MSE News: Warning over student overdraft rises

Former_MSE_Helen

"Students must apply for overdraft increases on certain accounts, even where the guaranteed maximum rises ..."

Read the full story:

Warning over student overdraft rises

choc_mouse

Warning? Not really - a bit of a non-story. It was like that when I was a student 10 years ago.

At least on Natwest's student account webpage, the main terms of the overdraft is listed in plain English. So they're not hiding the fact that you need to apply for the higher limits only in the small print.

Overdraft
-Extra breathing space for your finances – you can apply for an interest-free overdraft of up to £1,000 in your first year.
-We normally offer an overdraft limit of £500 in your first term, £750 in your second term and £1,000 in your third term.
-You can then apply for an overdraft up to £1,250 in your second year, £1,500 in your third, £1,750 in your fourth and £2,000 in your fifth.

I don't think they ever say it's guaranteed either, otherwise that's irresponsible lending. For example, under Co-op's guarantees, an overdraft is not listed.

What was the point of that story?

Plxply

choc_mouse wrote: »

I don't think they ever say it's guaranteed either, otherwise that's irresponsible lending. For example, under Co-op's guarantees, an overdraft is not listed.

On the Co-Op page for the student account it doesn't mention at all that you need to apply for an increased overdraft each year, the only small print is that you must deposit £300 to get it.

http://www.co-operativebank.co.uk/servlet/Satellite/1193206375478,CFSweb/Page/Bank-CurrentAccounts

choc_mouse

Then it's just co-op? Actually, from the wording:

...but an overdraft limit that rises each year to take the pressure off your finances...

This kind of implies it's automatic. Where in the T&C's, as the news article claims, that an increase needs to be applied for at the end of each year? (Not that I know how the co-op account works but I'm not impressed with this particular MSE article.)

Anyway, I suppose the point of the story should be to check your student overdraft limit (or "available balance") before spending what you think you have!

That's all part of the student experience and learning how to manage your own life and finances.