Will I get charged to decrease my overdraft??

Scuff

Hello All,

I'm in the process of paying off my overdraft with HSBC, but I was thinking to prevent temptation from coming knocking it might be more sensible for me to reduce my overdraft as it reaches certain points. They do charge me £25 every year to tell me they're keeping my limit the same, so am I subject to charges every time I reduce my limit??

Thanks, Scuff

jpb77

I do not seeing anything here in the charges explained section and why are they charging you £25 to inform you they keeping the limit the same? What type of account do you have with them?

http://www.hsbc.co.uk/1/2/overdrafts/overdrafts-charges

http://www.hsbc.co.uk/1/2/overdrafts/details#cost

callum9999

That seems to go directly against their overdraft policy:

"We won't charge an arrangement fee if we haven't agreed to a formal or an informal overdraft request from you within the last six months"

Unless you keep changing your limit, you shouldn't be getting any arrangement fees (what I assume the £25 is).

jpb77

Looks like a refund is on the OPS way!

Gromitt

With some banks, reducing your overdraft means cancelling your current overdraft and setting up a new one, possibly involving a credit check.

So it might make more sense to wait until you paid it off in full before asking them to cancel it.

Scuff

Thanks for all your help guys!
It's just a current account, evolved from a graduate account around 2 years ago. They've done it every year for as long as I can remember, and my boyfriend is with HSBC too, I asked him and he said they do the same to him. I would imagine that reducing it would qualify as changing my limit, and so incur the £25 fee? I'm so confused haha

CLAPTON

if you can't trust yourself not to overspend then wouldn't it be a bit mad to reduce the OD limit and risk a penalty for going over the lowered OD limit and maybe damaging your credit rating?

callum9999

Scuff wrote: »

Thanks for all your help guys!
It's just a current account, evolved from a graduate account around 2 years ago. They've done it every year for as long as I can remember, and my boyfriend is with HSBC too, I asked him and he said they do the same to him. I would imagine that reducing it would qualify as changing my limit, and so incur the £25 fee? I'm so confused haha

Well it would, but you're meant to be allowed 1 free request a year - so I have no idea what's going on with your account. Maybe there was some kind of glitch from when it used to be a graduate account (though again, I don't think they should be charging you for an automatic renewal of the overdraft every year anyway), or as it's happening to your boyfriend as well, maybe it's standard procedure to put you onto a non-standard account?

The only thing you can do is call them to see exactly why they are charging you those fees, and if they have a set of t&c's letting them do so, try and convert it to their standard current account without the fees.

And as CLAPTON said, I would personally not gradually reduce the actual limit, just use restraint. They were a bit flippant about it (presumably you feel you won't go over your limit, but if you have too much leeway between your target and your limit you'll be too tempted to spend the difference?), but if you will indeed be charged £25 each time then you'll just have to try harder not to spend it!

anselld

jpb77 wrote: »

I do not seeing anything here in the charges explained section and why are they charging you £25 to inform you they keeping the limit the same? What type of account do you have with them?

http://www.hsbc.co.uk/1/2/overdrafts/overdrafts-charges

http://www.hsbc.co.uk/1/2/overdrafts/details#cost

Arrangement fee applies to more than one "request" in six months.
"Request" includes each time you accidentally exceed your limit.

OP if you never exceed your agreed overdraft limit you should complain about these charges. If you are struggling to stay within limit then as posters above have said it is better to retain the existing limit and apply self discipline until it is cleared.

Scuff

It's not the account I'm currently using, and the problem is mainly although I won't be tempted to spend on it on a regular basis (I'm desperate to get rid of it!!!) I am worried that if a big expense comes up I may see that I have hundreds of spare pounds free and ruin all my good work. The other reason is I thought it might be good for my soul to see the total limit decreasing.
I'll just give myself a good talking to, it might do me in the long run to have some restraint and self control. (OH has just very nicely said 'if you had any self restraint you wouldn't be in this situation' :rotfl: he has a point)