Would you stay with a bank that didn’t give you an overdraft ?.

TheShape

anotheruser wrote: »

I've never used an overdraft.
Why people think they are important is a mystery...

If you don't have the money, you shouldn't be able to spend any.

It's worth remembering that having 'an overdraft' actually means having an 'authorised overdraft'. I meet many people who manage, for one reason or another, to end up with an expensive unauthorized overdraft. If you spend on a debit card or have a Direct Debit take you below a 0 balance you end up in an overdraft. Far better that you have a usually far less expensive authorised overdraft. I wouldn't have a main account without one as I never know when it might be a very useful life line.

Anthorn

moneysaver6161 wrote: »

Would you stay with a bank that didn’t give you an overdraft ?.

Now I know it might sound stupid and petty, but it’s the Principal of the thing.

I bank with HSBC and NatWest, HSBC has given me a Overdraft of £1500, NatWest have said no !.

It is only to be used as a safety net and not something I will ever use to be honest, but on principle should you stay with a Bank that would not give you an overdraft ?.

My short answer is "no".

My longer answer is that I'm pretty much paranoid about a bank that won't give me an authorised overdraft facility which like the OP is used only as a safety net. I assume rightly or wrongly that they won't give me one because they are going after the hefty fees for unauthorised overdrafts.

In the case that a bank will not allow me an overdraft facility I either stop the application or close the account immediately using my right to cancel.

anotheruser

TheShape wrote: »

I wouldn't have a main account without one as I never know when it might be a very useful life line.

All my main accounts don't have one and I've never had a problem.

I know what money comes in, what money comes out. If money comes out in error to take me under £0 balance, then the charges would be paid by someone else as it's their error.

TheShape

anotheruser wrote: »

All my main accounts don't have one and I've never had a problem.

I know what money comes in, what money comes out. If money comes out in error to take me under £0 balance, then the charges would be paid by someone else as it's their error.

I too know what comes in and out of my account but if I go somewhere and lose my credit card, need a hotel, flight, whatever, I have an overdraft available to me. Same with my credit card(s).

I might not need to use the available credit but it is pre-approved borrowing available should I want or need it.

takman

I've never had an overdraft in my entire life so it wouldn't bother me if a bank didn't offer one. I have many different accounts with different banks and all I care about is the in credit interest rates and bonus payments they offer me.

An overdraft has got to be one of the worst forms of borrowing with the least amount of benefits.

esuhl

takman wrote: »

I've never had an overdraft in my entire life so it wouldn't bother me if a bank didn't offer one. I have many different accounts with different banks and all I care about is the in credit interest rates and bonus payments they offer me.

An overdraft has got to be one of the worst forms of borrowing with the least amount of benefits.

Ditto. There have got to be cheaper ways to borrow money.

I've not been in debt for a few years, but I think even credit card interest was cheaper than an overdraft -- especially if you get one with interest free balance transfers.

pinkdalek

anotheruser wrote: »

I've never used an overdraft.
Why people think they are important is a mystery...

If you don't have the money, you shouldn't be able to spend any.

OK, so let's use an example where there is an issue with a salary payment being delayed, this causes direct debits not to be paid. Although the employer would be liable for any charges, surely an overdraft in that scenario would relieve any hassle and stress for the employee.

"If you don't have the money, you shouldn't be able to spend any" oh what a narrow minded view or opinion. If that was the case no one would own a house or get a mortgage.

Truth is credit/debt facilities when used wisely can be very useful and to your own advantage. E.g. consumer credit protection on credit card payments over £100. Not everyone with credit cards/overdrafts spends stupidly.

takman

pinkdalek wrote: »

OK, so let's use an example where there is an issue with a salary payment being delayed, this causes direct debits not to be paid. Although the employer would be liable for any charges, surely an overdraft in that scenario would relieve any hassle and stress for the employee.

"If you don't have the money, you shouldn't be able to spend any" oh what a narrow minded view or opinion. If that was the case no one would own a house or get a mortgage.

Truth is credit/debt facilities when used wisely can be very useful and to your own advantage. E.g. consumer credit protection on credit card payments over £100. Not everyone with credit cards/overdrafts spends stupidly.

Yes but a sensible person should have an emergency fund to cover issues like that. Then if they are not paid on time they can simply transfer the money into the account until they are paid.
If you need to go into your overdraft then that should be a big wake up call that you need to urgently sort out your finances.

You mention the benefits of a credit card for making payments. What exactly are the benefits of an overdraft for someone who is in control of their finances?, I can't think of any.

Dobbibill

I would stay with them if I was happy with everything else.

You have an OD elsewhere if there was an emergency that required it.

TheShape

takman wrote: »

Yes but a sensible person should have an emergency fund to cover issues like that. Then if they are not paid on time they can simply transfer the money into the account until they are paid.
If you need to go into your overdraft then that should be a big wake up call that you need to urgently sort out your finances.

You mention the benefits of a credit card for making payments. What exactly are the benefits of an overdraft for someone who is in control of their finances?, I can't think of any.

Perhaps you're hiking through the Amazon Jungle or climbing Mount Everest on payday and can't get online or perhaps some other unforeseen event limits the availability or access to other funds.

With an authorised overdraft you have access to readily available funds 'should' you need them.

If I ever have need of it I personally can borrow £1500 from Nationwide merely by using the Debit Card that is almost always in my pocket and to do so for a day or two would cost me very little. Hopefully i'll have no need of it but it is costing me nothing to have the facility available to me.