Lloyds bank overdraft limit reduced

Carrot007

eskbanker wrote: »

I would, given that the FCA has effectively just banned them from April 2020!

https://www.fca.org.uk/news/press-releases/fca-confirms-biggest-shake-up-overdraft-market:

Never specified for overdraft. Just for something. Maybe even just having an account. (on the back of banning if for other things (fun of unindented consequences and all that)).

Ben8282

Carrot007 wrote: »

Yes I am if they expect it to remain.


Of course there are other factors to consider. However never use is expect it to lower seems reasonable.


You want a safety buffer? Get a decent credit card. (and use it at times and pay off in full each month).

No you should not use the overdraft. Banks do not normally withdraw overdrafts for non-use. The phrasing of the letter in this instance is a polite way of reducing the overdraft facility for a different reason without upsetting the account holder.
And as for the credit card suggestion, that will not provide a current account safety buffer. In fact, should the credit card holder overspend even slightly on the credit card paying it in full would then presumably result in an unauthorised overdraft.

Carrot007

Ben8282 wrote: »

No you should not use the overdraft. Banks do not normally withdraw overdrafts for non-use. The phrasing of the letter in this instance is a polite way of reducing the overdraft facility for a different reason without upsetting the account holder.
And as for the credit card suggestion, that will not provide a current account safety buffer. In fact, should the credit card holder overspend even slightly on the credit card paying it in full would then presumably result in an unauthorised overdraft.

You use the overdraft or expect it to be removed or severely reduced.


You pay attention to your spending and move say shopping to the credit card if you need a buffer. It aint hard.


If you repeatadly cannot afford to live then you have greater issues and need the advice of a different board around here that is very good.

JimArnold

Ben8282 wrote: »

No you should not use the overdraft. Banks do not normally withdraw overdrafts for non-use. The phrasing of the letter in this instance is a polite way of reducing the overdraft facility for a different reason without upsetting the account holder.
And as for the credit card suggestion, that will not provide a current account safety buffer. In fact, should the credit card holder overspend even slightly on the credit card paying it in full would then presumably result in an unauthorised overdraft.

That was my assumption but I cannot come up with another reason why it has been reduced - its been at that level for over 20 years and I certainly haven't used it in 10+ years Of course the FSA have been hammering banks on unauthorised overdraft charges so that payments over your limit are likely to be refused - with pretty nasty results on your credit history

redux

I think I can add a couple of comments.

I've received two of these letters from Halifax, the last telling me of an upcoming reduction from £1500 to £370.

Both times, I've phoned up, saying I didn't want to reduce the limit that much, and besides, I was indeed using the overdraft.

I surmised that their analysis was only looking at the balance at the change over from one day to the next, and not throughout the day, so paying out of one account when you know something is coming in the same day doesn't seem to be observed.

Asking on the phone to review or cancel the decision means it has to go to off manually to the underwriting team to decide, but there is another quick way around the problem, suggested by both people I spoke to.

You can log in to the account online, and ask to reduce the overdraft, by even as little as £10. It goes through in a few seconds.

This overrides the decision in the letter.

So about a year ago I asked to reduce from £2000 to £1500, then a month ago to £1490. I foresee £1480 in a few months' time ...

Missus_Hyde

We've had a £500 overdraft with Lloyds since the year dot and probably haven't used it for the last thirty years.
I haven't bothered to change or reduce it and probably won't unless they object. We also have a small a/c with them with £100 overdraft on it, which again we probably won't use, but it's handy to have it there anyway.:)

Blackbeard_of_Perranporth

Mine has not been reduced, it still remains exactly what it has been for twenty years!
£0

nick74

Yes I had this letter some time ago. I phoned Lloyds, they apologised and immediately reinstated the original overdraft limit.