HSBC Overdraft

Johntea

Just put a £500 formal overdraft on my HSBC bank account as I'm sorting out a few financial issues over the next few months, they have said it will cost £25 (Fine, as I think I've had a informal request before) - When do they charge this?

Also I set it up to run 7 months, do I have to cancel it before the 7 months are up to stop them renewing it after then?

Also how is the interest worked out as I'm not very good with things like that, are they saying if I have a £100 'negative' balance in my account they will charge almost £20 interest? How often does that get charged?

Thanks :j

onlypaddy

not sure about the first half...

it wont be £20 a month, it will be £20 per year if it is a 20% APR...interest is charged monthly and calculated on a day by day basis

so 20% APR is 0.05% per day. e.g if you have £100 negative balance for a 30 day month it will be: 30 x (0.0005 x 100) = £1.50

Madcat23

The £25 will be taken on the day the overdraft limit is placed/marked on your account.
As you are paying, why not have it for 12 months rather then 7? You can cancel without charge at any time using the telephone or internet. If you don't make any formal or informal requests in the 6 month period before expiry, then it will be renewed without charge.

Interest is calculated daily and charged monthly in arrears. It is pre-notified on your bank statement and you will have about 14 days after receipt of the notification before it is taken from your account.

A simple calculator for debit/credit interest is:
amount / 36500 *rate*no of days eg £500/36500 X 19.9 (their rate) X 31 (assuming a full month) = £8.45

Hope this helps