Does it matter if debit comes before credit ?

Somerset

I genuinely do not know this and might have made a mistake if I've got it wrong.

It concerns my Lloyds/Tsb current account. I also have a Lloyds/Tsb online savings account. I made a direct debit transfer from Lloyds to Bradford & Bingley ( you have to do it the B&B end so never sure when it hits Lloyds ) and a week later wrote a large cheque from the Lloyds current account. In both cases the money to cover the transactions was sitting in the online saver and as soon as I saw the transactions had happened I transferred the money over. So in both cases the current account was debited with £xxx and a couple of hours later credited with £xxx from the online saver. Money in and out same day. On the first occasion Lloyds gave me an overdraft ( didn't previously have one ) and on the second occasion upped the overdraft to keep the account in credit. This was done automatically ie no communication with me.

Now here's where I could well be wrong - I thought so long as I covered the money same day, it was ok. But techically I was overdrawn for a few hours. Does this matter or should I have had the cash in the current account BEFORE the transfer out/cheque hit ? I just assumed same day was fine.

Just asking this for future reference so I don't make the same mistake again, if it was a mistake

masonic

The general rule is that the money should be there before the payment goes out (which means at the end of the day before for payments that are taken overnight). Now I've heard that Llyods were more lenient than most banks about this sort of thing, but the fact that they took the trouble to increase your overdraft to cover these payments suggests to me that they at least considered bouncing them. Obviously if the overdraft would cover the payment, then that's what it's there for, but otherwise I wouldn't risk it again.

littleoldme_2

you have to have the money in the account before the debit comes off , if you go over drawn you will be charged , doesnt matter if its 10 mins or 10 hours.. im with lloyds tsb aswell

Somerset

Thanks guys

I'll have to wait and see if it's cost me anything.

mini_mad_dad

think you will find with lloyds as long as you are back in credit on the same day you will not get charged, and with the overdraft if you a good custumer (ie not been charged for o/d & rtnd DDs) the system some how will honor the transfer or some cases the payment. generally if anything lloyds will honor payments to other finacial companys so you dont get charged twice. but get with with thier charges instead! he he

dunstonh

Lloydstsb dont charge you if you are potentially overdrawn at the start of the day but make a credit during the day providing its an electronic payment or a counter credit made early enough in the day to be seen on the system before someone decides if they are going to have to take an action or not.