why banks forse clients to use overdraft...?

Aga_2

I was trying to set my current account without overdraft option so if I have no founds in my account - the card transaction will be rejected by bank and in this way I won't go overdraft neither I will be charge £25-£30 fee by bank.
Unfortunately this is not possible: 'the bank system is set this way'... I was told by Santander and some other banks.
In fact banks can reject the transaction when they decide to but they won't allow the option that any transaction will be rejected where there are no founds in my account.
So what banks are doing - they are forcing me to go overdraft or ifI refuse to use it - I will be charge £25 every time when I am overdraft even £2.
I found this practice very unfair especially these days when we suppose to be extra responsible with money.


Any thoughts, comments?

dunstonh

So what banks are doing - they are forcing me to go overdraft or ifI refuse to use it - I will be charge £25 every time when I am overdraft even £2.
I found this practice very unfair especially these days when we suppose to be extra responsible with money.


Any thoughts, comments?

Learn to be responsible for your own spending. That is how it has always been and the banks penalise those that show no personal responsibility or control.

Inactive

Nobody is forced to use an overdraft facility.

scottishblondie

Retailers etc can process card transactions "offline", so the actual balance on the account isn't known at the time but the bank still has to pay up. You are responsible for your own money, so you need to keep track of what your balance is. Either only spend cash, or keep a transaction diary which has an up to date running balance so that you know how much you have available.

MoneySavingNovice

A Basic Bank account does not tend to have overdraft facilities.

However there are pros ad cons.

I suggest that you read the MSE Guide:-

http://www.moneysavingexpert.com/banking/basic-bank-accounts

I hope is of some help.

antrobus

Aga wrote: »

I was trying to set my current account without overdraft option so if I have no funds in my account - the card transaction will be rejected by bank and in this way I won't go overdraft neither I will be charge £25-£30 fee by bank.

If there are no funds in your account and the bank rejects a transaction you will be charged a fee.

If there are no funds in your account and the bank decides to pay the transaction and you incur an unauthorised overdraft, then you will also be charged some combination of interest and fees.

The trick is not to spend someone else's money without permission. That way you won't get charged.

Paul_Herring

Aga wrote: »

I was trying to set my current account without overdraft option so if I have no founds in my account - the card transaction will be rejected by bank and in this way I won't go overdraft neither I will be charge £25-£30 fee by bank.

Instead you'll be charged £25-£30 by the people who were expecting payment, but didn't get it.your

Unfortunately this is not possible: 'the bank system is set this way'... I was told by Santander and some other banks.

So, lets say, you write a guaranteed cheque, then a direct debit comes out of your account bringing it down to £0, then your guaranteed cheque gets presented.

What, exactly, do you expect your bank to do? If you disagree with my use of cheques in my example, try a debit card transaction that isn't immediately presented to the bank.

I found this practice very unfair especially these days when we suppose to be extra responsible with money.

Is that the 'royal we?' If you're being extra responsible with your money, you'd be keeping tabs on your "expected balance" yourself (i.e. taking into account bills even the bank doesn't know about yet) and thus wouldn't even come close to having a negative balance.

You could always take responsibility of your own finances instead of expecting your bank to do so via the crude method of refusing to pay for things you cannot afford, and whining because they won't be nannying you in that way.

olly300

To put it simply you can't.

There are some debit cards (not always electron or whatever it's called) which will ensure your card is declined in shops that are online for payment if you have no funds in your account, but if the debit card machine you use for payment is off-line i.e. a ticket machine at a train station or even if the machine is online but it's a weekend then you will be overdrawn.

As stated you must manage your money and keep an idea of your balance.

If you have a problem with direct debits coming out of your account then you must sort out your affairs to use standing orders and payment by online banking.

When I was a student and soon afterwards when I was skint I kept a notebook of the amount I spent and the running balance of my bank account. I ensured I updated it at least once a day but preferably when I spent something, written a cheque or another payment had come out.

vaporate

antrobus wrote: »

If there are no funds in your account and the bank rejects a transaction you will be charged a fee.

If there are no funds in your account and the bank decides to pay the transaction and you incur an unauthorised overdraft, then you will also be charged some combination of interest and fees.

The trick is not to spend someone else's money without permission. That way you won't get charged.

How about banks stop offering overdrafts in the first place and stop tempting people...that is the question.

Called control and tempting debt.

Olipro

vaporate wrote: »

How about banks stop offering overdrafts in the first place and stop tempting people...that is the question.

Called control and tempting debt.

while we're at it, let's ban fast food and violent films/video games.

because evidently we're all too stupid to take care of our own affairs that these "temptations" are clearly the fault of the evil industries.

Sorry, if you're too stupid to be able to trust yourself with an account that allows you to go overdrawn, don't open the damn account. If you can't be bothered to read the account terms fully and properly (and let's be honest, overdraft terms are hardly a secret), you have nobody to blame but yourself.

vaporate

Olipro wrote: »

while we're at it, let's ban fast food and violent films/video games.

because evidently we're all too stupid to take care of our own affairs that these "temptations" are clearly the fault of the evil industries.

Sorry, if you're too stupid to be able to trust yourself with an account that allows you to go overdrawn, don't open the damn account. If you can't be bothered to read the account terms fully and properly (and let's be honest, overdraft terms are hardly a secret), you have nobody to blame but yourself.

Obviously your too stupid to see my point...

It's banks not giving overdrafts in the first place...not how you handle your money. Moreover, not giving overdrafts to people who do not want them. As evident by OP reason for thread.

Moreover, my overdraft limit facility is £50 interest free lol. Plus not in it. Barking up wrong tree.