WARNING: A&L introduce massive new o/d charges

Gorgeous_George

There is another thread on this subject but I wanted the title to attract more attention.

Essentially, instead of being charged 0.6% per month for an authorised overdraft, A&L will charge 50p per day up to a maximum of £5 per month!

Consider this scenario:
Overdrawn by £10 for ten days. Cost £5 or 150% per month (1800% pa)

Are my calculations correct?

To incur a £5 charge under the old rules you would need to be £833.33 overdrawn for the entire month.

Now, I rarely go overdrawn but this is scandalous. Clearly the bank has been bitten by the reclaiming successes. I will be moving my account in the New Year.

GG

InsuranceLiability

Why are you waiting until the new year to move accounts?

BlightyAndy

A maximum of £5 a month for going over drawn? Do i have that right?
If so it's good, if not im wrong...

Andy_L

and why are you with a bank that doesn't give a free overdraft?

MarkyMarkD

GGYou really do have things out of perspective if you consider overdraft income charges which are capped at £5 a month (£60 a year) to be "massive".Obviously the new charging structure is more expensive for those who were overdrawn for a lot of days but a trivial amount.But it's far cheaper for those who were overdrawn for most of the month by a significant amount.A&L's overdraft interest rate was previously one of the lowest available, too.Some people will benefit from the change, others will lose out.Those who are never overdrawn will be completely unaffected.Not a cause for panic, IMHO!

Gorgeous_George

The new charging structure seems unfair to me. Small transgressions into overdraft facilties will incur disproportionate costs.

I use A&L for the free travel insurance. With a couple of holidays between now and the New Year, I'll wait until January before moving.

BTW, I checked my statements last night and found that I've never been overdrawn even though I have the facility.

In the good old days, those who went into unauthorised overdrafts paid massive but potentially illegal charges leading to cheap banking for those who followed the rules. This change is clearly a calculated attempt to replace those massive charges (and the profits that they brought with them) for the few with equally unfair (and possibly illegal) but smaller charges for the many.

GG

DaisyFlower

£5 a month max charge for spending somebody elses money seems more than fair to me. If you dont like the charge, dont go overdrawn.

masonic

DaisyFlower wrote: »

£5 a month max charge for spending somebody elses money seems more than fair to me. If you dont like the charge, dont go overdrawn.

Unfortunately, some people don't have that luxury. Why shouldn't they move banks to get a better deal, hmm?

RayWolfe

So, keeping your spending under your income is now considered a luxury?

debbie42

It hasn't affected me thus far. My Dad is annoyed at what he sees as disproportionate charges for just going a small amount overdrawn (into an authorized overdraft) for a few days. I think the max he got charged before was around 30p. Potentially, he could now be charged £5 for the privilege. It may not sound a lot but it is a big difference to him.

He does only go into his overdraft very rarely, so I doubt it would actually cost him that much per year but he's seriously hacked off by it anyway, so is considering moving. I can't quite see the logic behind scaring away people like him.

stacey21_2

Can people in Scotland still reclaim against Alliance and Leicester?