Is this common nowadays?

Better_Off_1983

Out of interest....

I work in finance - where I assist people with their debts.

With alot of the calls I make, I have to ascertain the reasons as to why the customers have defaulted on their payments and I have had quite a few people state that their overdraft facilities have been withdrawn.

I have an overdraft myself, it is always reviewed every year. I have never been over the limit, had bounced standing orders or direct debits.

Have you or are you having your overdraft taken from you?

If so, has your bank advised you why?

My overdraft comes up for review in October, so I am hoping it is not withdrawn from me.

Thanks

jonesMUFCforever

Banks withdraw overdrafts for a variety of reasons mostly when customers abuse the facility.

Gromitt

I have a £250 overdraft, and every year it is renewed. Never used it, but I do see in the T&Cs that 'excessive usage' could mean withdrawal of the facility or a £20 charge at renewal.

I'd imagine overdrafts are probably one of the first things to get hit once someone enters financial difficulty, then they start defaulting on other payments.

JuicyJesus

If someone appears to be intent on using their overdraft as a loan that never gets repaid, often the bank will withdraw or reduce it in order to reduce their exposure. This has the effect of either getting the customer to pay it all back immediately or to enter into an arrangement with the bank to pay it off over time. Either way it gets a*ses into gear and gets the debt repaid, rather than being static.

pmduk

Just reading this forum, there is rarely a week without someone complaining that their overdraft has been withdrawn, sadly many people see them as a right and persist in living in them. I suspect they should see themselves as already in problems, not the withdrawal of an overdraft causing a problem.

exel1966

Overdrafts are there as a short term facility ONLY. They are not designed for longer term lending nor to be permanently be at the limit. This is why they are repayable on demand meaning if a bank wishes to withdraw, it can do, but as already pointed out, it's usually those who abuse/mismanage their account who have them withdrawn.