HSBC to hike overdraft fees from March

Eco_Miser

Lex068 wrote: »

You might be right I don’t really want to leave but this might be the time. I was quite happy and content before but nothing lasts forever

Moving wasn't the solution suggested.

Herbalus

Lex068 wrote: »

You might be right I don’t really want to leave but this might be the time. I was quite happy and content before but nothing lasts forever

What you will find is that most banks will end up somewhere the same. Nationwide changed its structure to guess what...39.9% also in the summer. It’s due to regulation so other banks who have a different charging structure with daily fees will be changing soon.

So careful if you do move, as they might change to the same % anyway.

YorkshireBoy

Lex068 wrote: »

I think it’s probably going to more like £20+ which to me seems like a lot.

You still think, or you thought before I explained the basic maths to you?

If a 2% pay rise is worth £600 a year to you, then what's a 4% pay rise worth? By your reckoning it's around £1,500, not £1,200.

Still think it'll be £20?

Thrugelmir

Lex068 wrote: »

You might be right I don’t really want to leave but this might be the time. I was quite happy and content before but nothing lasts forever

There's been a progressive regulatory review of all forms of borrowing. The noose is only going to get even tighter as time passes.

hounslowfish

There’s one aspect of this change that baffles me.

Interest is capped for unarranged oberdrafts but not for arranged overdrafts. So having an arranged overdraft is now more expensive than having an unarranged??! What is then the motivation for arranging an overdraft?

As someone with an arranged overdraft of £750 which I do sometimes use, would I save money by asking the bank to remove it so I benefit from the unarranged cap?

eskbanker

hounslowfish wrote: »

There’s one aspect of this change that baffles me.

Interest is capped for unarranged oberdrafts but not for arranged overdrafts. So having an arranged overdraft is now more expensive than having an unarranged??! What is then the motivation for arranging an overdraft?

As someone with an arranged overdraft of £750 which I do sometimes use, would I save money by asking the bank to remove it so I benefit from the unarranged cap?

They haven't explicitly come out and said it (to the best of my knowledge) but the expectation is that they simply won't allow accounts to become overdrawn (or at least heavily so) if there isn't an arranged facility.

Even if it was in their interests to do so before, the new charging regime will obviously make it less so, so it wouldn't make sense for them to facilitate large unarranged overdrafts in future, and ever-tighter controls on spending (e.g. online authorisation of contactless payments) mean that it's now more practical to decline transactions and proactively prevent customers from going overdrawn if the bank chooses not to allow this....

Anwoth51

I’ve had a Home Management account for over 20 years. About 3 yrs ago HSBC said they no longer do these and changed it to a Bank Account. It still works the same. I work out my bills for the year divide it by 12 and that is what I pay each month. Ive not had to worry about my bills but now I don’t know how I am going to manage with the new 39.9% rate. The overdraft just rolls over every month year after year. I do pay interest but 39.9 is disgraceful.

eskbanker

Anwoth51 wrote: »

I’ve had a Home Management account for over 20 years. About 3 yrs ago HSBC said they no longer do these and changed it to a Bank Account. It still works the same. I work out my bills for the year divide it by 12 and that is what I pay each month. Ive not had to worry about my bills but now I don’t know how I am going to manage with the new 39.9% rate. The overdraft just rolls over every month year after year. I do pay interest but 39.9 is disgraceful.

If you're saying that you've constantly been in an overdraft for years and have no realistic way of repaying it, then that's unsustainable regardless of movements in interest rates - they can call these facilities in at any time and demand immediate repayment, so overdrafts really aren't suitable for long-term borrowing.

Have you investigated the possibility of changing it to a loan, or perhaps consulted with a debt charity to establish what options you have?

In terms of assistance on here, it'll be worth reading https://www.moneysavingexpert.com/banking/cut-overdraft-costs/ and potentially posting on the debt-free wannabe board....

Thrugelmir

Anwoth51 wrote: »

I work out my bills for the year divide it by 12 and that is what I pay each month. Ive not had to worry about my bills but now I don’t know how I am going to manage with the new 39.9% rate. The overdraft just rolls over every month year after year. I do pay interest but 39.9 is disgraceful.

Increase the amount you pay into the account every month and build a buffer. Then the account wouldn't incur interest charges at all. Resulting in your money going further.

Consumerist

hounslowfish wrote: »

. . . Interest is capped for unarranged oberdrafts but not for arranged overdrafts. So having an arranged overdraft is now more expensive than having an unarranged??! What is then the motivation for arranging an overdraft?
. . .

Any payment requested whilst in (or taking you into) unarranged overdraft will be subject to a paid/unpaid transaction fee (i.e. whether it is paid or not - at the banks' discretion). The going rate at the moment is around £25 a pop.