MSE News: Bank charges: banks win test case appeal

PadiP

The_Hallowed_Way wrote: »

I get my credit cards free of charge. If I clear my balance every month I don't pay a cent.

Not directly you don't. All retailers have to pay a credit card handling fee to a bank or credit card operator so you end up paying more for what you buy. And do you pay an annual fee for your credit card?

euronorris

The_Hallowed_Way wrote: »

I get my credit cards free of charge. If I clear my balance every month I don't pay a cent.

Yes of course. Because you are again being supported by those being charged fees and interest.

Tiger_greeneyes

ouija wrote: »

Has happened to me before on plenty occasions. It's happened with my electricity, and it's happened with my car insurance... and I'm out of pocket for it.

Same here I'm afraid, no matter how hard I try to stay in the black, there's always a kick in the teeth coming to me somewhere along the line. It may well be a good reason to ditch direct debits and standing orders.

It's certainly not because I'm reckless with my money management because I'm far from it - and have been since I was in debt at 19 (I'm 43 now). I don't have luxuries like Sky tv, holidays (my last holiday was in 1994 - I wasn't able to have a honeymoon, not even one night in a hotel). I don't borrow money and I'm terrified of doing so.

Yet, there are some people on here who don't think low income earners/people like me do all we can, no, we just go and blow every penny we get on frivolities and ignore the mounting debts :rolleyes:

smothy

itsgazza wrote: »

All major banks have a basic bank account that does not allow you to go overdrawn, therefore no bank charges.

Dont start complaining though when you do your weekly shop at tesco if your bank decline your purchases because you dont have enough money in your account!!!

RBS will and do allow this type of account to go overdrawn. They then charge you £38 for it.

The_White_Horse

LizzieS wrote: »

You had more than 2 options:
~ use alternative transport or walk until you could afford to replace the car without paying fees
~ hire a car
~ buy a cheaper car so you did not end up paying fees (seems you had access to only £650 but chose to spend £900)
~ Ask the bank in advance what the charges would be for your decision, so you could then weigh up if this was going to be cheaper than say the higher charging loan companies

exactly - he could have also:

phoned the bank in advance and got an authorised overdraft;

not used the car for a couple of months (there are buses and trains - yes its inconvenient, but plenty of families have no car) and saved up the 250GBP that you were short;

Sorted a deal with the garage, so you could make two payments;

Put it on a credit card with 0% for a month or two;

put it on a credit card with a very high interest rate for two months (still cheaper than the fees - about 19GBP per month on a card with 25% interest rate)

The problem is, people don't think and then they get themselves trapped. It all stems down to bad financial planning. If you want to own a car, you have to factor in petrol, insurance, breakdown cover, servicing, MOT and repairs. If you can't afford it, don'[t have a car. You are NOT entitled to a car!! The trouble these days is the entitlement attitude. My grandfather never had a car (and he had a licence from the army). Why? He couldn't afford it. and he raised a family with no car. How did he manage???

Dan_Bailey

I don't get this "accounts in credit subsidising accounts in overdraft" argument either! The money I've lent from the bank is up to my overdraft limit, which I have been charged a fair interest rate on. My payment defaults cost the banks absolutely nothing as no money ever changed hands., I still had to pay the bill the month after, and the ridiculous bank £35 charge, and the £20 charge from my credit card company for missing a payment! The cheek of the banks to claim that their fines are neccesary to finance their business!

You claim that bank charges are required to subsidise the free banking model, I always thought this was the point of the interest rates on morgages and loans, banks investing activities and current account OD rates. Since when did bank charges feature among the banks primary profit making activities, and so why woould the abolism of them give way to service charges?

The_Hallowed_Way

PadiP wrote: »

Not directly you don't. All retailers have to pay a credit card handling fee to a bank or credit card operator so you end up paying more for what you buy. And do you pay an annual fee for your credit card?

No I don't pay an annual fee, that's what 'free of charge' means. Do I pay more for what I buy? Well I pay the same whether I pay cash or pay with a card so I'd say not.

Charlie94

Vigornian wrote: »

Do you think the new bank is going to take on the account of someone who has a history of bank charges and unauthorised overdrafts?

Of course they will. They will make a fortune out of them!

Tiger_greeneyes

alexjohnson wrote: »

Well it's not obvious why it isn't your utility suppliers' fault. What about the direct debit guarantee? I can see why you would be furious - who wouldn't be? - but not why it's the banks fault. And if you / "someone" has a problem with all these £35 charges, I don't understand why you wouldn't switch to a bank offering interest-free buffer zones.

I agree it isn't the bank's fault that the utility company made the error. But - £35 for just one failed transaction is bad enough but for every single transaction thereafter until you're back in the black is crippling if you're surviving on a basic wage.

I don't understand how people can't see that?

euronorris

The_White_Horse wrote: »

exactly - he could have also:

phoned the bank in advance and got an authorised overdraft;

not used the car for a couple of months (there are buses and trains - yes its inconvenient, but plenty of families have no car) and saved up the 250GBP that you were short;

Sorted a deal with the garage, so you could make two payments;

Put it on a credit card with 0% for a month or two;

put it on a credit card with a very high interest rate for two months (still cheaper than the fees - about 19GBP per month on a card with 25% interest rate)

The problem is, people don't think and then they get themselves trapped. It all stems down to bad financial planning. If you want to own a car, you have to factor in petrol, insurance, breakdown cover, servicing, MOT and repairs. If you can't afford it, don'[t have a car. You are NOT entitled to a car!! The trouble these days is the entitlement attitude. My grandfather never had a car (and he had a licence from the army). Why? He couldn't afford it. and he raised a family with no car. How did he manage???

You're assuming that he would be able to get to work using public transport. This isn't always possible. And no job means no income, thus increasing the debt.

The bank and CC companies may decline any further debt facilities.

And, the garage may be accomodating, then again, it may not.

What then?