Bank has encouraged son Debt

recovery27

My Son recently joined the Army and due to being posted away decided to approach his bank for a car loan to help buy a car for travel.
He went in with no outstanding debt and came out with £5000 car loan, £200 overdraft and a credit card that he was advised "would improve his credit rating"
8 months later he now is 3 times over his overdraft (£600) maxed out on his credit card and is struggling to pay for basic food on base. How has this happened? Yes he was given the talk about budgeting and only using his overdraft and credit card in emergencies, and to pay off the following month.
At the end of the day as a younger adult the temptation is there, I full acknowledge the fault lies with my son BUT surely the bank have a responsibility to managed their younger customers, and not give them the means to get themselves into so much debt.
Ill advice from HSBC, giving customers things they didn't ask for(credit card/overdraft) clearly they are not a very ethical bank.
Any advice on how best to help him out with his, and are there anyway to recouple some of the ridiculous bank charges he has amassed on top?
Thanks

poppasmurf_bewdley

My son, who was in the army for eight years, was exactly the same, but his bank never gave him a credit card or his financial situation would have been far worse than it is now.

He has regularly exceeded his overdraft limit, resulting in charges of up to £80 a month, if you can believe it!

He has now moved out of my house but letters are regularly coming for him from debt collectors, which I just return as 'gone away'!

It is a great pity that the army don't teach their recruits some basic money management, but again, it's also regrettable that schools don't teach students how to manage money instead of some of the lessons they do seem to teach these days.

And maybe us parents are at fault for not instilling into youngsters some basic money facts. I tried. My daughter is very money savvy like me, but my son takes after his mother. So maybe it's something to do with the genes?

sulkisu

recovery27 wrote: »

My Son recently joined the Army and due to being posted away decided to approach his bank for a car loan to help buy a car for travel.
He went in with no outstanding debt and came out with £5000 car loan, £200 overdraft and a credit card that he was advised "would improve his credit rating"
8 months later he now is 3 times over his overdraft (£600) maxed out on his credit card and is struggling to pay for basic food on base. How has this happened? Yes he was given the talk about budgeting and only using his overdraft and credit card in emergencies, and to pay off the following month.
At the end of the day as a younger adult the temptation is there, I full acknowledge the fault lies with my son BUT surely the bank have a responsibility to managed their younger customers, and not give them the means to get themselves into so much debt.
Ill advice from HSBC, giving customers things they didn't ask for(credit card/overdraft) clearly they are not a very ethical bank.
Any advice on how best to help him out with his, and are there anyway to recouple some of the ridiculous bank charges he has amassed on top?
Thanks

I think the best place to start would be by asking your son how it has happened. He is the only person who knows how much he has spent, and on what. Your son should then approach his bank and discuss ways of repaying the debt. How old is he and much does he owe on the credit card? A £5000 car loan and £600 overdraft do not sound too bad to be honest, especially for someone who is has a regular income. As long as he is still working and takes responsibility for his spending and budgeting, he should be able get out of this without too much difficulty. The key is that he needs to take responsibility here - blaming the bank or trying to fix it for him really isn't the answer.

sourcrates

It's a well worn cynical path taken by all financial institutions, they attract younger customers, load them up with cards, overdraughts, loans etc, they then have a customer for life.

What they don't teach you is how to use credit responsibly, so when it all goes Pete tong, as it usually does, they then make more money from charges, or try to sell you a consolidation loan.

It's all too easy to get into debt when your young, that's how it started for me, banks were throwing money at me, credit cards with £2000 credit limits, car loans for 5 grand, I think at the time I earned around £3.40 an hour, how I was expected to pay all that back I just don't know.

Seems like nothing much has changed.

DigForVictory

Pay off the credit card, then shove it in the freezer.
Emergency usage only...

For the rest, point him at this website?

MrsTinks

I know it won't feel helpful right now... BUT if he has learnt his lesson about debt this early then be grateful. Look around these boards: how many here wish we had had our light bulb moment when we were early twenties and less than £10k in debt (with an asset he could sell for some of it) and a ready salary?

Help him with his budgeting, do a full statement of accounts and help him post it here and we can help break it down and give him a plan.

Blaming the bank? Guess you can... it's changing but so very slowly... for now they will make money because that is the business they're in. Same as most sales people will aim to sell you things you don't need.

AllyMac

But how would you feel if your surely employed sensible with money son came home frustrated because he wanted a car now he was posted away, but no one would lend to him, treating him like a child when he's old enough to fight for his country?!

I don't think they did anything wrong giving him a car loan - he went to them, he's pretty securely employed.

The credit card - you say he was told to use it to improve credit and to pay it off every month. I do have an issue that that isn't what he went for... but again, what if he'd come home and said "I wanted a card to build a history, but they treated me like a kid and said no". There has to be an age at which a bank can treat you like a responsible adult - and to me that age definitely comes with full time employment.

I think they were totally wrong to give him an overdraft though!!!

I left home at 16 and didn't get into debt, despite being on my uppers. My brother lived at home til 28, and maxed credit cards. It's not just about age.

AllyMac

As well as thinking the overdraft was wrong, I also think it's wrong that it was increased to 3x the original amount when there were (presumably?) signs that he wasn't repaying the credit card in full.

takman

Banks are already tightening up their lending and making it much more difficult for people to get financial products just because people can't budget and blame the banks for letting them get into debt!. So i'm completely against making it any more difficult.

Mr.Generous

I think you can help your son out by getting him to take responsibility for getting himself into a mess. When he has done this - and only then, you could help him out financially. Presumably the army feed him, house him, pay his utilities etc, what does he take financial responsibility for apart from a car loan?

stuart30

I'm a bit confused..why should the army teach him how to budget his money.


None of my employers ever taught me how to budget and i'd have told them to clear off if they tried...so why should the Army.?


Sorry but ive worked in plenty of places were squaddies hang out and believe me there very similar to students...think nothing of a !!!! up every chance they get and wonder why there skint.