, but it still isn't making much sense to me because these are not free overdrafts -they are overdrafts on which 19% interest is being charged, which is more lucrative than the mortgages which have a much lower interest return. Is it about 5% svr at present? And some will be lower.

Then having a quick scoot round the board, many new customers are opening up the new reward account, and it seems some quick thinking can net quite a few rewards without them actually receiving the cash flow into the bank that they seem to have envisaged.

It seems to me like very poor forward planning and management. There's a few bodies about who have actual banking experience, and so I stand to be corrected, as these are just my own random thoughts, but this looks like a bank flailing around in a bit of a mess at the moment.

Of course I am stating the obvious there, but what I mean is I had hoped after all that's gone on that they would be getting a bit of a grip by now.

Extant

This is not "flailing around" nor is it a measure to try and get some short term cash - it's a move that's long been known about and has been easy to predict since charges reclaiming was put on hold, the commencement of the test case, etc.

Moves such as this take a lot of time, effort and resources to implement - it's not a simple move.