Overdraft fees on Flex Plus

ITBarbie

Hi

I have a nationwide flex account and was interested in upgrading to Flex Plus as I was particularly interested the mobile phone insurance aspect as I had a phone stolen recently and have two teenage sons so wanted to ensure I'm covered in future. What I don't understand is that if I pay the £10 per month for the upgrade I get the package benefits but seem to have to pay more for an overdraft. Quite a few times I go up to £300 overdrawn for roughly 2 weeks. As far as i can see on the standard flex I get charged a percentage but on the PLUS I get charged £0.50 per day if I'm I overdrawn. Have I got the wrong end of the stick as I can't understand why I'd pay more if I upgrade and pay £10 per month? Have I misunderstood?

colsten

I think your understanding is correct, according to http://www.nationwide.co.uk/~/media/MainSite/documents/products/current-accounts/shared/p7430-rate-and-charges.pdf

If you would pay more for the FlexPlus, just keep the FlexAccount alongside the FlexPlus and make sure you transfer a tenner into your FlexPlus before the end of each month.

grumbler

I don't know "why", but 50p/day capped at £10/month isn't necessarily "more" than 18.9% APR. This is the case only for small balances.

colsten

grumbler wrote: »

I don't know "why", but 50p/day capped at £10/month isn't necessarily "more" than 18.9% APR. This is the case only for small balances.

I don't think there is a £10/month cap to arranged overdraft fees - the cap would be the number of days in a month. So it could be as much as £15.50 a month.

grumbler

Yes, I misread the information.
Even if uncapped, the balance has to be smaller than ~£1000 for 50p/day to be bigger than 19% APR.

ITBarbie

Thanks for the reply. I'll see about running both alongside as I never thought about that :-)

Dr_B_2

I also have a normal Flexaccount that is often (but not permanently) overdrawn by less than £400. I'd like a Flexaccount Plus but it could get significantly more expensive due to the 50p overdraft fee.

The idea of running a Flexaccount Plus alongside the Flexaccount is interesting but I worry about this being highly likely to be declined given that they'd surely be wise to the fact that allowing this would make their profit fairly minimal and in some cases would wipe it out completely. If they allowed this manouever then customers could presumably use an overdraft on their Flexaccount to pay funds into their Flexaccount Plus, thereby earning interest on the surplus to offset the interest on the overdraft and getting free insurance and warranties into the bargain. I don't see why they'd allow that. Even if I was successful I also worry they'd be more likely to reduce my Flexaccount overdraft limit, forcing me to use the (in my case) more expensive Flexaccount Plus overdraft facility.

Does being declined for a bank account show up on your credit file?

Dr_B_2

Dr_B wrote: »

I also have a normal Flexaccount that is often (but not permanently) overdrawn by less than £400. I'd like a Flexaccount Plus but it could get significantly more expensive due to the 50p overdraft fee.

The idea of running a Flexaccount Plus alongside the Flexaccount is interesting but I worry about this being highly likely to be declined given that they'd surely be wise to the fact that allowing this would make their profit fairly minimal and in some cases would wipe it out completely. If they allowed this manouever then customers could presumably use an overdraft on their Flexaccount to pay funds into their Flexaccount Plus, thereby earning interest on the surplus to offset the interest on the overdraft and getting free insurance and warranties into the bargain. I don't see why they'd allow that. Even if I was successful I also worry they'd be more likely to reduce my Flexaccount overdraft limit, forcing me to use the (in my case) more expensive Flexaccount Plus overdraft facility.

Does being declined for a bank account show up on your credit file?

Just noticed what a stupid comment this is.

I'm still concerned that they might reduce your Flexaccount ovedraft in order to make you use the automatic £100 Flexaccount Plus overdraft. They then get larger fees and reduce the likelihood of having to pay interest on a Flexaccount Plus positive balance.

PeacefulWaters

If you take proper control of your finances and stop going overdrawn the cost is even less!

colsten

Dr_B wrote: »

Does being declined for a bank account show up on your credit file?

All that shows is a search. The result of the search is not recorded.

Dr_B_2

Sorry, I meant to ask if an application fora bank account affects your score in the same way as an application for credit. I guess you've answered that.