Monzo Overdraft

[Deleted User]

hangonthebox wrote: »

Anyone else had an offer through the Monzo app to sign up for an overdraft?

I got a notification through today, inviting me to activate mine. This surprised me as, although I've had Monzo for quite a while (since the prepaid card days) and converted to the current account as soon as I was able, I've only ever used it sparingly, loading the odd fifty bar on and often going months at a time without using it. I've never had an income or any standing orders set up to pay money in regularly.

Anyway, it took me to a screen where I input my annual income and then invited me to choose the amount. This could have been up to £1000 but I chose £500 - and it was activated immediately.

I live within my means, however low or high my income is (and it has periods of being very low!) so it's unlikely I will use this feature but as someone who wants to improve my credit rating, but has no desire for a credit card, I was quite pleased (presuming Monzo report to CRAs, can anyone advise?). I don't have an overdraft on my main (Yorkshire Bank) current account and was actually considering getting a Cashplus card to improve my credit rating so this may be better (and certainly cheaper!) than doing that.

Why are you trying to improve a fictitious rating?

No one sees the credit scores or ratings that are contoured up the by CRA's.

Good management of accounts is all that matters - keeping everything up to date with no adverse payment history, having a credit card and using it and paying back in full after each statement is the way to build a good credit HISTORY.

jonnygee2

Clearly the £1000 one is the winner (or £19.99 with no fees!) - but how many people need to go £1,000 overdrawn just before payday and then pay it back in full? I find that somewhat unlikely - or if they do they'll end up being dragged back into the overdraft for say half the next month at -£200, -£300, -£400 etc.

I know what you mean. But I now exclusively use my Monzo overdraft anyway, even though as someone who only goes over a few hundred quid every six months or so, for a couple of days, it's very expensive. The sole reason is that when I go overdrawn in Monzo, the balance turns a nasty orange and the fees I owe them sit right at the top of the app, clocking upwards each day. It's a very powerful message - borrowing is bad.

With every other bank, they let you easily slip into the overdraft and present you with the fees much later. They also wap you with a load of hidden fees every now and then - unpaid standing order fees etc - which ultimately make them more expensive.

I think its so honest of Monzo, whose only real income stream is overdraft fees, to actively try and deter you from borrowing. It works on me, I am far more conscious of borrowing on Monzo than in any other form. I always feel I trust them to tell me what charges I will have, which takes the stress out of banking.