New overdraft fees

coupes

Last month I received a letter from my bank explaining that they are making changes to my overdraft facility. I have an arranged overdraft on my current account. Part of the letter is shown below.

“At Halifax we’re committed to fees that are clear and simple to understand. From 6th December 2009 we’ll charge the following daily fees:

• If you use an arranged overdraft up to £2,500, we’ll charge you £1 a day
• If you use an arranged overdraft over £2,500, we’ll charge you £2 a day
• If you use an unarranged overdraft, we’ll charge you £5 a day

We wont charge you any interest on an overdraft, whether its arranged or unarranged. This means there will be no additional fees to pay if you use an overdraft. These fees make it easy to calculate what your overdraft will cost you each month you use it.”

As I understand it this means that if I am overdrawn by £50 I will be charged £1 each day until the balance rises back above zero. But lets say if was overdrawn for a whole month would I be charged £30? Extortionate.

Premier_2

Martin highlighted this recently on TV

Why don't you borrow £2499.99? It'll cost the same. Bargin! (as they say)

c.cox

I am in the same situation as yourself with my halifax..

But upon researching (basicly checking their website) It will not affect me badly, because my authorised overdraft is only £100, and you will not be charged nothing if you go into an authorised overdrafte of upto £300.

The only thing i have to worry about is if i go over my £100 then i will be charged £5 a day, which is alot if i do not get paid till a week later

Just have to budget carefully.

dunstonh

As I understand it this means that if I am overdrawn by £50 I will be charged £1 each day until the balance rises back above zero. But lets say if was overdrawn for a whole month would I be charged £30? Extortionate.

The bank charges issue has seen many of the banks revise their charges in ways that are less likely to be scrutinised in future.

With those changes, many people are worse off, some better off. The whole bank charges issue was never going to see an end to charges. It was going to result in a change in the way they were taken.

Just have to budget carefully.

Well, who would have thought about that. Having to control and manage your own spending

Back in my banking days we used to set up loads of number 2 accounts or budget accounts. You would set up a standing order to go out after pay day to the number 2 account that would cover all your standing orders and direct debits for the month. All of those would then come out on their usual dates from that number 2 account. Quarterly, half yearly or yearly payments could be factored in to the monthly standing order as well.

What you had left in the number 1 account was yours to spend for the month.

esmerellda

Thats what I used to do too, and account number 3 for ex-OH's pocket money

Works fine unless one of the DD's suddenly shoots up so you have to allow a bit of leeway for that eventuality.

111222

Basically this whole test case has completely backfired, the banks will now charge even more than before!

ILW

esmerellda wrote: »

Thats what I used to do too, and account number 3 for ex-OH's pocket money

Works fine unless one of the DD's suddenly shoots up so you have to allow a bit of leeway for that eventuality.

Yes, that heroine can be a bit pricey.

esmerellda

pmsl, just lost half my coffee !

coupes

I don't want to pick on a particular bank, but their opening line should start with "At Halifax we're committed to ripping people off...".

It's obvious they want to discourage people from using their overdrafts. Making sure that if you have to use it then you will pay through the nose for the privilege.

Does anyone know how long these overdraft fees can be charged for at the maximum? For example lets say i have an arranged overdraft limit of £800. Over 3 months I use £500 of this and rack up overdraft fees of £90. How long will they allow me to stay in debit or is it indefinitely? And would the overdraft fees be automatically charged to my overdraft, therefore continuously increasing it?

Also does anyone know of a bank or building society where they offer an overdraft on a current account with no charges? thanks

Premier_2

coupes wrote: »

...Also does anyone know of a bank or building society where they offer an overdraft on a current account with no charges? thanks

No, I don't know of any one who lends money for free, but if anyone should do, can I have a couple of million quid please?

dunstonh

It's obvious they want to discourage people from using their overdrafts.

I would think its more obvious that they want to discourage people from using unauthorised overdrafts.