New HSBC charges? Help!!

Ldar

Hi all,

I’ve just read today about the new overdraft charges from HSBC from next year. They’ll be 39.9% and I called the contact centre but they refused to give me any figures regarding how much it could cost me per month.
My total arranged overdraft is £4000 and due to being on maternity, I am using it continually and on the day I get paid it will go down to -£2500 and it reduces from there fairly quickly once bills go out.

With this new rate, what sort of charge can I expect per month?

Thanks all

18cc

40% interest rate on £4000 is about £1600 a year - divide by 12 to get the amount per month or by 52 to get the amount per week.

40% interest rate on £2500 is £1000 a year.

jimjames

I thought the charges email I received earlier said it was capped at £20 per month? Might be worth checking your email and their website

Ben8282

How much per-month is your £4000 overdraft currently costing you?

SnowTiger

jimjames wrote: »

I thought the charges email I received earlier said it was capped at £20 per month? Might be worth checking your email and their website

The £20 a month cap applies to unarranged overdrafts only, apparently.

At first glance it appears punters who use an arranged overdraft may be worse off than those who use an unarranged overdraft.

I suspect, in practice, on an account by account basis HSBC will either reject transactions that would cause an unauthorised overdraft or allow such accounts to slip in to a small negative balance.

meer53

jimjames wrote: »

I thought the charges email I received earlier said it was capped at £20 per month? Might be worth checking your email and their website

HSBC is scrapping its £5 daily usage fee for unarranged overdrafts and reducing the maximum monthly cost for using one to £20. Interest charged on an arranged overdraft isn't capped.

Ergates

SnowTiger wrote: »

The £20 a month cap applies to unarranged overdrafts only, apparently.

At first glance it appears punters who use an arranged overdraft may be worse off than those who use an unarranged overdraft.

I suspect, in practice, on an account by account basis HSBC will either reject transactions that would cause an unauthorised overdraft or allow such accounts to slip in to a small negative balance.

Yes, people without an arranged overdraft won't be able to go £4000 overdrawn.

Ergates

Ldar wrote: »

Hi all,

I’ve just read today about the new overdraft charges from HSBC from next year. They’ll be 39.9% and I called the contact centre but they refused to give me any figures regarding how much it could cost me per month.
My total arranged overdraft is £4000 and due to being on maternity, I am using it continually and on the day I get paid it will go down to -£2500 and it reduces from there fairly quickly once bills go out.

With this new rate, what sort of charge can I expect per month?

Thanks all

Overdrafts are not meant to be used for long-term borrowing, they are not a cheap form of credit.

born_again

Take out a loan to get out of the O/D cheaper interest rate. Then get the O/D removed.