New Halifax Overdraft Charges

AliceBanned

PS I applied after seeing the latest offer from HSBC on MSE. Actually find HSBC fairly lenient so might be worth others trying. I have a 0% credit card with them as well.

AliceBanned

Just an update on Halifax. I phoned them last week and they said I still have to wait until mid November before I can talk to them about options for my overdraft. Since then I've shifted about 60% of the debt as mentioned above. However the latest Halifax statement says I will be charged £53 - I was using o/d for most of the month - but they have refunded me £13 and capped it at £40. Not sure why or whether this is related to the new charges but presume so.

Westie983

AliceBanned wrote: »

Just an update on Halifax. I phoned them last week and they said I still have to wait until mid November before I can talk to them about options for my overdraft. Since then I've shifted about 60% of the debt as mentioned above. However the latest Halifax statement says I will be charged £53 - I was using o/d for most of the month - but they have refunded me £13 and capped it at £40. Not sure why or whether this is related to the new charges but presume so.

New changes are due in November 2nd I think, so 1st will be the last one at the old £1 per day rate, then it will revert to new fees and daily charging.

Westie983

phil90210

has anyone had any help from halifax i got told to phone back mid november but by then the fees should already have started?

reallydismayed

AliceBanned wrote: »

Halifax quoted £2 a day for an overdraft of £1400. If anyone can work out the APR on £1000 from that.


More than some payday lenders I imagine..

Well, just using simple interest that would be £521.42 p.a. on £1000.
But I imagine they would be compounding the interest on a daily basis.
So at a guess, that's about 68% APR annual interest.

paddysreturn

One point which doesnt seem to have been mentioned on the thread is that the previous scheme encouraged clients to use the maximum possible overdraft.

Before going any further, I fully accept that everyone is responsible for their own borrowing. However, the fixed fee system charged the same amount for a £2k o/d as for a £50 one. At the time all the fuss was about 3000% interest rates etc but the reality was that as soon as you were in for a few hundred, every extra pound borrowed resulted in no extra increase in charges. As such, Halifax created an environment whereby in terms of charges it was most cost effective for customers to use the maximum limit within their given band. Now, in one fell swoop those customers are hit with a 68% apr.

I personally think some of the comments towards Whizzywig in this thread were unconstructive. Not everyone who is in debt is there due to mismanagement of funds. And not everyone in debt can just switch to a zero percent deal. Whizzywig was taking responsibility for his situation, and was just understandably disgruntled that his interest payments had shot through the roof - making it infinitely more difficult to pay off his debts - after he had got into trouble. Very few of the customers who have o/ds with hbos would have touched them had they known they were at 68%.

Im also disappointed at the regulators. One on the one hand their claiming to be consumer champions - cracking down on insurance and energy companies - and then on the other hand their letting major bank use disguised marketing techniques of 1p per £7. Tell it like it is - its a 68% apr!

It would be nice to get to a stage where people could understand each others situations without just thinking of their own position. It was grossly unfair for people with really small overdrafts to get charged a daily fee and its good news that they will be better off by the switch back to an apr (in all but name). However, Hbos started with an overdraft rate of 29.9% (I cant remember exactly), switched to a daily fee and then switched back to a rate of 68%! Theres no way they could have got away with a straight increase without the moving into and out of the daily fee so, planned or not, they have now ended up charging more than double their rate from just a few years ago.

Good luck Whizzywig and all others struggling with this change just before Christmas.

Tom99

[FONT=Verdana, sans-serif]It is only 68% APR if your balance at the end of that day is an exact multiple of £7. I expect it is constructed that way so that Halifax do not have to publish an APR because 68% would sound very high.[/FONT]

eskbanker

Paddysreturn wrote: »

Tell it like it is - its a 68% apr!

I'm with Tom99 on this - they're not saying 68% APR for the obvious reason that it isn't 68% APR, as he pointed out three months ago back in post #27!

Judith_Lawrence

I have been with Halifax for 45 years, initially too lazy to move but for last 15years have been registered disabled, unable to work and live on benefits. I already had a £1000 overdraft when I finished working and since then go up to overdraft limit every month and have been unable to get out of it. I have been paying £30 most months up till now and when I received the letter, couldn't work it out, (dyslexic), please can anyone tell me wether I benefit or lose out?

PeacefulWaters

If you're always exactly £1,000 overdrawn then expect an extra £13 a month or so.

If you have a lower level of overdraft for part of the month you might make a modest saving.