A&L new overdraft charges / nil interest

p1an0player

Hello,

I was expecting to find a big thread on this but couldn't, sorry if I've missed it.

It seems that from November, A&L will charge nil overdraft interest, but instead a 50p per day overdraft usage charge, capped at £5 per month.

As suggested on this site, I opened an A&L current account earlier this year with 12 months free overdraft, with an overdraft limit matched to the current account I was switching from. This has been working quite nicely as I have been stoozing the overdraft money.

Am a little surprised though that they now want to charge me the 50p per day, even though I am still in the first 12 months. (Although from a stoozing point of view it is still profitable on a £2k+ overdraft).

I guess that they will soon be trying to reduce people's overdrafts to discourage stoozing.

Any thoughts on this?

LittleVoice

This change was mentioned in Martin's letter of 16 October.

I don't think it will apply until you have got past your first anniversary - at which point you might as well pay back your overdraft and close the account.

And the 50p/day is actually capped at £5/month.

MarkyMarkD

I don't believe that the 50p charge DOES apply in the initial 12 months.

And there has also been another thread on this topic which is here: http://forums.moneysavingexpert.com/showthread.html?t=576687 - it's not exactly disguised! It took me approx. 1 minute to find it.

p1an0player

I searched for A&L on each of the Search places above and got the result "no matches". Maybe I should have gone to google, which usually works better for me for this site.

Anyway thanks for the replies. I did receive a letter telling me that the 50p charge would apply. Maybe they've just sent that to everyone.

MarkyMarkD

I think they probably has, as it's a change to the account Ts & Cs which will prevail once the introductory period expires.

Never use the site's own search - it's beyond pants.

moneysaver12

what does stoozing mean

p1an0player

borrowing money at a low interest rate and saving it at a higher rate

www.stoozing.com

YorkshireBoy

LittleVoice wrote: »

I don't think it will apply until you have got past your first anniversary...

Correct...

Overdraft Usage Fee / Exceeding Overdraft Limit Fee

If you have an overdraft facility and use it, you will incur an Overdraft Usage Fee of 50p per day. This is capped at 10 days per monthly charging period – £5 maximum.

You will not incur this fee for the 1st 12 months from account opening.

http://www.alliance-leicester.co.uk/currentaccounts/index.asp?page=interest-chargespdirect220907&ct=curraccrates220907#l8

p1an0player

The interest-free overdraft limit for people opening the Premier accounts was £2,500. However some people have agreed overdrafts in excess of this, with interest charged at 7.9% or thereabouts.

In relation to the amount in excess of £2,500, do we think that A&L will still charge overdraft interest on accounts less than 1 year old?