Alliance & Leicester change overdraft policy

Lavendyr

Also, my OH and I are both A&L customers. I have an authorised overdraft, he does not have one at all. He got an email from A&L advising him of the change. So far I've not had anything from them telling me about the change - although out of the two of us, I am the one with the overdraft in the first place!

BenL

I'm definetely not better off.

I went a few £ overdrawn for a few days last month - in my authorised o/d. I paid 2p interest. Now it would be maybe £2 after 4 days.

If only Abbey hadn't made a mess of my switch, better find another bank.

NURSE46

I Had A Credit Card But It Has Been Out Of Action For 9 Months, They Went And Renewed My Credit Card Insurance Without My Consent Despite Me Ringing To Cancel This Earlier. They Dispute This Call To Cancel The Credit Card And My Insurance. Secondly They Have Charged Me Now For This Protection Of 29.00 And My Credit Card Has Not Been Cancelled. I Have Written But To No Avail They Are Still Charging Me Which I Am Disgusted About.

I Have Today Written Again To Cancel Both My Credit Card And This Insurance I Did Not Want.

What Can Else Can I Do Because They Will Charge Me Interest For None Payment Of This Insurance.

Any Help Is Required.

kittyk_3

Is there anyone who has managed to work out at what point you could be better off under new overdraft charges, in terms of length of time spent overdrawn and size of overdraft?

mrsplinter

I think most people are going to be worse off with the change in policy. I know I won't be better off. Last month I went overdrawn for 28 out of 31 days using most of my £1k limit by the end of the month and I was only charged £3 ish. My rough calculation is £1000 debt at 5.9% apr is £59 ineterest a year. Therefore even if I was overdrawn up to my limit for an entire calender month I would still be charged slightly less than £5 a month.

Grade_A_Reject

kittyk wrote: »

Is there anyone who has managed to work out at what point you could be better off under new overdraft charges, in terms of length of time spent overdrawn and size of overdraft?

There are probably too many variables to take into consideration as most people's balance fluctuates throughout the month. It would depend not only on how much overdrawn but also when.

The current monthly interest rate is 0.48% which is equaivalent to 5.9% AER. If you maintained a constant overdrawn balance of £1041 each month this would cost £5 each month so any overdrawn balance over this you'd be better off anything less would be worse off.

The biggest losers will be those who go a couple of pounds over in the last few days before payday, what used to be a few pence worth of interest will soon add up to a few pounds.

Grade_A_Reject

Rusty wrote: »

Anyone know any other good current accounts which are cheap/free if you go overdrawn (authorised overdraft) slightly every month?

The interest rate on overdrawn balances on the Halifax Moneyback account is only 6.9% AER and you get 1% cashback on debit card purchases.

Edit...

You need to pay in credits totalling £1000 per month for the cashback

bookbuyer

Grade_A_Reject wrote: »

.

I could keep my account permanantly at it's £3000 overdraft limit and move the overdrawn balance to my plus saver account with them which is currently paying 5.25% interest and make money from my overdraft with them.

This seems like an excellent idea, keep it in the higher paying account and transfer enough in to stop you going into an unauthorised amount, knowing you can only be charged a maximum of £5.00 can be made to work against them.

mleonard79

bookbuyer wrote: »

This seems like an excellent idea, keep it in the higher paying account and transfer enough in to stop you going into an unauthorised amount, knowing you can only be charged a maximum of £5.00 can be made to work against them.

This is definitely the way to go if you have a large overdraft - my mum has a £2K overdraft which has been at the 0% rate for the first year and she was going to pay it off now that's about to end but since they've made this change it makes sense just to keep using it as for a £2K limit it works out at 3% instead of 5.9%, for a £3K limit it's only 2% and for £4K it's only 1.5% etc so the bigger the overdraft the better deal you're getting. You could use it to pay off debts or stooze in a savings account.

Of course it's completely the opposite for those who only use their overdraft for a few days a month or for small amounts - in fact I'd say it's prohibitive. I don't feel it's a good move for a bank to reward customers who use large overdrafts while penalising those who use smaller ones like this - a flat rate is much fairer. Since they are doing it this way, though, it's worth taking advantage of if you have an overdraft limit of over £1K. If you don't and you regularly fall into your overdraft for more than a day or two a month then it's a case of making sure that doesn't happen and if that's not possible looking elsewhere I suppose but it's hardly ideal for those people while it's great news for those with large overdrafts.

Regards

Michelle

digp

time to take my business elsewhere then i guess?