MSE News: Barclays to revamp current account fees – will you be better off?

Mushisushi

innovate wrote: »

I thought most banks have moved to stating daily amounts rather than APRs since people had complained they can't understand APRs?

And used it as an excuse to rip their customers off a little bit more.


Call me cynical, but have Barclays Customer Services infiltrated MSE?

innovate

If it helps you: I am not working for Barclays (or any of the others), never have and never will. I also don't hold any of their shares, so have absolutely no interests to declare.

This doesn't mean that I don't fail to see where the rip-off or other problem is. People have complained for years that they don't understand APRs. Now they have numbers, and if Barclays are to be believed, a lot of their customers will be better off. In fact, we had at least one poster confirming just that (although somewhat unwittingly).

All Barclays customers had at least 2 months to respond to the changes. Barclays have offered to turn overdrafts into much cheaper loans, people could pay off their overdrafts and/or move their accounts elsewhere if they wish, people could try 0% balance transfer cards, work more, spend less etc etc.

What some people seem to forget is that overdrafts are not guaranteed and can be called in in full at any point in time. This has been so ever since overdrafts first became available. It beats me why anyone would want to permanently live in their overdraft, and why they wouldn't use a much cheaper bank loan if they need to spread the repayment if a debt over a long period of time.

Herbalus

innovate wrote: »

I thought most banks have moved to stating daily amounts rather than APRs since people had complained they can't understand APRs?

Yes, that's what I thought too. Then M&S introduced a current account with 15.9% EAR and Tesco released a current account with 18.9% EAR, and I had to think again.

BillJones

Herbalus wrote: »

Although the fees are clearly explained, one of the issues with this new fee structure is that it is more difficult to compare with other banks. If you ask the average person on the street to compare 50p/day or 18.9% APR, they'll most likely not know.

That's another obstacle to overcome for those who want to switch banks. A daily fee or %APR will be cheaper depending on how long someone is overdrawn and by how much.

Yes, if you are innumerate then simple daily issues such as this can cause problems. In that case it makes even more sense not to borrow money. A great rule in life is not to use any service if you can't work out what it costs.

Herbalus

BillJones wrote: »

Yes, if you are innumerate then simple daily issues such as this can cause problems. In that case it makes even more sense not to borrow money. A great rule in life is not to use any service if you can't work out what it costs.

It's not about being innumerate, or being unable to work out what it costs. It's about being time-consuming to compare two different systems.

If I want to compare 18.9% EAR with 50p/day, I need to ask a number of questions such as how much I am overdrawn, and how long for, and then do calculations. Comparing 50p/day with 55p/day, or 15.9% with 16.2% is obvious on sight.