Opinions please (overdraft query)

inthedeep

Hello,

First of all please excuse me if I'm writing In the wrong section; I'm new and still learning the basics of the forum.

My question is simple really; is it possible for a bank to mis-sell or mis-apply an overdraft facility?

My scenario is as follows:-

I earn 1.2k after tax, NI, Pension and student loan. Up until July 2012 I had no overdraft, however owing to moving house I decided to get a £500 limit to use as a buffer. Over Christmas and New Year, and through my own admission, I went a bit spend crazy and extended my limit a number of other times leaving me now with a limit of £1,750.

I only earn 1.2k per month after deductions; yet my OD is 1.75k and I have a suspicion I could increase again should I want to (FYI, I do not want to, lol).

Comments would be great thanks xx

matttye

An overdraft is a short-term loan and repayable on demand, but there's no rule stating it must be repaid in full every month. In fact, banks will prefer it if you're more into your overdraft because they'll charge you more interest.

I don't think giving you an overdraft of more than your monthly wage is mis-selling in any way, shape or form.

212

My monthly wage is slightly less than 1k, with a £250 bill for petrol, and my overdraft is 5k.... When I go back to uni I'll be on even less in theory (but be better off).

It's helped me massively with rent etc at times, but there is the risk it can be pulled (and after reading some horror stories I'm very aware of that!). That's why I'd never get my income paid directly into it - I'd rather default than be in a situation where I'm expecting money and suddenly can't get to it.

I don't think mis-selling can be blamed though. The banks should make it quite clear the overdraft is short term and can be recalled etc. I'd just try to pay it back at the cheapest rate possible.

Out of interest, which bank is it with? I know Natwest for instance have a ridiculous long script before they will give an overdraft (certainly on the student accounts), and that would cover them

pmduk

OP, you were the one that kept asking for an increase, possibly, the bank shouldn't have granted it, but you must bear the main responsibility for asking for and then using the increased limit.

lippy1923

Your post implies you are in debt and looking for a way to possibly blame your bank for letting you go so overdrawn, at your request.

Your question has been answered and advice has been given. It may not be what you wanted to hear but it's the truth.

inthedeep

Obviously you don't know how her bank works.

Anyway, I'm bored of people jumping on the bandwagon now...I appreciate the fact the majority of you have responded to genuinely offer advice, however to the minority go and find someone else to belittle.

fiesta04

Having read and re-read this thread, I would say no one has been nasty or rude in any way. The answers have been truthful and honest.

On reading your other posts, I feel you are in a reasonable position to clear your debts easily in the near future.

Just a word of advice, do not reduce your OD limit until you have repaid it, as it will impact on your credit rating.

Good luck and please remember most people on this website try to help.

F4

The_pc_tech

I don't think you have been missold, I think as you say you just went a bit mad and lived beyond your means, I did this myself some time ago and ended up in a situation where I see-sawing between being 500 quid in debt to the bank (I had a 1k OD limit at the time) when all my bills were paid until my salary got paid in which would clear the OD and then the process would start again.

If you have any credit cards that you are paying over the minimum payment on reduce the payment to the minimum so that it reduces your outgoings a little bit and knock any account packages on the head.

Check for cheaper utilities such as phone, mobile and broadband.

Knock going out on the head for a while if you do that regularly and just don't spend on anything that's not essential.

This is how I managed to get out of the situation I found myself in.

inthedeep

fiesta04 wrote: »

Having read and re-read this thread, I would say no one has been nasty or rude in any way. The answers have been truthful and honest.

On reading your other posts, I feel you are in a reasonable position to clear your debts easily in the near future.

Just a word of advice, do not reduce your OD limit until you have repaid it, as it will impact on your credit rating.

Good luck and please remember most people on this website try to help.

F4

Thank you for your reply, which I honestly appreciate.


I think had the offending respondee not continued his/her tirade of what he/she believes is useful I wouldn't be feeling so seething right now...not to mention the small army of people who have apparently 'jumped on the bandwagon' having their say.


Maybe I'm being a bit sensitive and, on reflection, maybe I should just stick to using the 'Debt Free Wannabe' part of the site seeing as at the top of the forum it advises about being helpful and not judgmental.


I am not seeking a way to not pay my debts at all, if I owe it...I pay it. I was just wanting to know if they had mis-applied the overdraft (maybe mis-selling has caused confusion) to someone who couldn't afford to pay it off on demand.


My credit file is spot on at the moment, which has surprised me in one regard but not in another; although I owe money I pay back on time. I just need to learn to budget (which I am doing by keeping a budget diary) and live within my means a bit better.


Anyway, back to 'Debt Free Wannabe' it is for me.


Chow and, once again, thank you to the people who have read my thread for what it is...not what you have construed (incorrectly, may I add) it to mean.


L x

BugsyBrowne

I've deleted my posts as I believe I was being judgemental and I didn't even read your first post but joined the thread on the last 2 posts.

Try and ignore many posters on here as they're not worth arguing with.

You'll get better replys on the DFW boards.

fiesta04

BugsyBrowne wrote: »

I've deleted my posts as I believe I was being judgemental and I didn't even read your first post but joined the thread on the last 2 posts.

Try and ignore many posters on here as they're not worth arguing with.

You'll get better replys on the DFW boards.

Bugsy, unfortunately this is your norm.

F4