Personal Reserve Fee

Lucy1984

Hello

I wondered if anyone could give me any advice.
I am in a bit of a mess with my bank account, every month I am going over my overdraft limit (£1000) and into my personal reserve (£150), which I am getting charged £22 every time I use it. This generally adds up to £88 worth of fees every month, which pushes me further overdrawn and then the next month I end up in the same situation.
I am going to go into the bank at lunchtime today to see if there is anything that can be done. I am really concerned as to how this is effecting my credit rating, as I am looking to move house later this year. I do not have any credit cards or loans.
I'm really not sure how to get out of this situation. I never seem to have enough money left in my account at the end of the month, after mortgage and bills have been paid. I did pay my overdraft off in full at the beginning of this year, but I have gradually crept back into in and now I am constantly at my limit.

jjlandlord

It clearly seems that you are living beyond your means and paying extra in bank fees for the privilege.

My advice: Cut your spending before you hit the wall.

jalexa

Lucy1984 wrote: »

every month I am going over my overdraft limit (£1000) and into my personal reserve (£150), which I am getting charged £22 every time I use it. This generally adds up to £88 worth of fees every month

This will seem unsympathetic but please try to see the point I am making.

You are paying £88/month for the use of a Personal Reserve of only £150. That doesn't make sense and is equivalent to an astronomical interest rate.

I'm afraid you need to cancel the Personal Reserve facility which is not appropriate to your financial position and budget within your overdraft limit. Sorry I can't say how but make a budget if you haven't got one and see if it is possible to adjust direct debit payments and/or standing orders to a day of the month less likely to result in unpaid or unarranged overdraft fees.

qpop

Have a look on the moneysavingexpert site section about budgeting. This will severely hamper your chances of getting another mortgage given the current lending climate for mortgages.

Some good news: Other than the over-limit marker that banks can put on your credit file (and to be honest most don't bother) a prospective mortgage lender will only check the last 3 months statements. If you want a mortgage clean up your act for at least three months before applying.

I wouldn't take any of the banks offers of help unless at last resort. These will be one of two things - an "overdraft reduction plan" which will cancel all charges and then reduce your o/d by £50/£100 pm - this is basically enforced budgeting, but you can be charged if you go over your newly-reduced overdraft each month.

The other is a managed loan type product, and these are never good news. Only last resort options IMO.

Take your last three months statements, print them out, and look at them (if it helps, imagine you're in a mortgage lender and think "how is this person spending their money")

Take a highlighter and highlight every bit of spending you didn't need to make, and maybe with another colour highlight expenditure you could have reduced (i.e. your shopping - did you need the luxury super duper bread or would Asdas own brand have sufficed) - tot up the results of the highlighted figures and work on those first.


edit: in response to jalexa - a "personal reserve" isn't a packaged product, it's the banks way of saying "this is an unarranged overdraft but we guarantee we'll pay your direct debits if you go into it, at a charge"

jalexa

qpop wrote: »

edit: in response to jalexa - a "personal reserve" isn't a packaged product, it's the banks way of saying "this is an unarranged overdraft but we guarantee we'll pay your direct debits if you go into it, at a charge"

Oh yes it is (a "packaged product").

And furthermore this is what the (Barclays) website has to say...

"Personal Reserve is subject to status and application. It is repayable on demand.

Your Personal Reserve is intended for short-term use only. If you use your Personal Reserve continuously for more than a few weeks we may contact you and we may seek to reduce or restrict your Personal Reserve. We will review your Personal Reserve regularly and may increase or decrease it (including removing it entirely). If we reduce or remove your limit, you will have to pay our charges for returning payments and/or for making guaranteed payments if you subsequently attempt to exceed your revised limit."

It should be Barclays contacting the account holder, not the other way round. As I said it's not appropriate to the account holders financial postion - something Barclays must be aware of.

Lucy1984

Thanks for the replies.

I know I am living beyond my means, I have tried to cut back on everything but still struggling. I'm stressed because it is my husbands birthday next week and I do not have any money left in my account to buy him a present.

What happens if I cancel my Personal Reserve and then I go over my overdraft limit? I assume I will get charged, but how much?

jjlandlord

Lucy1984 wrote: »

What happens if I cancel my Personal Reserve and then I go over my overdraft limit? I assume I will get charged, but how much?

That's for you bank to tell you.
I would imagine that going into unauthorized overdraft would cost you ~£12 plus a daily fee, which may be capped to a monthly maximum.

In any case, stop asking yourself these questions because they mean you are planning to go over your overdraft.

You have no choice: Cut your spending.

Make a list of all your monthly spendings and cut ruthlessly until you get below your monthly income. Then stick to it.
E.g. do you need shopping? No you don't. Do you need to eat out? No you don't. Etc, etc.

jalexa

Lucy1984 wrote: »

What happens if I cancel my Personal Reserve and then I go over my overdraft limit? I assume I will get charged, but how much?

The answers to that question can be found on the Barclays website.

How often you will be charged depends on how you run your account. Can you see (from your budget) if Direct Debit and/or Standing order payment dates can be adjusted to minimise the number of charges?

opinions4u

it is my husbands birthday next week and I do not have any money left in my account to buy him a present.

Just be extra nice to him, I'm sure he'll appreciate that as the best possible pressie.

If you know what I mean

Lucy1984

I don't have any standing order/direct debits going from this account, they all go from a joint account which I transfer the money into at the beginning of the month. That account is in credit. The money left in my account is my spending money, which I am clearly overspending!

Lucy1984

opinions4u wrote: »

Just be extra nice to him, I'm sure he'll appreciate that as the best possible pressie.

If you know what I mean

ha ha ha ha