overdraft

ang9798

Hi, I have just changed bank accounts from Halifax where I was getting charged a pound a day on my £500 overdraft (which I am struggling to get out of at the moment) to Nationwide which charges 18.9% aer after 3 months, but does this work out cheaper than the pound a day fee?? Im hoping I will have it cleared in the 3 month free overdraft period but just incase.

YorkshireBoy

In 18.9% EAR, the 'A' stands for annual.

So £500 for a year would cost you £500 x 18.9% = £94.50

Even if you'd a static £500 debit balance for 3 months (I'm guessing it'll return to credit at some point in the month?), the cost would be...

£94.50 / 4 = £23.63 (that's less than a month's fees with Halifax if you're permanently overdrawn).

But the time to ask this question would/should be before you apply elsewhere, not after surely? What if you'd have been worse off?

innovate

Which Nationwide account did you go for? FlexDirect is offering 12 months free overdraft (not sure how much they will give you).

ang9798

Yeah I applied for the 12 month free account but you have to have a thousand pound going in per month so I just have the basic flex account, and I took it out so I could have the 3 month free and I assumed it worked out better than the pound per day charge but wanted to check whilst im still within the cancellation period

w81

ang9798 wrote: »

Yeah I applied for the 12 month free account but you have to have a thousand pound going in per month so I just have the basic flex account

I don't understand this - on the main article (10/4/12) it says for the Nationwide FlexDirect: "There's no minimum monthly income needed to get the 12 month 0% overdraft, however, if you pay off your overdraft and get into credit, then you need to pay in £1,000 monthly to get any interest paid on your balance."

Was this the reason you were given by Nationwide then? Thanks for sharing your experience - me and my wife are looking to move banks from Santander but I don't think she pulls in £1000 each month.

Will

w81

Just applied online and saw this at the bottom:
"*How it works: Pay in at least £1,000 per month (excluding internal transfers) and we'll pay you 5.00% AER (4.89% gross p.a.)on the first £2,500 of your balance each month. At the end of the first year the rate will revert to 1.00% gross p.a./ AER (variable). If you pay in less than £1,000 per month then no interest is paid for the relevant monthly period."

So if you can't pay in £1000 then you don't get interest added for amounts in credit for, but doesn't mention about not having the 0% od fee. Have I misunderstood what you were asking?

Will

Herbalus

will.moindrot wrote: »

Pay in at least £1,000 per month (excluding internal transfers)

You don't have to pay in £1000 in one transaction. You could in theory make 5 x £200 transactions with the same £200, transferring it in and out of Nationwide to another bank.