Fixed daily and monthly overdraft fees to be banned - MSE News

Consumerist

One-Eye wrote: »

Which is easier to work out?
7p per day per £100
25.55% APR
29.1% EAR

It's all very well quoting equivalent rates in alternative forms but what many will notice more is that the monthly overdraft charges are going to be far less than they are paying at the moment.

18cc

I think the idea of having an APR model is to help shopping around.

Whereas you may not know how much you are paying on a 23.1% APR rate on your £351 overdraft everyone (most?) would know that another bank offering a 23.0% APR fee would be cheaper.

Time2Go_25

Well with a bit of luck and now there's no money to be made out of the banks will use this opportunity to reduce the debts people have. Remove the option for unauthorised ODs so any attempt to go past your arranged limit is declined and then to reduce the level of authorised ODs down to a sensible limit based on the amount of money being paid into the account each month, say 10% of your monthly deposits.

Zero_Sum

pdel61 wrote: »

then to reduce the level of authorised ODs down to a sensible limit based on the amount of money being paid into the account each month, say 10% of your monthly deposits.

Dont think you've thought that one through mind:rotfl:

Time2Go_25

Zero_Sum wrote: »

Dont think you've thought that one through mind:rotfl:

On what basis do you think that.

Say you pay in on average £2000 a month you would be allowed an authorised overdraft of £200, not sure I see the problem.:beer:

Zero_Sum

pdel61 wrote: »

On what basis do you think that.

Say you pay in on average £2000 a month you would be allowed an authorised overdraft of £200, not sure I see the problem.:beer:

You know how funding multiple bank accounts works?
I just slosh that £2k between 2 accounts multiple times & bingo ive got 2 OD's for £1000 each current account i have

smallbiznewbie

Takmon wrote: »

Going into an overdraft is a sign of poor financial management, if people managed their money correctly they wouldn't need an overdraft and wouldn't be charged. I've never gone into an overdraft in my entire life.

So they should be charged high fees for doing this to show going into an overdraft is not a normal thing to be doing and they need to manage their money better.

So it's not due to extreme poverty and the need to pay for electricity? Or immaturity? Or mental illness? Or a simple inability to cope with life? Or a sudden family emergency that has to be dealt with immediately? Or alcoholism? Or forgetting about the small purchase you made last week? Or simply a mistake?



I see SO many of these types of answers that basically say, 'I never go overdrawn...' Just for once I'm not going to bite my tongue... but I am being really, really polite.

No_6

another topic spoilt by robot replies

Time2Go_25

Zero_Sum wrote: »

You know how funding multiple bank accounts works?
I just slosh that £2k between 2 accounts multiple times & bingo ive got 2 OD's for £1000 each current account i have

True but it would be easy for the banks to know that it's just a transfer from another bank and discount that.

Paul_Herring

smallbiznewbie wrote: »

So it's not due to extreme poverty and the need to pay for electricity? Or immaturity? Or mental illness? Or a simple inability to cope with life? Or a sudden family emergency that has to be dealt with immediately? Or alcoholism? Or forgetting about the small purchase you made last week? Or simply a mistake?

Are you saying the majority of all regular uses of overdrafts are entirely attributable to those things?

At least some of those are one-off things (emergency, forgetting, mistakes.)