Natwest Overdraft limit increase letter

disciple

Happy New Year All

All advice gratefully welcome...

Ever so often I get a letter from my bank NatWest advising me that a new overdraft limit will be applied to my account.

The most recent letter has offered me an overdraft limit of £2050!!!

In previous letters I have not had to do anything to have my overdraft increased however this letter has asked me to advise them if I want to take advantage of the overdraft and if I want further upgrades to my overdraft limit in future.

The interesting thing is that I have never overdrawn on this current bank account so I am quite intrigued as to why the bank continues to up my overdraft limit voluntarily, what's in it for them... is it purely for temptation purposes?

Can anyone please advise me of the benefits of having an overdraft, how it works and how I can use it to my advantage e.g. how to obtain interest free borrowing etc

Many thanks in advance

:money:

thesaint

The overdraft will not be interest fee.

You seem like you use your account in the propper and correct manner, or in bank speak "WE ARE NOT MAKING ANY MONEY FROM YOU". They offer the overdraft to tempt you to borrow money at a rate typically around 15% per annun. It is useful to have it, but please do not be tempted into using it as a long term fix like a lot of people.

I think that they have written to you because it could be seen as irresponsible if they up your limit unsolicited.

disciple

thesaint wrote:

The overdraft will not be interest fee.

You seem like you use your account in the propper and correct manner, or in bank speak "WE ARE NOT MAKING ANY MONEY FROM YOU". They offer the overdraft to tempt you to borrow money at a rate typically around 15% per annun. It is useful to have it, but please do not be tempted into using it as a long term fix like a lot of people.

I think that they have written to you because it could be seen as irresponsible if they up your limit unsolicited.

Yes that is definitely the case i.e. in bank speak "THET ARE NOT MAKING ANY MONEY FROM ME". I don't plan to be overdrawn to be charged any fees!

Should I take the offer of increase to £2050 and how can I use it to MY advantage?

thesaint

If you are disciplined then take up the offer.

It will not cost you anything to have this facility is it? Lenders used to charge a monthly fee for having this available, I don't think that they do anymore(check).

There isn't much that you can do with it as far as I know, it can be useful if you switch current accounts and the new one offers an interest free overdraft for a year or so, they will often match your current overdraft limit(i.e you would have £2050 interest free for a year). It only works if you can resist the temptation to not dip into it and not pay it back after the year is up.

disciple

:T Many thanks

They did send an insert saying the they will confirm to me in writing if they are to charge a fee for arranging the overdraft, since I only have 10 days to reply, I will speak to them before committing myself!

thank you for your advice :A

Phoenix79_2

I very rarely go overdrawn but Natwest have increased my overdraft by £1k so now its £2.5k. My line of thinking is that i'll never use but its always there in case the wheels fall off!

disciple

Many thanks Phoenix79 I agree with your line of thinking, just have to make sure NatWest won't charge me now or in the future to arrange the overdraft facility.

Paul_Herring

Bear in mind that your overdraft is likely to count towards your total available credit (if it matters to you that is; applying for a mortgage or credit card for example.)

Phoenix79_2

Paul_Herring wrote:

Bear in mind that your overdraft is likely to count towards your total available credit (if it matters to you that is; applying for a mortgage or credit card for example.)

My 2 Natwest accounts (both with overdrafts) don't show on any of my credit reports. My HSBC acount that I hardly use does show.

My Dad has 3 Natwest current accounts (one with a £3.5k overdraft) and a Natwest Mastercard (£15k limit i think) and none of those show on any of his reports.

Are Natwest lapse at reporting in to the credit agencies?

disciple

Thanks Paul I didn't know it counted towards applying for a mortagage, great news for when I renewing mine. :T

masonic

disciple wrote:

Thanks Paul I didn't know it counted towards applying for a mortagage, great news for when I renewing mine. :T

I think Paul was using the phrase "count towards" to mean it might reduce your total available credit, not that it will help you when you apply for a mortgage.