MSE News: Co-operative Bank to suspend overdraft interest for three months

jamesd

YorkshireBoy wrote: »

When you factor in the risk of inadvertently dipping into unauthorised overdraft territory, those not completely on top of their finances may wish to give it a miss.

opinions4u wrote: »

Speaking very generally, those with debt invariably rely on it. Cheap debt encourages them to get more debt that they don't then pay off. Leaving them in a worse position than they started out with.

I agree that there are some who shouldn't consider it.

For those who can manage the money, the extra £6 per £1,000 is that much more off their overdraft. Not a lot but every little helps when doing snowball debt reduction.

The story was right to mention the costs IMO, since that's definitely a risk for those who are tempted and get it wrong.

brizzledfw

As an existing smile customer all I can say is was an unexpected surprise to get the email saying they were relaxing the charges. Not used to getting freebies from any bank.

As I understand it the £260 free OD is a feature of the privilege/ smile more accounts and so that remains even after April 2012. It's the extra benefit, eg. I would pay interest on anything over that ( see my current sig for example ) that I now will not have to.

Brizzle

Ticht

Smile have confirmed to me that those customers with an existing (discretionary) overdraft facility, which has previously been renewed annually, will also come under this new arrangement. Therefore, unless the previous arrangement is reintroduced on 1 April, this is a retrograde step for those customers. I agree with brizzledfw that "Every penny is a prisoner". Smile need to recognise that maxim should also apply to existing customers.

ticht (newby)

Stuart_W

Ticht wrote: »

Smile have confirmed to me that those customers with an existing (discretionary) overdraft facility, which has previously been renewed annually, will also come under this new arrangement. Therefore, unless the previous arrangement is reintroduced on 1 April, this is a retrograde step for those customers.

eh?

Standard Smile Current accounts have a £500 fee-free overdraft.
Premium SmileMore Current accounts have a £500 fee-free overdraft, of which the first £260 is interest free.

Co-operative Banking Group are running a promotional period where all debit balances on current accounts within overdraft limits are interest free during the period 5th January to 4th April 2012 (inclusive).

This clearly states that after the promotional period, any account still overdrawn after this date will revert to the charges detailed in the ‘your guide to charges’ for that account.

No retrograde step that I can see, for anyone. Same deal for new or existing customers.

Stuart_W

dougz wrote: »

Bit of a kick in the teeth if you have already paid the annual setup fee recently?

Set-up or renewal fees are not included in the promotion, it is just interest rates. Unless it is one of the fee-free overdrafts (smile £500, smilemore £500, Priviledge Premier £300, Priviledge £200, Current Ac Plus £200) which are all the same for new or existing customers, then the £20 set-up or renewal fee applies, before, during or after this promotion.

No kicking in teeth that I can see.

wakeupalarm

This is a complete con. Don't be fooled by it.

My bank account switch to co-op started in November, but was completed in December. The switch came with a 90 day interest free charges free overdraft which would take me into February.

I received this letter stating that "As you're a customer with a pre-arranged overdraft, we're waiving your interest charges between 5 Jan and 4 Apr 2012".

Called them up because of yet another problem that has occurred with my switch and asked them about the letter.

They say it doesn't apply to me, as I have a 90 day interest free overdraft already. I mention then why does it specify my name and account no. and that I am a customer with an overdraft and specifically state the dates it applies to and from.

They reply that my overdraft finishes in February.

I couldn't get any sense out of the CSA, so can only concluded that they will start charging interest when my 90 days is up in February, and the letter is deliberately misleading to catch out as many customers as possible.

My experiance with Co-operative bank is totally negative, the switch has been nothing but problem after problem, they don't give straight answers, they take no responsibility for any problems and send out misleading letters.

noh

wakeupalarm wrote: »

This is a complete con. Don't be fooled by it.

My bank account switch to co-op started in November, but was completed in December. The switch came with a 90 day interest free charges free overdraft which would take me into February.

I received this letter stating that "As you're a customer with a pre-arranged overdraft, we're waiving your interest charges between 5 Jan and 4 Apr 2012".

Called them up because of yet another problem that has occurred with my switch and asked them about the letter.

They say it doesn't apply to me, as I have a 90 day interest free overdraft already. I mention then why does it specify my name and account no. and that I am a customer with an overdraft and specifically state the dates it applies to and from.

They reply that my overdraft finishes in February.

I couldn't get any sense out of the CSA, so can only concluded that they will start charging interest when my 90 days is up in February, and the letter is deliberately misleading to catch out as many customers as possible.

My experiance with Co-operative bank is totally negative, the switch has been nothing but problem after problem, they don't give straight answers, they take no responsibility for any problems and send out misleading letters.

It's not a con.
You were given a temporary interest free 90 day overdraft.
After the 90 days the overdraft facility will be withdrawn therefore the interest waiver offer cannot apply to you as you will no longer have an overdraft facility.

wakeupalarm

If it cannot apply to me than why send a highly misleading letter saying "As you're a customer with a pre-arranged overdraft, we're waiving your interest charges between 5 Jan and 4 Apr 2012"?

noh

wakeupalarm wrote: »

If it cannot apply to me than why send a highly misleading letter saying "As you're a customer with a pre-arranged overdraft, we're waiving your interest charges between 5 Jan and 4 Apr 2012"?

Because it was sent to all customers who currently hold overdrafts.
Currently you have an overdraft at 0% so the offer is of no use to you. When your current temporary overdraft is withdrawn the offer won't be applicable as you will not have an overdraft.

sonrobert

I have had a Smile Current Account and a Smile Savings Account for many years. I have been a loyal customer though the interest rates on these accounts are very low indeed. I would have thought that the Bank should have been spreading its largesse to those customers who do not use overdraft facilities. I will now be transferring my bank accounts elsewhere in order to get more competitive interest rates and I would urge others in a similar position to do the same.