Not understanding Nationwide 'Reserve Limit'

Gromitt

I've just received my bank statement to find out my current balance is £-207.99

I don't have an agreed overdraft facility. I assumed that should I use my card and there was not sufficient funds in the account that the transaction would simply be refused when the vendor attempted the authorisation. Apparently not.

No instant charges have been applied to my account, and the statement doesn't say anything like "We estimate the interest we will charge on the new statement will be £x".

Looking online, my account apparently has a £250 "Reserve limit". I understand this to mean "We will pay your debits upto this amount, but you'll still be charged as an unarranged overdraft."

So does mean I'll be charged 18% on the overdrawn amount?
A £20 unarranged overdraft charge will appear on my next statement?



(and the bank just points me to their confusing literature via auto-replys)

(I credited the account today so now it's in credit again. So about a week in overdrawn status)

olly300

UK bank accounts don't work like that unfortunately as it's a way for the bank to make money.

They either offer you an unauthorised overdraft which they did in your case, or bounce every thing and charge you around £30 for each item you give them the privilege of bouncing they then charge you for the charges as they make you overdrawn.

Moral of the story:
1. Have a pre-arranged authorised overdraft if it doesn't cost you anything which it shouldn't with NW
2. Don't go over drawn.

Edited to say:
The reserve limit is the limit you have before they bounce everything and the charge you for bouncing payments, and then charge you for them bouncing payments.

ses6jwg

In almost every other country in the world you are charged for day to day banking such as a set charge for written cheuques, banked cheques, card payments etc.

Obviously in the UK we do not. This costs the banks a lot of money. They regain this by charging a huge amount more in terms of bank charges.

So basically those who cannot manage their money subsidie those that can.

Milarky

Gromitt wrote: »

No instant charges have been applied to my account, and the statement doesn't say anything like "We estimate the interest we will charge on the new statement will be £x".

Looking online, my account apparently has a £250 "Reserve limit". I understand this to mean "We will pay your debits upto this amount, but you'll still be charged as an unarranged overdraft."

So does mean I'll be charged 18% on the overdrawn amount?
A £20 unarranged overdraft charge will appear on my next statement?



(and the bank just points me to their confusing literature via auto-replys)

(I credited the account today so now it's in credit again. So about a week in overdrawn status)

So, answering the OP's question for a change..

Re. Nationwide current a/c
Yes, you will be charged per item for payments made under a 'reserve' limit, like this. You will also be charged interest covering the period of any negative balance. Notification of charges follows with your next statement - and actual application of the charge (to your balance) takes place 28 days after that. But Nationwide seems to raise their charge on a fixed calendar month basis - regardless of when individual statements are produced. This can lead to confusion about whether you have been charged or not (i.e. their notifications are tardy)

If I were you, consider requesting that your reserve is converted to an agreed overdraft now. This means you will only get charged interest whilst within the limit, but not charged for any actual paid items. You can go online and request this change instantly, I believe.

On Nationwide's 'reserve' limit
It is confusing. The idea that it 'helps' you to have a buffer they don't explicitly tell you exists ('hidden' under a tab) but which conveniently leads to your being charged ('some time' later!) is simply daft. That said every bank charges customers for either 'trying' or 'suceeding' in paying an item which exceeds whatever limit in on their current account. That's why it can't be worse to have a big overdraft as a buffer in the first place - so if they offer you the buffer, take it!

Gromitt

So it's now the 10/09, I've received my statement, and although it shows the negative balances, it shows nothing about any charges.

OLB shows nothing out of the usual either.

I'll wait for next months bill to see if anything is shown on that.

Andystriker

Gromitt wrote: »

I assumed that should I use my card and there was not sufficient funds in the account that the transaction would simply be refused when the vendor attempted the authorisation.

Why do people think that banks are there to wipe their @rses for them.

If you don't have the money then don't spend it.

Gromitt

And how do you know you don't have the money unless you visit the ATM every day to check?

If you use a credit card and try to exceed your limit then the card is refused, but if you use a debit card (because you only want to spend what you've got), you don't expect it to turn into a credit card as soon as you've spent all your cash.

backinbusiness

t'internet??

Gromitt

So your basically saying "Login to your account as much as possible to increase the chance of someone stealing your login details and logging in for you" ?

I login into my OLB account MAX once a month (if that). If I want to view my balance or make transfers I visit the branch.

Even the banks think its insecure. I once asked for a replacement card over OLB. They responded with "Please use telephone banking or visit your local branch to order replacement cards. We can not accept requests through online banking for security reasons.".

dawyldthing

i use telephone banking all the time

noh

Gromitt wrote: »

And how do you know you don't have the money unless you visit the ATM every day to check? ..............

.

Pen and paper always worked for me.