Interest charges on an interest free overdraft

danothy

Morning all,

I appear to have been charged interest on my "interest free" arranged overdraft (student account with NatWest).

A transaction has appeared dated the 23rd of August stating £0.32 interest had been paid out with no other detail. The previous balance had been £1,100.00 overdrawn.

I'm planning on going into a branch on Monday to see if I can get it undone before any significant amount is slapped on.

I'm not really clear what to make of it, and I just wondered if anyone here had any insights or advice.

DarkConvict

I guess your overdraft is exactly £1,100.00. You shouldn't have incurred an interest charge.

Are you making any monthly payments against the overdraft, as if you don't they can terminate it given 30 days notice.

zppp

Probably due to drawing against uncleared funds. If you have paid a cheque in recently and made transactions against it early, this may incur interest

danothy

Yes, it is £1,100 exactly, my last payment into the account made it a round figure. I'm also well below the arranged limit, so I don't think it it's because of drawing on uncleared funds, although I will keep an eye out for that across the board in future.

The T&Cs of the account are a credit every three months (designed for student income presumably) and three debits a month during term time (which is slightly more worrying as I'm trying to pay it off not spend from it) or they reserve the right to remove the interest free overdraft, but I've not received any correspondence indicating that they've withdrawn it.

It's quite an odd amount, I can't seem to work out how 32p would arise if they had just withdrawn it either.

DarkConvict

Try calling the bank - http://www.natwest.com/global/contact-us.ashx

For phone numbers see if they are free - http://www.saynoto0870.com/search.php

danothy

I have a bit of an allergy to phone banking, so I think I'll leave it to Monday and enquire in branch. If they have withdrawn it I want to pay it off and close the account immediately, and I wouldn't be in a position to do that until Monday anyway as I'd be putting myself into financial hardship and relying on my father's generosity for a month.

danothy

Yesterday I went into a branch to find out what was going on and thankfully this has been sorted out now.

It turns out that after July I was being charged interest on £100 of the balance, but they were kind enough to refund the 32p charged and reset the limit.

The reason for this was that some time ago I received a letter from NatWest saying how my student account had been converted to a graduate account (which was fair enough, but I had changed back as I went on to do a postgraduate degree), but apparently the interest free limit and timespan on the overdraft weren't changed back to the whole amount and the life of the new degree (NatWest incrementally reduce the interest free overdraft when you're a graduate).

I'm glad to be back no worse off that I was before this happened.

Zoology_Dragon

Glad you got it sorted, I've had similar issues with my overdraft, they seem to find it very hard to comprehend that some people do more than one degree. I remember when I started my PhD they tried to reduce my limit down to whatever it is you're allowed in your first year.

Me: I'm not asking for extra but I do need it to remain unchanged, this is my fifth consecutive year of study.
Them: Ah yes but it's your first year of this degree.
Me: But where do you think I'm going to magic 1.5k from to reset the overdraft when I've been a student all this time?
Them: Oh.

It was sorted in the end but not without much stress.