End of free banking..

sprinter11

I suppose we all knew that eventually sooner rather than later we will see an end to free banking,well that day for me has finally arrived,or it will be in December.

I have a basic current account with the Lloyds TSB called the Classic account,and what they are going to do is introduce a £5 usage fee for using a planned or unplanned overdraft, this is on top of the interest which i'll have to pay once for each monthly billing period,now unfortunatly for me i am one of those people that is forced to use the overdraft for reasons i will not mention on hear.

Also for customers that go over drawn without permission will in fact pay less interest,so they are in effect robbing Peter to pay Paul.

??What do you all think i should do to avoid paying the £5 charge,as i'm not in the habit of making rich bankers even more wealtier at my expence.

Advice needed please.:cool:

jonesMUFCforever

Easy - use your money only not the banks! ie don't use the overdraft other than in exceptional circumstances.

Don't know how if you have been paying interest on an overdraft you claim to have had free banking - you haven't.

You say you have to use the overdraft - well to be brutal that is your problem not the banks.
Consider a credit card for purchases that you would normally make you overdrawn but beware the charges for not paying it off every month will probably cost you more than the new charging structure LTSB are implementing soon.

knightfox

talk to your bank manager and see what they can do for you.

Otherwise go and talk to another bank and see if they can help you.

HSBC might be able to give you an overdraft, it depends on what you pay in.

Lokolo

Lloyds are realising that customers are using their overdrafts for longterm debts, which people shouldn't be doing. This charge might wake people up.

exel1966

Lokolo wrote: »

Lloyds are realising that customers are using their overdrafts for longterm debts, which people shouldn't be doing. This charge might wake people up.

Precisely, overdrafts are supposed to be used to service short term cashflow issues, not to cover longer term debts.

opinions4u

sprinter11 wrote: »

i am one of those people that is forced to use the overdraft for reasons i will not mention on hear.

Sounds exciting.

What do you all think i should do to avoid paying the £5 charge

Here's a few suggestions. My favourite is the first one - it tends to work:

1) Don't go overdrawn.
2) Change to a bank with a different charging structure.
3) Move your debt to a credit card or personal loan and never go overdrawn again.
4) Post on Debt-Free Wannabe part of the forum and ask for ideas on increasing income and reducing spending and then use the difference to reduce your overdraft.

Good luck!

System

There has never been free banking. However, the current practice is that banks don't directly charge you for some transactions, but pay you less than market-rate interest, or often no interest at all, on money you lend them.

opinions4u

YoungNick wrote: »

There has never been free banking. However, the current practice is that banks don't directly charge you for some transactions, but pay you less than market-rate interest, or often no interest at all, on money you lend them.

Or even pay you £5 a month. Or 4% interest on that money. Shop around. Play the system.

JAYk_2

sprinter11 wrote: »

I suppose we all knew that eventually sooner rather than later we will see an end to free banking,well that day for me has finally arrived,or it will be in December.

I have a basic current account with the Lloyds TSB called the Classic account,and what they are going to do is introduce a £5 usage fee for using a planned or unplanned overdraft, this is on top of the interest which i'll have to pay once for each monthly billing period,now unfortunatly for me i am one of those people that is forced to use the overdraft for reasons i will not mention on hear.

What do you expect when you're wanting to use money that is not yours...?

davidgmmafan

"Lloyds are realising that customers are using their overdrafts for longterm debts, which people shouldn't be doing. This charge might wake people up."

I agree with this to a degree, but much like the Halifax charges it could tip someone who is struggling over the edge. Say they use the overdaft for a small amount the interest rate is collosal. There should be some kind of limit on this, the banks are just doing what they like IMO.

Especially as they have already devastated many lives with thier extortionate charge which, by and large, they have lowered without any admission of wrongdoing. This is much like MP's paying back vast sums out of the goodness of thier hearts. Yeah right.

opinions4u

davidgmmafan wrote: »

it could tip someone who is struggling over the edge.

If a fiver a month is going to tip somebody over the edge then their problems clearly run a lot deeper than their bank's charging structure.

At least they've had 60 days notice to work out how to reduce their spending a little.