Anyone else received a Halifax letter about removing overdraft facility

Jaxer

I've had a Halifax Rewards Account for about 2 years which had a £1,500 O/D facility until about 3 months ago when I called them to reduce this to £500. The reason for this was in advance of applying for a mortgage so I wanted to reduce my "available credit" profile across all my accounts/cards - especially as I've never actually made use of the overdraft at all.

Today, out of the blue, I've received a letter from Halifax advising me the O/D will come to an end at the of January 2014 ".... based on what we know of your finances".

However, there have been no changes I can think of over the past 9 months (at least) in terms of new account applications or credit cards. I have no other credit/loan balances outstanding and the card I use for "daily" spending is always paid off in full every month. If anything, my finances have improved significantly with savings etc (although these obviously won't show up in credit scoring). I also haven't yet made any mortgage applications so this won't be a factor.

It's not something that will impact on me as I don't actually use/need the O/D (it was always a contingency buffer) so I'm not too bothered about it disappearing. But I am curious why, has anyone else received a similar letter?

opinions4u

They send out thousands of them every month.

BonkersBonkers

Phone them and ask for the facility to be renewed.
Unless there is derogatory data on the CRA database or you have abused the facility with any Lloyds banking group company - I don't see there being a problem.

DevCoder

They are doing this because they want to increase their liquidity ratio. Ie assets versus liabilities.

If you are not using the overdraft it is still treated as a contingent liability on their (off) balance sheet, as you could draw the funds down in a day (ie utilise the overdraft). Thus the full amount has to go in their "sight" (0 day) reporting. The more credit lines such as overdrafts they remove the better they appear liquidity wise.

Obviously unused overdrafts are the easiest for them to target.

Roland_Sausage

They recently cut mine from £2500 to £1150. It was unused anyway and probably cut for the reasons mentioned above.

anotheruser

Does having no overdraft make you more likely to get a better mortgage?

typistretired

I know this subject is off topic but out of curiosity did the letter have a Halifax letter head. Why I ask - we received a letter from Bank of Scotland referring to a joint account with my husband. When I checked the account number online it was actually our Halifax joint account. Just wandering if they are removing the Halifax name now and replacing with Bank of Scotland.

Staying on subject our letter from them came early last year withdrawing the overdraft facility. We thought it was because we never used it and only keep a £1 in the account.

Just_Want_to_Live_Life

I had exactly the same thing and have pm'd you

opinions4u

typistretired wrote: »

I know this subject is off topic but out of curiosity did the letter have a Halifax letter head. Why I ask - we received a letter from Bank of Scotland referring to a joint account with my husband. When I checked the account number online it was actually our Halifax joint account. Just wandering if they are removing the Halifax name now and replacing with Bank of Scotland.

Staying on subject our letter from them came early last year withdrawing the overdraft facility. We thought it was because we never used it and only keep a £1 in the account.

More likely somebody put the wrong paper in the printer.

typistretired

opinions4u wrote: »

More likely somebody put the wrong paper in the printer.

Threw me a bit as couldn't remember applying for a Bank of Scotland joint account.

lifestoogood

Worryingly I've received a letter this morning dated 30th December withdrawing my overdraft of £2000 in full!!! With only about 2 weeks notice from today!

Called them up and apparently they can't do anything into the day after which is going to cause me huge financial issues with the potential of bankruptcy.

Any suggestions?