So I'm closing my Nationwide flexaccount...

pipk62

anna42hmr wrote: »

Yes you can, as a previous posted has mentioned debit cards have a floor level, (amount depends upon individual banks, usually somewhere between £5-£20) , in which the transactions go through automatically

at the end of the day if you have handed your card over at a shop and inputted the pin knowing their is insufficient funds why should you not be charged within the terms of the account you have.

i would suggest that you apply for a small overdraft facility to reduce the charges in future, as will be cheaper

Well first of all I am going on information I was told by BoS staff when I opened the account, and why would I want an overdraft when I don't go into the red on this account?

anna42hmr

pipk62 wrote: »

Well first of all I am going on information I was told by BoS staff when I opened the account, and why would I want an overdraft when I don't go into the red on this account?

floor limits are standard practice between merchants and banks, one of the reasons that it is less well publisised is for fraud prevention,
you may want to read this article:

http://www.payitforwardforprofits.info/articles/7918/how-your-debit-cards-can-sometimes-take-you-over-drawn/

Not a lot of people in the UK seem to be aware of this, and to be honest neither did I until I found out about this. For this reason, I have decided to do a short article about just how using your debit card has the slight chance of making your bank account overdrawn. The point of this article is not to make you not use it, just to make you aware that it is possible, and to help you avoid any genuine bank charges.

Okay so what you probably all know is that Debit Cards provided by Banks in England to its customers are a guaranteed method of payment to the retailer who accepts the payment via the card. By this I mean, if you say go and shop in your local supermarket, and hand over your debit card as payment then the theory is…. that the little debit card machine checks with your bank via some electronic magic to ensure the funds are available to pay the amount they are requesting.

What you may not know, is that all retailers have what are known as “floor limits” this is the amount that they set the machine to check with the bank for available funds. So one retailer may set it at say £5 and another £30 or more. The amount will normally depend on the retailers normal spend per customer. Of course we as consumers will have no idea what the floor amount is when we reach the till to pay, it’s a bit of a lottery.

The slight danger is that say there isn’t enough money in the account for whatever reason to pay for the goods, but the shops floor limit is less than the amount being requested. In this case they don’t check with the bank to see if the money is there or not. They simply take the card details, you put in your pin or sign the sheet, and they are guaranteed the money from the bank. You as the consumer have said the money is there, and that you will pay by entering your pin or signing the debit card slip.

As soon as you complete the transaction the bank is duty bound to pay the retailer the money you have spent. So if the funds are not there, the bank has to pay the retailer and thus it can take your account overdrawn. At this point you then risk the bank charges, because you have acted and taken your bank account overdrawn.

So the moral of this article is, be careful and make sure you know the funds are in your account before you spend it!

pipk62

anna42hmr wrote: »

floor limits are standard practice between merchants and banks, one of the reasons that it is less well publisised is for fraud prevention,

Hi Anna, This is set by the retailer?

I always thought that certain accounts had a 'balance' system like this, which was set by the bank.

The reason for me thinking this was primarily that some cards seem to be treated different to others.

I have had my BoS card declined for an under £10 purchase, when the account had over £30 in it, and I know other people that use certain cards ( Solo, Electron and Switch I believe) to be refused despite money being available (proven by going to another shop).

olly300

pipk62 wrote: »

Well first of all I am going on information I was told by BoS staff when I opened the account, and why would I want an overdraft when I don't go into the red on this account?

If the overdraft doesn't cost you anything until you use it then it's worth having even if you are not going to use it 99.5% of the time as that 0.5% will be very expensive otherwise.

jamesd

pipk62 wrote: »

Incidentally, some years ago I asked several banks whether they operated a piggy bank system, whereby you could run bank accounts alongside others (like the e-savings) within the same bank, so that, for instance you'd have an account where payments (bills etc) would come from and another where you could save, and another for purchasing, none of them could offer anything like that.

It's a normal feature of banks to allow this, nothing special.

You just open more than one current account or savings account with a bank and designate them yourself for the different purposes. You can also do it using accounts at different banks if you prefer or if for some reason your current bank doesn't let you have more than one account.

pipk62

jamesd wrote: »

It's a normal feature of banks to allow this, nothing special.

You just open more than one current account or savings account with a bank and designate them yourself for the different purposes. You can also do it using accounts at different banks if you prefer or if for some reason your current bank doesn't let you have more than one account.

I was talking about people that have had difficulties, where it's difficult to get a single account, let alone several.

To climb out of the muck it would be handy to have this kind of system within one bank.

Been there done that got the T-shirt, which is why I have these accounts in those 2 banks, and by moving money helped me get out of the problems and debt free.
However, working from 7am until 5pm and to 1pm on Saturdays meant there was no chance to move the money unless I took unpaid leave, or paid holiday, which is why having that in the one bank would have benefited me greatly.

coolesticeking

pipk62 wrote: »

Hi Anna, This is set by the retailer?

I always thought that certain accounts had a 'balance' system like this, which was set by the bank.

The reason for me thinking this was primarily that some cards seem to be treated different to others.

I have had my BoS card declined for an under £10 purchase, when the account had over £30 in it, and I know other people that use certain cards ( Solo, Electron and Switch I believe) to be refused despite money being available (proven by going to another shop).

It is set by the Merchant Provider depending on the credit check when the shop/retailer applied to accept Credit/Debit Cards.

For example, most applications for a Merchant Account from a new business are always set at "Auth required for all sales" until the company taking cards can prove a good track record or provide accounts.

pipk62

coolesticeking wrote: »

It is set by the Merchant Provider depending on the credit check when the shop/retailer applied to accept Credit/Debit Cards.

For example, most applications for a Merchant Account from a new business are always set at "Auth required for all sales" until the company taking cards can prove a good track record or provide accounts.

Ah, I see, makes sense, which makes some cards to be considered as less trustworthy.