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

Butterfly_Brain

Halifax is owned by Lloyds and they too have put their charges up. I was blatantly overcharged on their house insurance paying over £600 pa for Buildings and contents insurance and they turned nasty when I cancelled the policy an went elsewhere. I am saving hard so that I can pay off my mortgage with them as soon as I can and I draw out my money from my account and put it elsewhere so they can't use it.

spnoe

Charges are all well and good, for services rendered but what seems to be happening is another rip off. Charges ought to be proportionate to the work carried out by the bank and other services such as er, Interest on accounts. I get next to nothing on my Halifax account but would be charged high amounts if overdrawn. Banks are institutions to make money but lets have some balance. At present it is not worth investing in banks.
It is now impossible to obtain a plain old bank account that just gives a good interest rate.
I am for a bank making a profit but not making millionaires out of Directors.

JuicyJesus

spnoe wrote: »

Charges are all well and good, for services rendered but what seems to be happening is another rip off. Charges ought to be proportionate to the work carried out by the bank and other services such as er, Interest on accounts.

It'd be nice if they were, but they don't have to be.

Also, borrowing costs don't just reflect work done. They also reflect the risk of lending the money, and the probability that the funds will be repaid. If you have a big overdraft you are much more likely to default than someone with a small one.

I get next to nothing on my Halifax account but would be charged high amounts if overdrawn. Banks are institutions to make money but lets have some balance.

You can put £1000 a month into a Reward account for 5 seconds each time and make a fiver. They're remarkably generous on that front.

It is now impossible to obtain a plain old bank account that just gives a good interest rate.

That is because the base rate is at a record low, and customers demand more and more expensive services every day for no money whatsoever.

Consumerist

pinkdalek wrote: »

. . . you don't have to take out the products they offer.

Try telling an employer that you don't have a bank account to pay salary into. Try claiming benefits without some sort of bank account. Even basic bank accounts' charges seem just as punitive.

It seems to me that the fact is you do have to use products they offer - like it or not. Both government and employers have conspired to make this so - it saves them money and we, the bank customer, are effectively paying for what they are saving.

opinions4u

Consumerist wrote: »

Try telling an employer that you don't have a bank account to pay salary into. Try claiming benefits without some sort of bank account. Even basic bank accounts' charges seem just as punitive.

It seems to me that the fact is you do have to use products they offer - like it or not. Both government and employers have conspired to make this so - it saves them money and we, the bank customer, are effectively paying for what they are saving.

But to go overdrawn (an overdraft is a product) is a choice. You could choose not to go overdrawn.

Most people don't use an overdraft.

Gromitt

opinions4u wrote: »

But to go overdrawn (an overdraft is a product) is a choice. You could choose not to go overdrawn.

Agreed. I think I've paid the bank about £100 in charges over the last 15 years, and they've refunded that entire amount (the most I got in a single year was £50 of charges).

In return, I get interest on my savings and cashback on my purchases. Some banks, like Halifax, also decide to give me £5/month extra on top of my savings interest.

So in effect, the bank are paying me to be a customer, and I've no problem with that.

pinkdalek

Consumerist wrote: »

Try telling an employer that you don't have a bank account to pay salary into. Try claiming benefits without some sort of bank account. Even basic bank accounts' charges seem just as punitive.

It seems to me that the fact is you do have to use products they offer - like it or not. Both government and employers have conspired to make this so - it saves them money and we, the bank customer, are effectively paying for what they are saving.

You've missed my point. I am referring to the article, not being a complete ostrich and burying ones head in the sand and not having a bank account whatsoever.
You can quite easily have a basic bank account with debit card or even a basic savings account with ATM card facility which does not have overdraft facility and you can use this for payments such as salary/benefits to be deposited into.
It's up to you if you apply for an overdraft, you know the charges before you take it out, it's up to you if you want to let the bank pay your direct debits, you are aware of the fees incurred should payments not be made.

Just like if you drove at 40MPH in a 30MPH zone you are aware of the consequences, or if you park on double yellow lines.

innovate

Consumerist wrote: »

Even basic bank accounts' charges seem just as punitive

Which basic bank account charges you for receiving your salary/wages?

Of course, if you go overdrawn, particularly above any agreed overdraft, you pay. Which is fair enough - otherwise people would just get mindlessly overdrawn, and then not know how to pay back their debts.

Basil1234

just read the this thread how dare they make any money rofl
i'm a halifax customer always in the black with an arranged overdraft of £2500.
years ago i had a car have a cambelt snap was told cost £700 quid to sort final bill come to nearly £1400 unless i had that overdraft i would have been not able to go to work to earn money at all and would have had to use the credit card to pay and pay a hell of alot more, and there intrest rate which would have been 18.9% it doesn't take a rocket sciencetist to work out you borrow money it costs something and a bank would be cheaper over a credit card any day.

Now here is the key thing everyone has a choice whether to use this bank they can move if they want no one is holding a gun to there head, but i suspect the people that are moaning are the ones that are living near or in this bracket. I also suspect they would have fun moving to a new bank as you would have to go to a new bank laying it all out bare i want to be a new customer i come with £2000 worth of debt and bank asks are you in this debt often? they would have to answer errrrr well at least for last xx months. Banks will be checking those credit scores very carefully.
I suspect some people would be stuck till they get there debt down and there lies the problem some people are living constantly beyond there means which imho means they to look at what they really need and pay for and yes it will hurt them better than becoming a bankrupt though.
i have a friend at work just getting over a ccj from 5 years ago he is now in £3000 of debt atm with his own bank in an arranged overdraft and this is compared to running everything thru credit cards such as vanquis he had also helped his daughter out who was £5000 of trouble which he paid out in between as well, and slowly for him he is starting to get himself is some sort of order. so that not every dd he had charge after charge after charge where the money was not there.

YorkshireBoy

Basil1234 wrote: »

years ago i had a car have a cambelt snap was told cost £700 quid to sort final bill come to nearly £1400 unless i had that overdraft i would have been not able to go to work to earn money at all and would have had to use the credit card to pay and pay a hell of alot more, and there intrest rate which would have been 18.9% it doesn't take a rocket sciencetist to work out you borrow money it costs something and a bank would be cheaper over a credit card any day.

Your situation occured "years ago" (when the Halifax EAR was 15.9%?). If that situation were to occur now (or at any time since late 2009 when Halifax went to £1/day for authorised overdrafts) then the same borrowing would equate to around 26% APR.