MSE News: Reaction to Halifax's changes

sunnydais

tradetime wrote: »

Normally I'd actually have a somewhat sympathetic ear to that point of view but given the amount of Taxpayer money pumped into the Halifax / Lloyds Bank I'd probably have been tempted to tell the condescending young lady she should consider herself lucky to still have a job.
http://www.marketoracle.co.uk/Article14432.html

To steal a line from investor Jim Rogers "When nobody can fail, everybody fails."

yep there are millions of unemployed plunged into the red who have had to use their overdrafts those not in this situation and not having to use their overdrafts count yourself lucky.

hazeldragon

i was outraged when i got the letter from the Halifax, but took positive action by moving my bank account to the alliance and leicester the following day. goodbye Halifax you won't be missed!!

gemmabe

Got my letter today. Any thoughts on my situation would be appreciated:-

I currently have an Ultimate Reward account with a £1500 overdraft. At the moment I am paying around £15 a month in interest, plus the £12.50 account fee. Currently £27.50 ish per month.

So, I am thinking the best option for me would be to switch to a Reward account, ditching the £12.50 a month fee, paying £30 a month and they pay me £5 for paying in £1000 a month, sooo the new cost around £25 per month.

Does anyone know what the specifics are for the paying in £1000 a month? Does it have to be paid in electronically? I am self-employed and the way I am paid varies, and don't want to be losing out on the £5 per month because of the small print.

This is not as bad as I was expecting now I have done the sums - was thinking I was going to end up paying a lot more. But at the same time I feel like saying to them they should give me the full use of the £2500 limit for £1 a day...whilst of course feeling very sorry for the people who only need a small overdraft.

Of course, if and when business picks up and I manage to pay off the majority of this overdraft, I will still be paying the same amount in fees! At that point I may have to try switching elsewhere, but due to my poor credit rating I doubt any bank will offer me anything other than a basic account.

rb10

gemmabe wrote: »

Does anyone know what the specifics are for the paying in £1000 a month? Does it have to be paid in electronically? I am self-employed and the way I am paid varies, and don't want to be losing out on the £5 per month because of the small print.

It doesn't have to be paid in any specific way - as long as the money arrives in the account you'll be paid the Reward. And it doesn't have to be all in one transaction either, or all on the same day, so, for example, 10 x £100 credits at varying times during the month would count.

Of course, if and when business picks up and I manage to pay off the majority of this overdraft, I will still be paying the same amount in fees! At that point I may have to try switching elsewhere, but due to my poor credit rating I doubt any bank will offer me anything other than a basic account.

Keep the account open though. If and when business picks up even more, and you manage to pay off the whole overdraft, then you'll be £60 a year better off.

Nathan_Spleen

opinions4u wrote: »

.

They're not disguising anything. It is simple and clear. For many overdrawn customers it is also expensive. At least they can quickly work out how expensive and take action to avoid being overdrawn.

.

This must rank as one of your most patronising responses yet.

Of course Halifax are disguising huge charges in the name of simplicity. On each and every occasion that journalists have asked Halifax to comment on the (extortionate, not ''expensive'') 3 figure interest rate that their £1 a day overdraft charge represents the bank has consistantly responded by saying the changes were put in place to make it ''simple & clear''. But somehow missing the point that the terms would be equally simple & clear if the charge was 1p a day.

apt

The Reward charges and benefits are not based on APR so it does not make sense to focus on that. Yes the APR would be almost 36500% if you were stupid enough to run a permanent overdraft of £10.01. Similarly you could earn a nominal interest rate close to infinity by bouncing £1,000 in and out of your account each month. If people with ample income but who cannot be bothered to run a current account properly get hit by a series of £1 charges then that is really their own fault. These people also have the option of moving to other banks. More serious is the impact on those who really are struggling financially, do not have the income to clear their overdraft, and will probably struggle to find an overdraft with another bank. These are the people who are hardest hit by the £1 per day charges. The media should differentiate more between the whingers and the victims.

opinions4u

Nathan_Spleen wrote: »

This must rank as one of your most patronising responses yet.

You're welcome. It's great that it doesn't meet with your approval.

Of course Halifax are disguising huge charges in the name of simplicity.

It isn't disguised in any way shape or form. It is clearly published and about as transparent as you can get.

On each and every occasion that journalists have asked Halifax to comment on the (extortionate, not ''expensive'') 3 figure interest rate that their £1 a day overdraft charge represents the bank has consistantly responded by saying the changes were put in place to make it ''simple & clear''.

Which they are.

But somehow missing the point that the terms would be equally simple & clear if the charge was 1p a day.

1p, £1, £10 a day. Clear as you like.

So the bank abolishes £28 charges for unauthorised overdrafts and £35 charges for bouncing a payment. I thought that was what everybody wanted?

Nathan_Spleen

opinions4u wrote: »

It isn't disguised in any way shape or form. It is clearly published and about as transparent as you can get.

I'm not sure what you mean by ''it'' but never the less you misunderstood, so I'll spoon-feed you.

The disguise is in Halifax taking the very unusual decision (by industry standards) to promote the cost of an overdraft as a cheap-sounding quid a day rather than being open about an interest rate that even low life loan sharks would be proud to achieve.

In summary Halifax have thought out of the box and and replaced complexity to disguise their charges with simplicity to disguise their interest rates.

I'd bet cotton chomping dollar that once the OFT's Market Study implementation goes live requiring banks to highlight the interest charged on overdrafts, Halifax will realise that their customers won't need to reach for a calculator to compare the interest rate with that of other banks and change their charging structure yet again.

realshannon

Not sure of some of these posts are particularly helpful - it appears some are enjoying the fact that others will be struggling - there is a saying which personally I find very reassuring "what goes around comes around" ...to remind people the idea is to support and help not patronise and point out the bloomin obvious, it doesnt make you a numpty if you have an authorised overdraft!

lazer

Personally,

I think its great that Halifax have taken the initative and are actually rewarding customers with money!

The £5 per month for just putting in £1,000 is great.

If you fully consider there proposals - I would assume they are cost neutral as 57% of customers never use an over draft and a further 16% of customers aren't in overdraft for more than 5 days.

Thats a total of 73% of customers who will actually benefit from this.

Anyone with an account permanently in overdraft - therefore paying £25 -£30 a month, do you think Halifax actually want your business? - They will be perfectly happy for you to move

An overdraft has always been repayable on demand

Halifax is now basically government owned - and those people paying receiving the £5 a month are most likely those paying the taxes!

Hooray for Halifax!