Graduate account o/d reducement

Esoog

Greetings, opened the post today to find a letter from HSBC informing me they are going to reduce my graduate account interest free overdraft from £1500 down to £1000 in July, now that was of course expected..however for a start my o/d is actually £1600 (thanks £100 extension for a month they forgot to take off he he he) and I'm pretty sure that when I signed up for the graduate account (switch from student) it said it would be reduced by £250 a year? Ie down to £1250 first..?

Anyway, it says any overdraft you have above this interest free entitlement will be charged at the graduate rate (18.3% EAR var), now I've only just started working don't have any cash sat in the account plus the fact then all my wages from June are going to go on a holiday / other expenditure, so untill I build up a decent wedge of cash how much can I expect to pay on the overdraft? I'd expect come 15th July my balance will be about -£1400 something like that.

Any help appreciated.

Esoog

Infact I'm not sure I entirely understand this, currently I am lets say -£1600, if on the 15th July I have £200 in the bank (so £1400 of £1600) will my account then read £1400 (limit £1000) and I won't have any money available to spend? Because if I'm getting this right come the 15th of July I'm going to be totally totally skint untill the end of the month and even then I'll only have enough to pay my rent and thats it

Idiophreak

Just a tip (to be used with caution)...HSBC dropped my interest free portion exactly the same way...so I transferred the rest of it (the £1000-£1500 bit) onto a virgin CC at 0% - saved paying interest on it til finances settle down a bit

Esoog

oh wait, I'm getting this wrong again aren't I.. The interest free portion is going down to £1000. Right so the original question again (sorry about this folks!)
If I have £500 in non interest free overdraft at a rate of 18.3% EAR (whatever that is) what can I expect to pay say a month?
(Can you tell my degree wasn't in maths)


^ Tip above, sadly my credit rating probably wouldn't let me even look at a new credit card heh

roger_c

Hey there, I think it is 18.3%/12(months in a year) x £500. So therefore £7.63 of interest, but that is a guess, I'm sure there are more savvy people on here who can advise if I am right?

kittykate_2

Hey, Esoog, I'm thanking you because I too will probably receive the same letter in the next few days. I was bricking it because I thought that they would be reducing my overdraft to £1000 which I couldn't do financially right now (I'm about £1250 overdrawn and I don't get paid for 2 and half weeks). So they just charge you interest on the extra?
Thanks,

KKxx

Esoog

Yeah thats what I've gathered from the letter after a brief period of worrying ;d

kittykate_2

thank god, lol. i was pretty worried. was going to take a loan out for it