Natwest to start charging when you use your overdraft?

queenlizard45uk

Hi all,

Ive had a letter from Natwest explaining to me that from 12th July 2013, I will be charged £6 a month for using my agreed overdraft (which is £100) PLUS interest!

I asked for an overdraft afew months ago, due to being scared of direct debits coming out and not having enough money to pay for them. £100 overdraft has been a massive help for me and since Ive had it, ive had to use it every month - even for afew pounds!

What does anyone recommonend?

Ive been with Natwest all my life (im 26) and dont have another bank account with anyone.

Should I move to another bank? Any suggestions?

xx

innovate

First Direct might give you a £250 free overdraft. That offer has been running for ages. You get the overdraft if they give you a current account. If you play your cards right, you can also get one-off £100 for singing up (see their website/other threads).

Nationwide FlexDirect might give you a free overdraft but for a year only. I think there's a £70 offer via Quidco at the moment if you switch to them.

All banks can call in overdrafts at any time they like, so it can be risky to rely on them.

If you only need to dip into your overdraft by less then £100, you stand a good chance to live without an overdraft. Do a couple of frugal months, and build yourself a £100 buffer from your own money. I.e. try to always have at least £100 in your account.

Southernman

The first £10 of your overdraft with Natwest you don't get charged under the new scheme so if you go in by a few quid you won't be hit.

chambta

queenlizard45uk wrote: »

Hi all,

Ive had a letter from Natwest explaining to me that from 12th July 2013, I will be charged £6 a month for using my agreed overdraft (which is £100) PLUS interest!

I asked for an overdraft afew months ago, due to being scared of direct debits coming out and not having enough money to pay for them. £100 overdraft has been a massive help for me and since Ive had it, ive had to use it every month - even for afew pounds!

What does anyone recommonend?

Ive been with Natwest all my life (im 26) and dont have another bank account with anyone.

Should I move to another bank? Any suggestions?

xx

Most banks will charge for the overdraft one way or another - it wouldn't suprise me if those that haven't already changed their pricing do in the medium term.

Simple advice would be if it's such a small overdraft you have two months to avoid going over £10 into it and you will receive no charges at all.

Gizmo247

innovate wrote: »

First Direct might give you a £250 free overdraft. That offer has been running for ages. You get the overdraft if they give you a current account. If you play your cards right, you can also get one-off £100 for singing up (see their website/other threads).

... and don't worry if you can't carry a tune just make up for it in volume. Either way FD are pretty flexible.

opinions4u

I recommend not going overdrawn.

queenlizard45uk

opinions4u wrote: »

I recommend not going overdrawn.

In an ideal world, I would not want to be overdrawn, but things happen. My hours in work have been cut, so struggling and an overdraft is a slight help incase a direct debit Ive forgotton about comes out.

GQsm

I am appaulled by this. It's basically a £6 fine for using your arranged overdraft nevermind you then have to pay 19.89% EAR interest on it.

Will be looking to change my current account as I use my overdraft around 5 out of 12 months a year.

ERICS_MUM

GQsm wrote: »

I am appaulled by this. It's basically a £6 fine for using your arranged overdraft nevermind you then have to pay 19.89% EAR interest on it.

Will be looking to change my current account as I use my overdraft around 5 out of 12 months a year.

it's not a fine, it's a FEE.

guesswho2000

queenlizard45uk wrote: »

In an ideal world, I would not want to be overdrawn, but things happen. My hours in work have been cut, so struggling and an overdraft is a slight help incase a direct debit Ive forgotton about comes out.

Agreed. Not for the same reasons, as I ensure I'm nearly £100 overdrawn per month on my 2x NatWest and 1x RBS accounts, as it's cheaper than using my own money.

However, a £6 charge for use on top of the interest isn't good. That said, overdrafts these days are not a nice way to borrow - they used to be comparable to a high rate credit card, but the fees these days (unless you have a massively overdrawn balance) mean it's not a good strategy.

Also, as always, they're repayable on demand...OP - how difficult would it be to build up a small cushion to keep you out of the OD in the next two months until they begin charging? If this isn't possible, then what's your credit rating like now? There may be a better solution in the longer term.