MSE News: Halifax to raise overdraft charges for customers deep in the red

Former_MSE_Guy

"The hikes, which come into force on 2 November, hit those who are £2,000 or more overdrawn ..."

Read the full story:
Halifax to raise overdraft charges for customers deep in the red

JuicyJesus

If your overdraft is over £3000, you have bigger problems than fees going up.

LeeB1988

Totally agree with you there JuicyJesus.

innovate

Much agree with you - - I just hope that fees going up is a massive wake-up call, rather than the start of a total downwards spiral, for those concerned.

ses6jwg

just switch to another bank with lower charges most with pledge to match your existing O/D Santander for example will cap your monthly charge at £20 and no fees at all for the firt 4 months.

Barlays will also match your O/D with your old bank and its 19.3% apr

Gromitt

It is worrying that they are saying that currently 3% of the their customers are using up over £2000 of their overdraft.

Say the bank has a million customers - that would be 30,000 people with huge overdrafts. Wow.

innovate

Gromitt wrote: »

Say the bank has a million customers - that would be 30,000 people with huge overdrafts. Wow.

Yeah, really scary, isn't it? But probably a very true reflection of the medium to longer term effects of years and years of a "buy now pay later", "0% interest for umpteen months" culture. People have been conditioned over a long time to thinking it's ok to spend money that they don't have, and that they have no idea how they'd ever repay it.

And as ses6jwg says - - "just switch to another bank with lower charges etc etc" - - - buys you another year or two before the whole thing again blows up in your face.

Of course I am not suggesting that people shouldn't enter into calculated debts - unless you get born with a silver spoon in your mouth, you probably do need a loan or two of sorts at some stage in your life. Getting into debt is ok if you have a sound idea on how you get out of it again. It's not ok if you depend on your overdraft with no end in sight.

gadgetmind

JuicyJesus wrote: »

If your overdraft is over £3000, you have bigger problems than fees going up.

Why?

We've got a £20k overdraft limit and sometimes we use if we're buying (for example) a car and it's going to take a few days to move money from elsewhere.

Borrowings aren't a problem. Borrowings that you can't service and repay are a different kettle of fish.

Gromitt

Completely agree with you. Debt is fine for things you NEED, its not so good for things you WANT but don't NEED.

For example, I've taken out a mortgage for a house, but even though I would have liked a bigger one, I simply couldn't afford it long term as I doubted that the interest rate would remain stable for the entire period (I wouldnt' have been able to afford a 1% rise in interest). I didn't want it to be repossessed, so I found a more affordable option.

However, I know someone who pays his mortgage in part using his overdraft! His idea is "Maybe I'll get a bonus next month and can pay it back". If he doesn't get that bonus, he could be selling up and still have a big debt to pay back.

pinkdalek

JuicyJesus wrote: »

If your overdraft is over £3000, you have bigger problems than fees going up.

True.

The article is far from productive, just a typical shock news let's scare everyone tactic.

If you were so much in debt and in your overdraft constantly then that would tell you that you are living beyond your needs and need to re-finance for a start. An overdraft is not "free money" or something to live in, it is there as a shortfall to fall back on should you have an unexpected bill, late salary, borrow money on a short term basis knowing you can pay back soon.

Paying off your debts with a loan/re-mortgage would be a much more sensible approach, yet the article doesn't offer such advice, which I find surprising considering it is on a money saving expert site.

JuicyJesus

gadgetmind wrote: »

Why?

We've got a £20k overdraft limit and sometimes we use if we're buying (for example) a car and it's going to take a few days to move money from elsewhere.

Borrowings aren't a problem. Borrowings that you can't service and repay are a different kettle of fish.

Granted. But most people with large ODs do not use them like you. They live in them, and that's the people the news article was written about.