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

gadgetmind

JuicyJesus wrote: »

Granted. But most people with large ODs do not use them like you.

An overdraft is a short term loan to cover a one-off. If people don't use them like this, then they are using them incorrectly. If you want longer-term borrowing, then there are cheaper ways to get this.

gadgetmind

Gromitt wrote: »

However, I know someone who pays his mortgage in part using his overdraft!

I have done that in the distant past, but at the time I had *very* lumpy income, and was also reducing my outgoings and flogging off assets to make everything work.

The lumpy income was because I was choosing to pay my employees even though I couldn't afford to pay myself. It all worked out OK in the end ...

Gordon_the_Moron

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.

True but the increases won't make much difference to you if you use an overdraft rarely and short term, it will only hammer people permanently in debt.

The way Halifax and Santander charge fees not interest is wrong, simple as that, giving someone a lower rate the further overdrawn they are is just backwards.

MonkeyMad

Most people with an overdraft actually seem to think it is some additional form of income that the bank is giving them which is why they are so keen to use it. Which is why there is never any plan to pay them off, instead just moving them round to the next bank with the lowest rate - a good idea in principle but unfortunately most just use it as a way to avoid the day of reckoning)

Gordon_the_Moron

Simple rule of thumb

If you ever use an overdraft DO NOT use a Halifax one, even with the current idiotic fee charging structure it is still vastly overpriced.

GooliesOfFire

Halifax says they make charges clear and simple for customers (yes they care), but it clearly shows they are after even more money from people.

Recently wasn't it Halifax increasing mortgage rates.. to make is simple and clear 4% figure rather than 3.5%? I understand the banks try to earn money, but with Halifax it's getting seriously unhealthy.

I agree nobody should live from overdraft every month. If you use overdraft every month (especially with Halifax and their rip-off "but clear and simple for customers" charges of £1/day) then there is really something wrong with you.

I'm wondering how this short term profiteering will affect Halifax in long run.

JuicyJesus

GooliesOfFire wrote: »

Halifax says they make charges clear and simple for customers (yes they care), but it clearly shows they are after even more money from people.

For-profit companies do have that tendency, yes.

You are always free to not use Halifax. Their current charges are just an embodiment of the idea that if you want things dumbed down and spoonfed to you, you will pay more for the privilege.

I hold no particular brief for Halifax, but thick people were saying they couldn't understand bank charges or whatever and Halifax dutifully came back and said "OK, if you're too thick to work out percentages, here it is, nice and simple for you".

Consumerist

pinkdalek wrote: »

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.

I don't think MSE generally advocates getting out of debt by getting into more. The financially savvy will understand re-financing with lower interest charges but the financially savvy are not so likely to get into that kind of trouble in the first place.

Might have been better to advise consulting one of the free debt advice services if an overdraft has to be permanently in use.

pinkdalek

Consumerist wrote: »

I don't think MSE generally advocates getting out of debt by getting into more. The financially savvy will understand re-financing with lower interest charges but the financially savvy are not so likely to get into that kind of trouble in the first place.

Might have been better to advise consulting one of the free debt advice services if an overdraft has to be permanently in use.

Those people who are not financially savvy rely on forums and MSE for this very reason. Going to a free debt advice and ending up on some form of payment arrangement or IVA is much more detrimental to one's credit rating than re-financing eg loan/re-mortgage.

I never suggested by getting out of debt by getting more, you simply pay off the debt by a different means, thus trying to save you money and get you out of debt in the first place.

This is a "money saving expert" site, obviously the only thing they seem to want to advocate is fannying around transferring money around in a loop to get an extra £5 each month. My gripe at the article was it seems to be a typical scare mongering, Daily Mail typical article and does not offer solutions to the consumer, just makes them worry even more when really they should not have to.

opinions4u

It's expensive.

Be outraged, be overdrawn with them and pay up.

Or stay in credit, collect your fivers and continue running your finances sensibly.

Five months notice to those affected is very generous. Make the most of it and turn your finances round in that time.