Overdraft Charge increase

Snow2013

I didn't know where to post this,but i wondered if anyone can help...I had always banked with Alliance and Leciester until Santander took over,and i had an £800 overdraft,which i maxed and have never been able to clear properly..when A&L were my bank the Monthly charge was £5,now it has crept up to £20 a month..Is that legal,as i think i will be paying Santander £20 a month for the rest of my days for £800,if it is then i just have to lump it,but thought i would ask...

dunstonh

when A&L were my bank the Monthly charge was £5,now it has crept up to £20 a month..Is that legal

yes it is.

as i think i will be paying Santander £20 a month for the rest of my days for £800,if it is then i just have to lump it

pay it off or move banks.

LeeSouthEast

Entirely legal. However have you considered switching banks and taking your OD with you to somewhere more reasonable? Although £5 seems quite low for an £800 overdraft so I'm not sure how much better you'd fair elsewhere.

Pop over to the Debt Free Wannabe board and ask for help if you'd like. We'll gladly rip your Statement of Affairs to shreds and help you find extra cash to start getting this paid off and out of your hair.

TheMoney

£20 for £800 is fairly reasonable compared to what some places charge. Your best options are looking into other banks and seeing if they can provide you with the same overdraft at a lower rate, but I wouldn't hold too much hope. The T's&C's of most bank accounts have clauses stating changes can be made providing sufficient notice is given.

jamesd

It's legal but £20 a month on £800 borrowed is equivalent to about 30% APR on the money borrowed. What that means is that you can probably save money by using mainstream credit cards for some spending even if you can't get a 0% for purchases card. Just be sure that you leave in your current account any money you spend on the card, else you'd just make the problem worse. The first challenge will be to completely eliminate the overdraft use by getting enough on the card so you never use the overdraft. That might take a month or three, depending on how much of your spending you can get on the card.

If you can't do that or just prefer to do something else, Nationwide offers a deal with a 0% overdraft for 12 months. Then 50p per day for overdraft use, which might be cheaper than what you're paying now, particularly if you're only overdrawn for some of the month.

Santander offers personal loans at 18.9% APR for 60 months with a monthly repayment of £25.09. So another option is to apply for one of those then if accepted pay off the overdraft and overpay by £200. That would reduce the monthly payment to about the £20 you're paying in overdraft fees now and the debt would eventually be gone. With no overdraft use you'd eventually find it easier to get good credit card deals if it's blocking you from getting them now. or overpay by only £100 and ensure that you never go below £100 in credit at the end of the month, using that £100 as a safety margin to protect you from overdraft charges.