Unfair Halifax Student Overdraft Rules!

Boris_Allen

Quick question: Why is it in the Banks' interest to hand out as much credit as possible in the form of an interest free overdraft?!?

Afaik, the purpose behind it is not to make money from fees/charges etc so much as to develop a relationship with the account holder, and hope that they will become a life-long customer - then they get greedy and start their irresponsible lending and high rates of interest/fees etc. It makes no sense to suggest they are being greedy by denying you the opportunity to decrease your limit, the most likely explanation is that they have crap IT systems in place, and the first staff member you spoke to didn't have the sense/authority to bend the rules a bit.

FWIW, this is hardly the worst example of poor customer service from a bank, so imo I wouldn't go running away from Halifax expecting the grass to be greener elsewhere, it really isn't!

DVardysShadow

nancygsmith wrote: »

Yes I understand what you are all saying and I appreciate the advice.

I am aware that an overdraft is not a loan and I can just not use it. My aim in making today's payment was to reduce my limit to encourage myself to keep increasing the funds in my account so I can avoid the overdraft charges when they start next year.

I know I could just have paid more and more in while keeping the limit as it was, but I felt uncomfortable with the amount, and as I was in a position to, I wanted to remove the temptation to dip further into the facility.

My grievance was really just that they said they couldn't do what I asked, when they clearly could, because they did after I complained.

If they reduce your limit, you can probably bust that limit as easily as you could bust a limit of your own.

I am making a big guess here, but I imagine that most people here who have gone debt free or who have dealt with more than say 30% of their debts will say that they are now more governed by the limits they set themselves than by the limits imposed on them from outside.

The thing you may find frightening is that if you get your finances into good shape, you will always have many times more credit available to you than you could ever sensibly use. Part of financial maturity is having your own limits and living within them rather than living within the banks limits. I could not tell you my overdraft limit. I am fairly certain I could have it trebled within 24 hours - but equally, I never use it.

I can't really comprehend those who come here disappointed that a bank won't reduce their overdraft limit, when all they have to do is live within their own limit rather than the bank's limit.

scottishblondie

nancygsmith wrote:

The never NEVER discourage people from adding more to their overdraft!

I would disagree with you on this - I was unable to get an increase in my OD until last year (having held the account since 2003) because to give me a higher limit would be "irresponsible lending", in their words.

I don't think that Halifax have done anything wrong here. They weren't preventing you from paying off the OD, but it does cost them time and effort and therefore money etc to reduce the OD, and most students need an increase in the later years of their degree anyway. It seems like it is just their policy not to do it for sums less than 1k, but since you were clearly unhappy they went ahead and did it anyway.

nancygsmith

I think that such policy, although I don't think that is their policy, would be wrong. If someone wants to repay their debts in affordable increments rather than one lump sum, they should have the option to do so.

I also do not think that recognising that having a fixed cap on the sum available in your overdraft facility to remove the temptation you might otherwise have to dip into your "available balance" is "financially immature." Rather, I think it is prudent to take steps to ensure you are paying back your debts in an effective way that works for you. It is certainly a good thing to set your own financial limits and live within them, but if the option of a definite limit that is less likely to be tested than your will is available, what is the problem with taking it?

DVardysShadow

nancygsmith wrote: »

I think that such policy, although I don't think that is their policy, would be wrong. If someone wants to repay their debts in affordable increments rather than one lump sum, they should have the option to do so.

I also do not think that recognising that having a fixed cap on the sum available in your overdraft facility to remove the temptation you might otherwise have to dip into your "available balance" is "financially immature." Rather, I think it is prudent to take steps to ensure you are paying back your debts in an effective way that works for you. It is certainly a good thing to set your own financial limits and live within them, but if the option of a definite limit that is less likely to be tested than your will is available, what is the problem with taking it?

Having the will to live within a limit is part and parcel of financial maturity.

nancygsmith

I do live within a limit.