MSE News: Anger over new Halifax overdraft fees

Rafter

It seems to me that there needs to be a law that if charging structures or interest rates are changed so dramatically that your costs can go from £5 per month to £90 per month a customer is given an alternative to convert the existing overdraft into a repayment loan at no higher an interest rate than the overdraft was at and the overdraft facility is removed.

This option is already available if your interest rate is hiked on a credit card, and this should be no different.

R.

YorkshireBoy

Rafter wrote: »

...customer is given an alternative to convert the existing overdraft into a repayment loan at no higher an interest rate than the overdraft was at and the overdraft facility is removed.

Apparently Halifax are offering this option to their customers in the form of a credit card transfer (the stoozing SBT).

They'll then pay a typical rate of 15.9% APR (O/Ds were previously 15.9-18.9% EAR), but more importantly will be forced to pay it down (albeit very slowly!) at 1% per month via the minimum payments.

blahblahdoh

Gordon_the_Moron wrote: »

Move to Alliance and Leicester, no overdrafts fees for the first year then 50p per day but with a £5 monthly cap. If you do need to use these overdrafts one thing to remember, use as much of them as you can, for example you have a £2500 overdraft and need to borrow £300 for a month, put the rest of the overdraft (excluding what is required to covers fees, direct debits and standing orders and possibly leaving space for cash withdrawals) into a top paying savings account, that will offset some of the charges you pay and not cost you any more.

I inadvertently went £10 into the red with A&L for a few days due to a very late presented cheque. On my monthly statement, two £25 charges had been applied. I went straight to my branch to "suggest this was inappropriate" :rotfl:.
They said they had no authority to do anything about it, and, by the way, in the time it had taken for the statement to arrive, two more £25 charges had been applied, plus interest. When I asked them how much interest was due, they couldn't work it out. They called head office who also could not calculate it. They chirpily advised me to pay more than was due in order to avoid further escalating charges. Felt like I was trapped in a Kafka novel- had to give them over £100. I have written several letters to them, all of which have resulted in a standard reply about the ongoing 'bank charges' court case. They still have the money over a year later and there appears to be nothing I can do about it. I don't object to paying a small fee for my error in not keeping track of a two-month old cheque, but surely some common sense and common decency should apply? Apparently not.

On the subject of the article, Halifax: why make a sudden drastic change. Surely it is in their own interests to treat their customers fairly and reasonably? Many of the policy makers in the banking industry continue to be, well ...
out-of-touch, greedy and stupid.

plumbtony

:mad: My first reaction after the shock is, are these charges punitive? I have used a £450 overdraft for years now it would incur charges of £30.00 a month. Just what sort of interest is that even if I used the whole overdraft? It simply means I will have to do without this facility which I expect is what the bank wants!

jimshorts72

I used to typically go a few pounds over drawn for 4 or 5 days before pay day and pay 20-30p in interest.

I appreciate that the Halifax is doing this to simplify banking for me. To simplify things for the Halifax, I've decided to close all of the accounts that I hold with the Halifax and do my banking elsewhere.

Lokolo

craigf136 wrote: »

No you don't. You haven't taken Tax & Vat into consideration on the 12k salary, it would work out to approx £700/800 a month income. To Get £1000 into the account every month would be a salary of approx £15500.

As everyone is being REALLLLY pedantic about my response, just to point out, its not £15,500, its a bit less than £15k.

£15k = £1028 take home.

noh

Lokolo wrote: »

As everyone is being REALLLLY pedantic about my response, just to point out, its not £15,500, its a bit less than £15k.

£15k = £1028 take home.

Of course take home pay would depend on the individuals tax code.

Sorry couldn't help that reply:D

Lokolo

noh wrote: »

Of course take home pay would depend on the individuals tax code.

Sorry couldn't help that reply:D

Haha I had been thinking about editing my reply to say "on the 647L tax code".

Paul_Varjak

jimshorts72 wrote: »

I used to typically go a few pounds over drawn for 4 or 5 days before pay day and pay 20-30p in interest.

I appreciate that the Halifax is doing this to simplify banking for me. To simplify things for the Halifax, I've decided to close all of the accounts that I hold with the Halifax and do my banking elsewhere.

You have summarized my thoughts entirely! On the day I found out about the overdraft charges I closed my account too, even though I never go overdrawn. My worry was that if my account was accessed fraudulently I would be lumbered with fees that would just add insult to injury!

Of, course the Halifax agency outlets (based in Halifax Estate Agents offices) are closing on 6th January, so there seems little point in point in keeping my account anyway, as I would have to travel 7 miles to my nearest branch - across a toll bridge!

blueberrypie

jimshorts72 wrote: »

I used to typically go a few pounds over drawn for 4 or 5 days before pay day and pay 20-30p in interest.

I appreciate that the Halifax is doing this to simplify banking for me. To simplify things for the Halifax, I've decided to close all of the accounts that I hold with the Halifax and do my banking elsewhere.

If you're depositing at least £1000 per month into a Reward Account, Halifax will "reward" you with a fiver.

If you're overdrawn by four days, you'll pay £1 per day - take it out of the reward money and you're still up by £1.

If you're overdrawn by five days, your £5 reward will be taken up by the o/d charges - but you'll still be up the 20-30p interest that you won't be paying anymore.

Seems simple enough to me ;-)