Guest comment: Time for radical reform on overdrafts 18 December 2018 at 10:23AM in Debt-Free Wannabe 4 replies 1K views

Former_MSE_Callum

Time for radical reform on overdrafts...

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'Time for radical reform on overdrafts'

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D_M_E

This should have been included in your thread

https://forums.moneysavingexpert.com/showthread.php?p=75200846

michaels

If the banks can no longer make money on overdrafts they will stop offering them, or alternatively cherry pick the risks so only those who don't need one will get one - then people will be forced into taking loans - would that really be a win?

(Also pet hate, unauthorised overdrafts, in France this is treated as stealing from the bank and I can see why, it is basically like seeing some money lying around that isn't yours and taking it to spend, or be it with the intention that it will be repaid at some point. However the banks are at least in part complicit as they allow it to happen).


However charges for not making a payment should only reflect what it costs the bank (including a sensible profit - say an automated letter costs a fiver then 50p profit might be reasonable).

sourcrates

michaels wrote: »

If the banks can no longer make money on overdrafts they will stop offering them,

However charges for not making a payment should only reflect what it costs the bank (including a sensible profit - say an automated letter costs a fiver then 50p profit might be reasonable).

I agree, and that might not be a bad thing, it may encourage people to live within there means, instead of within their overdraft.

On the issue of charges, banks have been charging ridiculous amounts of money for the slightest error for years, it used to be £35 per item, per day, so if you went 10p over your limit for two days, they hit you with a £70 fine.

Many people faced large debts due to bank charges, even now some banks charge way more than others, there should be a level playing field between all of them, with much reduced fee’s which won’t impact the ability of the account holder to afford them, at the moment affordability is not taken into account at all.

michaels

And of course less profitable banking = cost savings needed = branch closures