Natwest Overdraft Charge Changes

_andrewstewart

Hi guys, I've just got an email from Natwest that has me very anxious regarding charges of my overdraft.

"We'd like to let you know about some changes we are making to the overdraft charges on all our current accounts from 12 July 2013.

As you have a Graduate Account, the change that will affect you is summarised below. We've also provided some useful tools and tips to help you avoid or minimise overdraft charges.

If you exceed your arranged overdraft limit, or don’t have one in place, there will be a new fee of £6 per day if you go into an unarranged overdraft by more than £6. (Up to a maximum of £90 per monthly charging period.)"

It also links to this document:

eml.natwest.com/images/661/NW_CAPPA_NOV_90284454.pdf

I have a graduate account and have always been in my overdraft (originally interest free, up to £2,000) since starting university, I've been out of uni and in work for 3 years now, but have been unable to claw my way out (low paid job, family to provide for, fiancee on maternity leave etc). The 'interest free-ness' has been removed since graduating, but the amount I pay is small.

Am I right in thinking (hoping) that this overdraft is still classed as 'arranged' even though it is no longer interest free? So I won't be charged £6 a day for essentially using -2000 as my 'zero'? I'll just continue to pay the small fee I am currently?

I know I should really have made a better attempt at working my way up to having no overdraft, but that's just been impossible in my current circumstances.

Thanks

melj16

correct - you have an arrange overdraft, you would only be charged £6 per day if you exceeded it and were consequently in an 'unarranged overdraft'

you will however be charged a monthly fee of £6 to use your overdraft as well as the interest charged for the amount you use and the length of time during the month that you use it for

Hope this helps

phona

melj16 wrote: »

you will however be charged a monthly fee of £6 to use your overdraft as well as the interest charged for the amount you use and the length of time during the month that you use it for

The £6 per month is the arranged overdraft fee and does not apply to graduate accounts.
The change to your account is that if you exceed your £2000 arranged overdraft by £6 you will be charged £6 per day. So cutting through the banking waffle, if your account gets to -2k and stops there, you'll just pay interest.

melj16

phona wrote: »

The £6 per month is the arranged overdraft fee and does not apply to graduate accounts.
The change to your account is that if you exceed your £2000 arranged overdraft by £6 you will be charged £6 per day. So cutting through the banking waffle, if your account gets to -2k and stops there, you'll just pay interest.

If you read the original post you will realise they no longer have a graduate account which means they WILL pay the £6 monthly overdraft usage fee in addition the interest

savethestudent_2

The graduate account is changing to an UNPLANNED overdraft facility from July 2013. The e-mail does not specify this but the terms and conditions do. This means that for anyone with a graduate account more than £6 overdrawn they will charge a maximum of £90 per month (maximum of 15 charges per billing period). I am not sure if anything can be done about this or whether other banks already hold this practice but I think there are going to be a lot of very unhappy graduate account users who have reached there full limit and will now be paying £90 every month before they have even begun to clear off the balance. Very dissapointed with Natwest.

stclair

savethestudent wrote: »

The graduate account is changing to an UNPLANNED overdraft facility from July 2013. The e-mail does not specify this but the terms and conditions do. This means that for anyone with a graduate account more than £6 overdrawn they will charge a maximum of £90 per month (maximum of 15 charges per billing period). I am not sure if anything can be done about this or whether other banks already hold this practice but I think there are going to be a lot of very unhappy graduate account users who have reached there full limit and will now be paying £90 every month before they have even begun to clear off the balance. Very dissapointed with Natwest.

The easiest way to avoid such charges would be not to go overdrawn.

savethestudent_2

For people who are already overdrawn this is not an option is it?

As the graduate account is classed as an unplanned overdraft the fees will apply to the balance (-£2000 usually) not anything over that limit as with the agreed overdraft.

melj16

savethestudent:

Just wondering where this information is from?

A graduate account has that overdraft limit whilst classed as a graduate, after two (maybe three) years you are no longer classed as a graduate and therefore the overdraft is to decrease, not all at once, but staggered over time.

The graduate will always be given notice for when the limit is to decrease. and as long as they live within their agreed limit, will not be receiving £6 per day charge for being in unarranged overdraft (max £90 per month)

miss_emmajane

My OH had a student account with Halifax and when it switched to non-interest free the interest was about £60.00 a month which made it harder to bring it down well each month. After a couple of months we decided to swap it to a loan and we now pay it off each month which of course has interest added but worked out less than the way we were paying it off before - it would certainly work out cheaper when these new charges come in!

savethestudent_2

Hi melj16

I got this from the terms and conditions sent to me by Natwest. I am waiting for my student account to switch over to a graduate account so not yet referring to the decrease in limit.

I made a call to them this morning and they cleared it all up for me (much to my relief)!

You are correct and interest will only be charged when you exceed your current graduate overdraft limit (so mine is £1800, anything £1806 or more they will charge for). They agreed with me that the information sent out is misleading as it reads as though you will be charged for using the overdraft facility itself and not anything exceeding the amount you have been given.

Sorry for any confusion

I have made a plan to clear mine within a year anyhow so should be overdraft free fairly soon.

phona

melj16 wrote: »

If you read the original post you will realise they no longer have a graduate account which means they WILL pay the £6 monthly overdraft usage fee in addition the interest

I did read the original post which said "I have a graduate account" so I put forward the terms of the graduate account!
Are you saying the OP does not have a graduate account? Does the graduate account cease to be a graduate account when the interest-free overdraft runs out? In that case, I agree that the OP will have to pay the arranged overdraft fee, assuming it became a Select account.
I haven't actually got a copy of the full Ts & Cs for the graduate account (since mine is still a student account) so I assumed from what the OP said that the account continued to be a graduate account after the interest-free overdraft had expired.

In the interest of clarity for the OP and anyone who finds this thread and is also confused:

• If your account is officially a graduate account, you will not be charged the £6 per month fee for the privilege of using your arranged overdraft.
• If your account is a Select or Select Silver account you will be charged that fee.

Unless anyone disagrees..?