End of free banking..

sprinter11

Lokolo wrote: »

No but the poster has just signed up to vent about the overdraft charges. With 1 post to their name, do you really think they're here asking for help?

They haven't said so in their post, nor have they returned to ask for help..... You don't exactly need common sense to work it out do you?

Blinkin ada Lokolo,i did'nt think that you needed to have a minimum post count on a forum before you asked for help,?do you work for LTSB .

If my post is'nt asking for help or advice then i don't know what is...and what are you infering with the claim..You don't exactly need common sense to work it out do you?[/QUOTE]very strange reply...work what out exactly.

And the bit about..They haven't said so in their post, nor have they returned to ask for help.Well they means me as in singular,and "I" have found time now to look for replies...chill buddy.

Lokolo

sprinter11 wrote: »

Blinkin ada Lokolo,i did'nt think that you needed to have a minimum post count on a forum before you asked for help,?do you work for LTSB .

If my post is'nt asking for help or advice then i don't know what is...and what are you infering with the claim..You don't exactly need common sense to work it out do you?very strange reply...work what out exactly.

And the bit about..They haven't said so in their post, nor have they returned to ask for help.Well they means me as in singular,and "I" have found time now to look for replies...chill buddy.

You taking the p*ss?? Course I don't work for Lloyds, I wouldn't work for a bank silly.

And having a large count post just makes me a cynic more than anything. Most people who vent about the banks and their charges don't usually want to budget! Just what I've noticed thats all.

JimmyTheWig

And the good news is that sprinter seems to be following our advice...
https://forums.moneysavingexpert.com/discussion/comment/36691633#Comment_36691633

mintedmatty

Lokolo wrote: »

Not when they come here to just complain about charges no. Has any of them asked for any help to get them out of the situation? No. Therefore, no empathy

Having worked in the banking industry in the past, I have empathy for the people who do struggle from month to month, the big question though was always 'what originally made you go overdrawn in the firstplace? into the bad cycle of payday just bringing your balance back to 0?' It was always something random and general spending,people seeing the £££ in the bank and not thinking of the consequences. Every now & again there would be an emergency like a dentist bill? but 90% of the people I advised it was through their own doing.

tiff

JimmyTheWig wrote: »

And the good news is that sprinter seems to be following our advice...
https://forums.moneysavingexpert.com/discussion/comment/36691633#Comment_36691633

Well, I dont think anyone advised taking out a loan to pay off the overdraft, so they arent listening.

Budget, budget, budget and transfer the debt to the lowest rate possible, ie 0%!

gazelle8760

I suppoze we have had it good in this country for quite some time now, when I lived in the U.S, there was never any such thing as "free" banking, you basically had to keep a daily balance of at least $750 per day in your checking account, or face a monthly charge of $12, and this was worked out on your average daily balance, checks were not free either, and you had to buy them in boxes of 20, plus it was even illegal in some states to go overdrawn, or even bounce a check.

I bank with Lloyds, and appreciate that their £5 per month for overdraft useage is quite low, compared to most banks, I have their Premier account, so won't pay interest for the first £500 anyway, and I do use the overdraft monthly, and yes I do budget my money, and I do know my limits, so if ever it was pulled, I know a comforable amount I would be able to sacrifice if I had to re-pay it back, all so often you read people's comments to others, about you must live within your means, you must learn to budget properly etc etc, sadly, not everyone has that luxury, and others are grateful to use their overdrafts monthly, in my case, I use it for my own needs, it's cheaper than a Credit Card at times, more so If I want too treat myself to something, as I know on my next pay day, I'll be well into credit again, problems arise when people who use their overdrafts and get paid, still remain in their overdraft, and never seem to get into credit, but I still think that a set £5 charge is reasonable, I guess time will tell whether we end up like America, and The Banking system requires a Customer to keep an average daily balance in their account, or face further charges, free banking certainly will then come to and end, if it hasn't already done so.

LongTermLurker

ERICS_MUM wrote: »

Overdraft limits that are not used, ... cost the banks a lot of money now that inter-bank lending is more expensive and has quite an impact on liquidity.

So I can understand LTSB ... charging a fee for accounts with agreed o/ds that aren't used.

Why does the option of an overdraft cost the bank money?

JimmyTheWig

LongTermLurker wrote: »

Why does the option of an overdraft cost the bank money?

I believe it does.
Is it that, whether used or not, it needs to be underwritten?
If they're offering to lend that money to you they can't lend it to someone else.

And obviously if you don't use it then you don't pay for it so they don't recoup their costs.

opinions4u

LongTermLurker wrote: »

Why does the option of an overdraft cost the bank money?

They set capital to one side to cover potential losses against credit lines issued to customer.

All the recent threads about reductions in overdraft limits and credit card limits are related to this need to set capital to one side to cover a facility where it's possible for no money to be lent and no interest to be charged.

Much better to free up capital for stuff that is guaranteed to make them money.

LongTermLurker

Thanks guys - makes sense, but I don't actually ask for an overdraft - they throw them at me and every so often I get a letter telling me (even though I haven't used what I've got) they've increased my overdraft.

It's hard to talk about charging someone for an OD they don't use when they never asked for it in the first place and it grows faster than my investments!