Question about overdrafts

Finbar_2

Hi,

I've a query about overdrafts which some of you may be able to answer from experience. I have recently returned as a customer to RBS (3 months ago) after banking with them for almost 20 years until last summer. Last week I enquired about extending my overdraft to £800 from £250 as I'm in the process of changing jobs and will incur a delay with receiving my first salary payment - I’d be able to pay this overdraft back in 4 months. I was told that they could only extend it by £50. I queried this but was told that because I was a new customer I had to build up my credit worthiness with them - again. Despite telling the adviser of my previous good relationship with RBS (I incurred few penalty charges despite being a student three times), future earnings, etc, it made no difference.

I did think that it was unlikely that they would consider £800 because I was a returning customer but I am bewildered that there is no flexibility to discuss alternative limits based on my future earnings, savings (e.g. I have a savings account with more than enough to cover what I need but don't want to use it), etc. I find it incongruous that I could rack up the debt on my RBS credit card, which I'm sure they would be delighted for me to use, or apply for an RBS loan. I noted that a student is potentially eligible for a considerable interest free overdraft with RBS while a returning customer in full time employment earning a reasonable salary is not. It seems that no human intervention can override the computer system.

Is there any point in writing to my branch and asking them to review their decision?

I understand that an overdraft is a privilege and banks need systems to assess risk and credit worthiness but surely a system which recognises an individual’s relationship with a bank (interestingly I’ve retained my customer reference number with RBS) is better than one that solely assesses credit worthiness based on the length of time I’ve had an account.

Many thanks!

CLAPTON

why ever dont you want to use your savings... its that what they are for (rainy days) and also you will almost certainly pay a much more interest on the OD than you earn on the savings.

Finbar_2

In any other circumstances I would use my savings but I've a number of expenses coming up in January which I need to meet. Maybe I should just put it the expenses on my card.