Unrequested Natwest Overdraft

Amalea

I have just got home from staying at my b/f's house to find a letter from Natwest stating that they are going to give me a £500 overdraft (no fees except interest).
Im curious how this will affect things like my credit rating (although Im not even sure I have much of one if any at all). Also it states I only have 10 days from when the letter was sent to cancel (dated 1st Aug) the overdraft facility-is that normal/allowed? I guess having it could be handy in emergencies, like in my final year at uni, but I don't know how it will affect my plans to apply for a credit card.
I have never been in debt, with the exception of student loans, I just want security with online purchases, hence wanting a credit card.
Basically advice please! Thank you.

Gordon_the_Moron

Amalea wrote:

I have just got home from staying at my b/f's house to find a letter from Natwest stating that they are going to give me a £500 overdraft (no fees except interest).
Im curious how this will affect things like my credit rating (although Im not even sure I have much of one if any at all). Also it states I only have 10 days from when the letter was sent to cancel (dated 1st Aug) the overdraft facility-is that normal/allowed? I guess having it could be handy in emergencies, like in my final year at uni, but I don't know how it will affect my plans to apply for a credit card.
I have never been in debt, with the exception of student loans, I just want security with online purchases, hence wanting a credit card.
Basically advice please! Thank you.

Yes that is allowed, even after the 10 days you can ask for the overdraft to be reduced/removed, I doubt it will affect your credit rating much though.

Mikeyorks

I tend to run my current account at a very low level of funds. And frequently top it up from a Web saver account (same Bank - so the transfer is instant) -as I expect DDs / cheque debits etc to materialise.

Inevitably I cut it too close on the very odd occasion - and go fractionally overdrawn. So I have a small 'arranged' overdraft (initially unsolicited from my Bank, several years ago) which takes care of this .. without charge, other than a few pence in interest for the couple of days until I notice / correct it.

On balance - I gain hugely from having most of my 'monthly' money in a beneficial account, and moving it 'just in time'. It's no great pain to me as I check my accounts regularly in any event. So spending an extra 10 secs doing a transfer .. is no chore.

You obviously have maintained your account sensibly - to have had the offer? Whether you take it up or not, is your choice. But if you cut your balance close to the bone, on occasions, it's much cheaper to have an arranged overdraft to temporarily take the slack .. than have 'unauthorised' charges levied.

One bit I'm not wholly certain of is the possible impact on your credit score? But can't see there can be one - as the offer has been 'thrust' upon you.

Amalea

linux_noobie wrote:

Dont use it and tell them you dont need it or I expect to see you here in 6months complaining about unfair overdraft charges, its just a way to get you into debt.

I'd think i'd done something seriously wrong if that happens. As Mikeyorks has I have a savings account that has instant transfers. That and I should be starting a placement job tomorrow!

My concern with my credit rating was that I thought if you had too much credit then others were reluctant to give you any (ie credit card). Im joint on credit with my dad for paying for my car but Im not sure if it ended up being approved in his name rather than mine. Thats a lot of credit already if its in mine.

Mr_C_10

I've found Natwest do this regularly but only recently have they added the blurb about if you do not want it respond within 10 days.

At one stage they had hiked mine up over a period of 18 months to a stupid amount, what I had to do was pop into my bank and reduce it to a sensible amount. You can do this no problem after the 10 day response time they mention in the letter.

Then you will probably start getting phone calls from them requesting an account review, I'm constantly getting hassled about them even though I tell them I can't afford to save as my account is only there to receive my pay then collect direct debits.

Paul_Herring

Amalea wrote:

I have just got home from staying at my b/f's house to find a letter from Natwest stating that they are going to give me a £500 overdraft (no fees except interest).
[...]
Im curious how this will affect things like my credit rating (although Im not even sure I have much of one if any at all).
[...]
but I don't know how it will affect my plans to apply for a credit card.

Assuming you have no/few other lines of credit, this is likely to be benificial since it shows other institutions that your bank is willing to give you a line of credit, and in the grand scheme of things £500 isn't a huge amount.

I'd keep an eye on it in future in case they decide to up the limit, and request they knock it back down if you're not using it at the time. (I had a requested £500 OD with my bank and probably used it twice, in similar circumstances as Mike above in #3)