LloydsTSB and the £5 planned overdraft fee

pipsi_2

Despite the opinions of most of the people in this thread i was actually impressed with the Lloyds TSB changes. I don't have an overdraft on my account anymore and very rarely go overdrawn, on the one or two occasions i can remember it was because of the dates of DD or SO and i paid money into my account the same day so did not incur any charges because my account was in credit at the open and close of business but was overdrawn for a short time during the day. I think for people who have had problems with bank charges in the past these new rules are better as it means those who do struggle and may have problems will be charged less, they've also introduced the £10 buffer which i'm sure will help lots of people who have been charged £25 for being £1.14 overdrawn in the past.

I get where you are coming from OP because you will not benefit from the changes but i think the people who will benefit will see a vast improvement with their bank account. It makes no odds to me because i always keep my account in credit even if it is only by a few pounds on the odd occasion.

Vincenzo

missile wrote: »

I don't like the cover offered by AXA. I hope you are aware of the small print?

Travel accident cover only covers for holiays booked with LTSB credit / debit card
You must have three nights booked accomodation in UK, ie. you cannot claim in respect of a wekend away
They do not cover volcanic ash
They do not cover alternate travel if your flight is delayed / cancelled

Thanks, I will look into that. I will have to check against other policies that may cover these eventualities. This illustrates my point about shopping around though. It really isn't a "15 minute" job.

karatedragon

Ditch and Switch

Chrysalis

wow, I googled searching for something related to available balance changes on the online banking and found this, it probably explains what I discovered.

Previously the displayed 'available balance' includes any overdraft limit.

Now it seems to exclude it.

I cant remember the exact text but there was a ? next to my balance and clicking it said the balance shown is credit balance and overdraft limit is to be added to it.

Can others now confirm this?

Also am now annoyed as well about this new charge, I got no letter so want to know specifics, but if its £5 monthly fixed fee a new charge for a planned overdraft thats pretty bad. Mostly I am not in the overdraft but do use it almost every month when a lot of big bills are paid at same time and is a great buffer, its usually only used for a few days so this charge would be disproportionate.

Chrysalis

izools wrote: »

Just phoned Lloyds TSB -

The £5 a month charge applies once a month if you go into a planned overdraft and any further charges applied to an account that go more than £10 over an agreed limit can be waived upon request.

As I hold a Gold account with £100 interest free overdraft, the charge only applies to me if I go more than £100 overdrawn. My limit is £150, so I have requested they reduce this to £100 to save from every incurring charges.

All good

right so its only charged when they would also normally charge interest.

that would mean my limit is probably £50 as I have a select account.

however thats still very bad for me as I now see my effective limit as £50. Fairer would have simply been increasing the interest rate.

Paul_Herring

Chrysalis wrote: »

Also am now annoyed as well about this new charge, I got no letter so want to know specifics, but if its £5 monthly fixed fee a new charge for a planned overdraft thats pretty bad.

It's not a fixed fee - it's only charged if you actually use your overdraft (well more than £10 of it IIRC) in any particular month.

Mostly I am not in the overdraft but do use it almost every month when a lot of big bills are paid at same time and is a great buffer, its usually only used for a few days so this charge would be disproportionate.

Sounds like you would end up being charged it every month then.

Paul_Herring

Chrysalis wrote: »

right so its only charged when they would also normally charge interest.

that would mean my limit is probably £50 as I have a select account.

I would get that in writing if I were you.

however thats still very bad for me as I now see my effective limit as £50. Fairer would have simply been increasing the interest rate.

Not for the targets of this change, which is the people who seem to spend most of their time in an overdraft.

The solution is either find another account that ends up charging you less per month (on whatever tariff is being used,) or don't use your overdraft.

I rather suspect that most current accounts end up charging you around the same amount for 'occasionally' using an OD these days, be it a 'premium account' which charges you for stuff you don't use but doesn't specifically charge you for an OD, or per-month fees for using an OD, or silly interest rates, or annual 'review fees' for letting you continue to use an OD.

Chrysalis

Paul_Herring wrote: »

It's not a fixed fee - it's only charged if you actually use your overdraft (well more than £10 of it IIRC) in any particular month.


Sounds like you would end up being charged it every month then.

thats what I meant sorry, and yes I probably would be.

I usuually use between about £20 and £100 for about 2-3 days a month. I could avoid this and probably will do now but I think the fee is awedul.

In addition I see on lloyds tsb website they dropping the old fixed fees for unauthorised overdrafts, so basically now the only difference between the 2 is the interest rate. Yet even more remarkable is they still going to charge for bouncing direct debits and standing orders.

If I get it confirmed my feeless overdraft is £50 then like izools I may get the limit dropped to this amount, but then it increases the risk of paying £10 per blocked payment which is more then the overdraft fee. If they wanted an extra charge I feel 2 thinbgs should have been different.

(a) charge a % of the overdraft usage, so higher usage is higher charge, basically upping the interest rate.
(b) have a bigger difference between the cost of unplanned and planned everdraft, the main difference is now is its luck if you get a unplanned overdraft or bounced payment whilst a planned overdraft is already approved money.

Chrysalis

Paul_Herring wrote: »

I would get that in writing if I were you.

Its on the website, any overdrafts that are interest fee are not affected by the new fees. Of course I am still going to get it confirmed.

Paul_Herring wrote: »

Not for the targets of this change, which is the people who seem to spend most of their time in an overdraft.

The solution is either find another account that ends up charging you less per month (on whatever tariff is being used,) or don't use your overdraft.

Actually if the bank has decided people using their overdrafts all or most of the time is not profitable they can simply remove the facility, the t&c's already allow them to do this. Once this is done additional fee's would have then applied to the negative balance.

My crystal ball tells me that a lot of people are suddenly going to not get unplanned overdrafts and instead payments will be blocked (as that gives more revenue). Which will go some way to mooting the lower fees.

a0156rp

Do the banks not realise that maybe somebody like myself at the moment struggling finacial hardship after losing a job is in overdraft for a reason? Adding extra charges are just making it even more difficult to pull through.
Fair enough £5.00 doesn't sound alot, but when it is teamed with the overdrafts normal charges and struggling to make ends meet it becomes a whole different ball game.

Rachel. xx