Help with a minor overdraft situation?

BittersIceAndSugar

I'm a student with a student bank account at Lloyds TSB. When I opened my account I took out the full overdraft and put it in a savings account with Aldermore bank (obviously the student overdraft is interest free, but my savings account pays four point something percent so I make a little money from this). It's locked away in there for another year so I can't get at it. But Lloyds have changed their overdraft terms and will now be (at the end of this month) charging me a £5 fee for every month I finish overdrawn. I'd like to avoid this.

Now I could move all the money in my (Nationwide) current account into my student account in which case I would finish some months in the black but not always as I rarely have enough in my current account to achieve this.

What I'm hoping to do is open a new student account with Natwest (or some other bank that doesn't charge a fee for being overdrawn) and transfer this new overdraft into my Lloyds account to get to zero balance, then close the account.

Then, as I was planning to do, when my savings account matures I can pay back this new overdraft and keep the interest it has earned.

Firstly I want to just check that this is a sound plan and I'm not being an idiot somehow. Second I'm not sure if I can open two student accounts, a friend told me he has friends who have opened multiple student accounts but "my mate told me he..." doesn't seem like good information to go on when dealing with large sums of money and such. If I'm not going to be able to open a second account, or if this just isn't the best way to handle it, what else can I do?

Another option that occurs to me, if I can't have two student accounts at the same time, is to take out a regular, non-student overdraft that is interest free for X months, use that to get my Lloyds account to zero balance, close my Lloyds account, then open a Natwest student account, and use that overdraft to pay off my non-student overdraft. Then obviously pay Natwest's overdraft off with my Aldermore money once it matures.

The Lloyds overdraft is £1,500 by the way.

Any help much appreciated

ezra_pound_insolvency

Beware Natwest! I have just had a leaflet drop through the post lionising their customer service, quite casually accompanied by another detailing changes to unauthorised overdraft charges. Good news: overdraft interest no longer charged. BAD NEWS: replaced by fixed charge of £6 PER DAY when the account is £6 or more overdrawn.

Now - a scenario. X settles all his debts, withdraws his cash, and sets off for a gap year in Patagonia. He has unfortunately overlooked one payment request for £6, which is presented leaving him overdrawn. On his return he will receive a demand for 365 x £6 = £2190. I make this an APR of 36400% which not being expressed as interest does not attract the interest of the regulators. Helpful banking? Helping themselves more like!

zppp

ezra_pound_insolvency wrote: »

Beware Natwest! I have just had a leaflet drop through the post lionising their customer service, quite casually accompanied by another detailing changes to unauthorised overdraft charges. Good news: overdraft interest no longer charged. BAD NEWS: replaced by fixed charge of £6 PER DAY when the account is £6 or more overdrawn.

Now - a scenario. X settles all his debts, withdraws his cash, and sets off for a gap year in Patagonia. He has unfortunately overlooked one payment request for £6, which is presented leaving him overdrawn. On his return he will receive a demand for 365 x £6 = £2190. I make this an APR of 36400% which not being expressed as interest does not attract the interest of the regulators. Helpful banking? Helping themselves more like!

APR is irrelevant - regulators don't measure charges as an APR, because current account charges are not triggered for all customers. If X signed up for the Act now alert service which they have introduced alongside the alteration in the charges, X would have a chance to correct it wouldn't he?

ezra_pound_insolvency

I note with interest that you do not dispute the math, merely the terminology.As with any other (Corporate or non-Corporate) loan shark the effect upon the vulnerable is of no consequence to you. Are you an employee or associate of a major bank? - or a "firm"?

Oh yes - Regards.

By the way the quoted APR of 36400% is relevant whether for one day or 364 - unless someone more numerate would like to take issue with this statement.

BittersIceAndSugar

I'm not looking for an unauthorised overdraft, just an authorised, interest free one as you get with most student accounts.

zppp

ezra_pound_insolvency wrote: »

I note with interest that you do not dispute the math, merely the terminology.As with any other (Corporate or non-Corporate) loan shark the effect upon the vulnerable is of no consequence to you. Are you an employee or associate of a major bank? - or a "firm"?

Oh yes - Regards.

By the way the quoted APR of 36400% is relevant whether for one day or 364 - unless someone more numerate would like to take issue with this statement.

Excuse me but you have come onto this thread blabbing on about unauthorised overdrafts, which the OP is not asking about. I think you'll find I'm completely numerate in actual fact, it's just that I don't go hijacking other people's threads with tosh.

Also, you fail to answer my additional point, that the Act Now service is there to tell you if you are about to go overdrawn to avoid a single charge. I don't really see how this is loan sharking, otherwise they wouln't bother would they?

On a final note, you are wrong with your initial post, thus I am disputing your maths, because the buffer is up to and including £6.00.

ezra_pound_insolvency wrote:

He has unfortunately overlooked one payment request for £6, which is presented leaving him overdrawn

So X would have had no charges. Put an APR on that.

(Also overdrawn charges don't apply to student accounts, but I won't bore you with even more things that are relevant to what the OP has asked)

zppp

OP to answer your point, Natwest do state that you should use it as your main account, so they would expect regular credits and debits to go through the account. I see no problem with it so long as you end up with only one student account. (that's from experience)