Natwest overdraft interest and charges

JEB192

I apologise if this is in the wrong place: please let me know and I will move it.

I have banked with Natwest for about 9 years and have two bank accounts, a select account with £50 overdraft and a graduate account with an £1800 overdraft. To cut a long story short, my problem is twofold.
Natwest informed me of the following via email:

That they are changing the charges on the select account: basically charging for anything and everything they can.

£6 Just for USING my overdraft, even though it's an authorised overdraft
19.89% interest on my overdraft balance
£6 for any direct debits that bounce
£6 PER DAY if my account goes over my agreed overdraft.

Furthermore, they have informed me via email that my graduate account will be changed to a select account on december 17th. So I will be charged 19.89% on my full 1800 overdraft unless I pay it all back, which I can't do.

Also the only time I ever go over my overdraft is when natwest takes out fees, so basically they cause the problem and then charge me £6 a day for it.

In light of this I would like to approach them and explain that the charges, on the graduate-!!!-select account in particular are unacceptable and will bankrupt me and I would like to make a payment arrangement to get the overdraft paid off without incurring any further charges. Two months isn't enough notice for me to pay such a large sum of money.

I don't want to close the accounts, but I can't afford to have my salary paid in there so I have opened a basic account with another bank which I will have my salary paid into if necessary. However this account doesn't allow standing orders or Direct Debits and I have to pay my rent by standing order, it's in my tenancy agreement.

Could anyone help me write a letter to natwest to see whether it's possible to freeze the interest and make a payment plan to clear my overdrafts? And does anyone have any experience contesting this sort of thing?

opinions4u

Post on the Debt-free Wannabe forum for the best help on this.

Atidi

JEB192 wrote: »

I apologise if this is in the wrong place: please let me know and I will move it.

I have banked with Natwest for about 9 years and have two bank accounts, a select account with £50 overdraft and a graduate account with an £1800 overdraft. To cut a long story short, my problem is twofold.
Natwest informed me of the following via email:

That they are changing the charges on the select account: basically charging for anything and everything they can.

£6 Just for USING my overdraft, even though it's an authorised overdraft
19.89% interest on my overdraft balance
£6 for any direct debits that bounce
£6 PER DAY if my account goes over my agreed overdraft.

Furthermore, they have informed me via email that my graduate account will be changed to a select account on december 17th. So I will be charged 19.89% on my full 1800 overdraft unless I pay it all back, which I can't do.

Also the only time I ever go over my overdraft is when natwest takes out fees, so basically they cause the problem and then charge me £6 a day for it.

In light of this I would like to approach them and explain that the charges, on the graduate-!!!-select account in particular are unacceptable and will bankrupt me and I would like to make a payment arrangement to get the overdraft paid off without incurring any further charges. Two months isn't enough notice for me to pay such a large sum of money.

I don't want to close the accounts, but I can't afford to have my salary paid in there so I have opened a basic account with another bank which I will have my salary paid into if necessary. However this account doesn't allow standing orders or Direct Debits and I have to pay my rent by standing order, it's in my tenancy agreement.

Could anyone help me write a letter to natwest to see whether it's possible to freeze the interest and make a payment plan to clear my overdrafts? And does anyone have any experience contesting this sort of thing?

A DD should only bounce if you attempt to spend money you don't have (or spend more than the authorised overdraft facility you have been granted)

You shouldn't get into an unauthorised onverdraft unless the bank pays the transaction you authorised despite you not having the required funds (or authorised credit) available to honour it.

So management of your money is the way foward.

Not having your income being paid into the bank with all these outgoings on will not help you, so I suggest transferring your income back to this bank. Then close the account you no longer need as having more than one bank account obviously isn't helping you manage your finances either.

What do you want to contest? Are the fees and charges not in line with what you have been advised? Were you not given the chance to close the account (paying off any debt first) if the fees have changed and you don't wish to accept such revised charges?

If the overdraft is not being repaid quickly as it is intended, speak to the nbank about a possible loan. I'm sure they could probably offer you something cheaper than even the 19.89% they charge for the authorised overdraft

Overdrafts are not intended for long term continuous lending and are expensive if you use them that way.
Think of them as a payday loan, but a lot cheaper. And see what Martin has to say about pay day loans!

pmduk

JEB192 wrote: »

Also the only time I ever go over my overdraft is when natwest takes out fees, so basically they cause the problem and then charge me £6 a day for it.

They notify you in advance of the charges, it's hardly their fault if you haven't planned for them.

brendon

This is why student and graduate accounts exist and are so generous. They lure you into "free" debt, and then they turn up the interest rate.

innovate

JEB192 wrote: »

basically they cause the problem and then charge me £6 a day for it.

The root cause do the problem is that you are spending more than you can afford, and that you appear to have ignored the charges that are part and parcel of overdrafts.

As has already been suggested, go the to debt free wannabe board for suggestions how to get yourself into a more comfortable financial position.

BMN

brendon wrote: »

This is why student and graduate accounts exist and are so generous. They lure you into "free" debt, and then they turn up the interest rate.

That isn't really the case though is it?
With a student account you might get an interest free overdraft so that you get some extra flexibility as a student (where student maintenance loans etc. don't cover the cost of living).
Then when you graduate and your account is converted into a graduate account they reduce your overdraft in increments so the overall aim is to pay it off.

opinions4u

brendon wrote: »

This is why student and graduate accounts exist and are so generous. They lure you into "free" debt, and then they turn up the interest rate.

No.

You get in to free debt as a student.

They then give you a couple of years to get out of it before they start charging you.

There's a clearly marked timetable for you to get out of overdraft without paying a penny.

It's a choice.

JEB192

I asked for help writing a letter to the bank, because I don't think two months was adequate warning that the terms were going to change, if nobody was able to help with this, that's fine, but the 'advice' I have received was clearly not intended to help me, you just wanted to be unpleasant to someone asking a genuine question to make me feel small for not having perfect finances.

Thanks innovate and opinions4u for directing me to the right board.

John1993_2

The advice was good, it justo wasn't what you wanted to hear. The charges seem fair, as does the notice, so as advised above, very careful money management is the way forward.

opinions4u

JEB192 wrote: »

I don't think two months was adequate warning that the terms were going to change

The nature of a Nat West Graduate account is that they tell you at the outset when interest free periods expire. I think it's up to two years of no interest these days, three years on older accounts.

As for two months, the law of the land (as directed by the EU) states that two months notice of detrimental contractual change is required. The bank have complied with this, so any complaint on this front will fail.

Again, whether or not you like the charges, they are legal. So while complaining is allowed, it won't achieve any change.

DFW board will support you in finding ways to handle any debt and the bank. Make sure you fully understand the potential impact on any action on your credit file before you take it. It could take six years to recover from what may (or may not) be a short term issue.

If you can fix the problem by spending less on other things (or earning more) this may be preferable.