Barclays' new overdraft charges - will be 10 times what I'm paying now

definitivefreak

I got the info pack in today about the new overdraft charges Barclays are bringing in from 16th June. I currently pay interest on my £250 overdraft limit (I'm always using it, I vary between -£240 and -£100). At the new rate I'll be paying 75p per day, which adds up to £23.25 per month. I'm usually paying around £2.35 a month in interest, which I was happy enough to do, so the new fees are going to be an enourmous hike to me.

I understand that my balance that I owe to Barclays is very little, and that anyone else could just clear it in the blink of an eye. But I've been surviving on £143.40 a fortnight, and have managed to chip away at this overdraft since mid 2011, getting it down from -£800.

Is there any way to get around these new charges? My account is the Barclays Current Account with no packs - I used to be Current Account Plus for the interest free first £300, but I got rid once I got down to -£400 cos it worked out cheaper. I don't want to start using an interest free credit card or anything like that because it would just be too much temptation for me. That's how I got a -£800 balance in the first place - Barclays gave me a £1500 overdraft when I opened the account, even though I specifically asked for a limit no bigger than £50, and also without telling me it had a time limit of 90 days. Therefore I ended up in repayment until I got it to -£250. That's what happens when I have access to a lot of money, so no credit card for me please.

Is there anything I can do? There's no way I can clear the -£227 that's left before 16th June.

FireWyrm

I too was horrified by the new raft of charges being introduced by all banks, Halifax is another culprit. Clearly, the banks are trying to discourage use of an overdraft facility whilst still appearing to offer one. The only thing you can really do is to change banks and roll the overdraft onto either a 0% card or simply default to Barclays. Problem is, Barclays are sods for continuing to add userous interest and fees to their accounts, part of why I got rid of them several years ago. You could complain, but I doubt they'll change their policy. They can earn truly stupendous profits from people like you and obviously the banks are up to their old tricks again, now the economy is on the mend.

My first port of call would be Barclays themselves and ask for help in paying this. They might be kind and freeze the whole facility allowing you breathing room to pay the balance, but I would treat the facility from here on out as having been summarily withdrawn - as is their right with overdrafts.

definitivefreak

Yeah, I wanted to keep paying it off until it didn't exist anymore, like having the limit reduced every month or so. But they wanted me to still have the overdraft. I'm trying to keep temptation away, so if my limit remains at 250, I'll always be hovering around it. Maybe I could make some kind of new repayment plan with them. I don't want to have an overdraft anymore.

FireWyrm

definitivefreak wrote: »

Yeah, I wanted to keep paying it off until it didn't exist anymore, like having the limit reduced every month or so. But they wanted me to still have the overdraft. I'm trying to keep temptation away, so if my limit remains at 250, I'll always be hovering around it. Maybe I could make some kind of new repayment plan with them. I don't want to have an overdraft anymore.

Then take this as an excellent opportunity to draw a line under it. Treat it as a debt going forwards, change banks and continue to pay off the OD. Ask Barclays to freeze it (although you must be prepared for disappointment) and start again somewhere else. I assume you already have some bad credit markers, so no great loss if they do mark you as defaulted?

definitivefreak

No I don't have any bad credit markers. According to Experian and Equifax I have no marks against me at all. I have no problems getting credit if I want it, I just don't want it. I just don't want to be paying silly money for the privilege of having an overdraft. I moved to Barclays in 2011 because Santander were starting their 50p a day overdraft fee.

Tixy

How much could you afford to repay off the debt each month (you mention you spend it all because it was available but what would you have liked to have had the facility reduce by?)

I'd open a new bank account elsewhere without an overdraft facility and then set up a standing order to repay this overdraft at that rate. Yes you will be paying the daily charges for a few months but it sounds like it might help you not overspend and to clear the debt.

Then once it is fully paid you can just close the account.

definitivefreak

I think I could manage about £20 a month. I know it's not much, but it's something. I'll speak to Barclays tomorrow once I've got my head round everything. I'll ask if I can reduce the overdraft by £20 amonth, and see if there are any of their accounts that have no charges on the overdraft (like the Current Account Plus was interest free up to £300 for a £6.50 monthly fee).

Tixy

You don't need to ask them to reduce your overdraft by £20 a month, simply send that across as a standing order and stop using the account.

You also don't need to have the new bank account with them, I'd move to a different bank.

TheBanker

Barclays website says

If you're concerned about how these changes might affect you, please call us on 03457 345 345 1 to see if we can help reduce the impact they might have.

So probably worth giving them a call, and seeing if they can do anything.

definitivefreak

I called Barclays earlier today. I'm no further forward after a 39 minute call.

Basically, I have three options. 1, carry on and end up paying around £23 a month. 2, pay off the overdraft before 16th June. 3, close the account with them freezing any interest & charges and pay it off from elsewhere - but it results in a default.

They told me that they can't arrange a repayment schedule on my account, but didn't give me a reason. Annoying...

So basically I'm gonna have to find £237 by 16th June, in a way that won't be taken off me by JSA. :S

FireWyrm

You have the best part of 70 days to come up with the money. Got anything to sell? Can you restructure, i.e move money from a 0% card for instance - MBNA have this facility.