LBG change overdraft charging structure

jonesMUFCforever

miller wrote: »

I currently have an arranged overdraft which I don't use. I think I'll be better off cancelling it as it would be preferrable not to be charged anything and just letting payments bounce when the balance hits 0.

As a Halifax customer, currently Travelex foreign cash purchases (e.g. for airport collection) do not incur a charge. This appears to be changing.

To be frank that would be a stupid decision.
Bounced transactions may not cost you £charges but would damage your credit profile immensely (and I have yet to hear from any utility/telecommunication company that will not charge if your direct debit to them is bounced).

miller

Your first sentence detracts from an otherwise good point. Not sure I have ever been called stupid on these forums before, so congraluations for being the first.

I don't use the overdraft, so in the unlikely event it happens (e.g could be an attempted cash withdrawal) I will avoid paying charges to Halifax.

jonesMUFCforever

miller wrote: »

Your first sentence detracts from an otherwise good point. Not sure I have ever been called stupid on these forums before, so congraluations for being the first.

I don't use the overdraft, so in the unlikely event it happens (e.g could be an attempted cash withdrawal) I will avoid paying charges to Halifax.

You don't use the overdraft so the new fees won't affect you - will they?

PeacefulWaters

miller wrote: »

Your first sentence detracts from an otherwise good point. Not sure I have ever been called stupid on these forums before, so congraluations for being the first.

I don't use the overdraft, so in the unlikely event it happens (e.g could be an attempted cash withdrawal) I will avoid paying charges to Halifax.

You weren't called stupid.

Your proposed course of action was.

farty

Surely this is the elephant in the room - they are changing their overdraft APR to 52% without mentioning that fact anywhere. How is this legal?

I phoned the call centre and the chap told me they had been specifically told not to mention an APR and to say they couldn't answer any questions about APR.

Thanks Lloyds, just when we thought you couldn't sink any lower.

farty

P.S. MSE, allow me to fix your article title: instead of "Overdraft fee drop for millions..." it should have read "Lloyds Banking Group increasing overdraft APR from 19% to 52%".

After all, isn't that the real story here? Whose side are you on?!

You're welcome :-)

eskbanker

See this post on one of the other threads for a valid reason why an APR doesn't apply: https://forums.moneysavingexpert.com/discussion/comment/72977796#Comment_72977796

Copy/pasted here for simplicity (acknowledgements to Tom99):

I think that Halifax will get away with not publishing an APR because of the way the charge is calculated i.e. it is 1p on every whole £7.

So the APR on £6.99 is 0%, on £13.99 it is 53%, on £100 it is 65.95% and on £1,000 it is 68.14%

Note that many other banks' overdraft charges also aren't calculated on an APR basis, such as all those who charge £x per day regardless of balance....

szam_

As someone who had a large overdraft and uses it often due to reasons, it'll come about 3 months too early for my liking. I was planning on paying off my overdraft in full in Feb anyway, so it'll be a few months of feeling a bit ripped off. I might try and get some paid off in the interim to reduce the damage.

The worst part about this in my opinion is charging on the day, every day - it just sucks money from your account every day, as someone who pays all my bills at the start of the month, I absolutely despise this change, I wouldn't care if it was charged monthly as it currently is. Making things simpler they said? My !!!!.

Once that's paid off, and after 10 years with them, I'll be off to a different bank anyway, Halifax's online banking lately has been behaving really odd, taking days to show payments coming out, not even showing up in pending payments - this change just fuels my motivation to move bank.

Does anyone know how this affects Ultimate Reward Accounts by the way? Does it start after the 300 or will it add on the 300 the moment it hits 307? I.e. £300 fee free means I won't be charged but does £7 over that initial £300 mean I will be charged 1p or 43p? This question wasn't answered in the documentation I received.

eskbanker

farty wrote: »

P.S. MSE, allow me to fix your article title: instead of "Overdraft fee drop for millions..." it should have read "Lloyds Banking Group increasing overdraft APR from 19% to 52%".

After all, isn't that the real story here? Whose side are you on?!

You're welcome :-)

According to the MSE article on this,

Lloyds Banking Group, which includes Halifax and Bank of Scotland, says about 18 million customers will be better off or unaffected by the changes

but

around two million customers may be worse off as the new charges could cost more than the current interest or charges they're paying

Obviously the 10% who lose will be the most unhappy and therefore the most vocal but they're still very much in the minority when compared against those who'll benefit (or not lose)....

Dobbibill

szam_ wrote: »

Does anyone know how this affects Ultimate Reward Accounts by the way? Does it start after the 300 or will it add on the 300 the moment it hits 307? I.e. £300 fee free means I won't be charged but does £7 over that initial £300 mean I will be charged 1p or 43p? This question wasn't answered in the documentation I received.

Use their overdraft calculator on their website.

You need to select the correct account, in your case the URCA.
This pops open additional area to enter the amount you plan to use and the length of time.

Play with the figures and see how it will impact you.