Chase UK discussion

[Deleted User]

Sensory said:

Deleted_User said:

Malkytheheed said:

Deleted_User said:

Sensory said:

Deleted_User said:

Sensory said:

Deleted_User said:

Zanderman said:

Deleted_User said:

Daliah said:

adamp87 said:

 
It’s a new bank, it’ll take time to get everything right.

It’s a new bank with a 200 year banking history which took three years to launch a UK current account without Direct Debits. Not even true new banks like Metro, Monzo or Starling managed to do that.

I doubt that too many people will fall for the 5% roundup, as that’s merely a gizmo worth just pennies. Their limited 1% cashback is presently the only redeeming and unique feature

Clearly at the moment is basically a pre-paid card, I suspect the proper banking systems are not ready yet maybe?

Metro, Starling and Monzo all use third party services to process their payments, or at least did at launch. I am betting Chase was not going to accept to that. Metro used to use Barclays for payment processing, or at least part of the process. Not sure if it still does.

Well it's clearly more than a 'pre-paid card'.  It's a bank account.  Pre-paid cards aren't.


It's just odd.  I'm sure it will get better.  But really odd that they launched like this.

They call it a bank account, that doesn't mean it is. No overdraft or direct debits. No credit check? 

I suspect the project over ran and they did not finish in time. 

It has a sort code and account number, allows transfers in and out including wages/salaries and standing orders, and unlike Revolut, Chase UK has a UK banking licence with full FSCS protection. They do soft searches just like Monzo and Starling for identity checking.

The associated debit card is more akin to a pre-paid card, but the debit card is linked to the account.

Overdrafts certainly aren’t necessary for bank accounts, although the lack of direct debits is a glaring omission that even basic accounts and Revolut have.

This is what Revolut does, and it is currently applying for a banking license. Even when they have the license, I would not call their accounts a bank account. And I see this Chase account as not really a proper bank account, yet.

Didin't Monzo operate with pre paid cards to start with? Once chase allows DD and overdraft I will happily switch, but until then its just going to sit on the side with the odd small payment once a month. 

They can call it a bank account because bank accounts aren't dependent on having overdraft and direct debit facilities.

Why is an overdraft so important to you?

Because I like to have the safety net and often go into overdraft by a couple of hundreds. My pay fluctuates every month by that amount so on some months I need to cover the difference.

Really doesn't make any sense. Just keep a couple hundred extra in your account and even if your pay fluctuates you wont go into your overdraft and wont pay overdraft fees. 
I mean there is basically never a "good" rerason to use an overdraft, it's just a very very expensive loan you take out when you have no money. So basically a payday loan. Not good finnancial behaviour at all. 

I am happy to pay £90 a year for the flexibility. As are many others. It also does not make businesses sense for Chase not to have an overdraft as they can make money from it. 

My spending and pay always is going up and down. Where are these £200 coming from, a tree? I have strict saving goals each month which I will not breech and I would not take money out of savings unless it was an option of last resort. 

That is not financially sound behaviour. You are choosing to set aside money into savings whilst going into overdraft. You are wasting £90 a year for no reason, unless that extra few hundred can generate more than £90 a year elsewhere (highly unlikely). It’s like Martin recommends, to pay off debts with savings.

Another way to look at it: every month you pay back the overdraft (plus fees), that money comes from your income, which is money you then cannot save; in effect, you are using savings to pay back the overdraft anyway, plus fees.

I make more than £90 from interest at least. Including premium bonds this last year, I have made it many times over although these are not certain to occur again. It is the system I have used for many years and it keeps may savings on target. Far less likely to spend once I am in overdraft. Last year I saved about 18k, in comparison £90 is peanuts. I am not saying £90 isn't a decent amount of money, but in comparison to what I am saving and the money which is going in and out of the account, it need not concern me.

Sensory

Deleted_User said:

Sensory said:

Deleted_User said:

Malkytheheed said:

Deleted_User said:

Sensory said:

Deleted_User said:

Sensory said:

Deleted_User said:

Zanderman said:

Deleted_User said:

Daliah said:

adamp87 said:

 
It’s a new bank, it’ll take time to get everything right.

It’s a new bank with a 200 year banking history which took three years to launch a UK current account without Direct Debits. Not even true new banks like Metro, Monzo or Starling managed to do that.

I doubt that too many people will fall for the 5% roundup, as that’s merely a gizmo worth just pennies. Their limited 1% cashback is presently the only redeeming and unique feature

Clearly at the moment is basically a pre-paid card, I suspect the proper banking systems are not ready yet maybe?

Metro, Starling and Monzo all use third party services to process their payments, or at least did at launch. I am betting Chase was not going to accept to that. Metro used to use Barclays for payment processing, or at least part of the process. Not sure if it still does.

Well it's clearly more than a 'pre-paid card'.  It's a bank account.  Pre-paid cards aren't.


It's just odd.  I'm sure it will get better.  But really odd that they launched like this.

They call it a bank account, that doesn't mean it is. No overdraft or direct debits. No credit check? 

I suspect the project over ran and they did not finish in time. 

It has a sort code and account number, allows transfers in and out including wages/salaries and standing orders, and unlike Revolut, Chase UK has a UK banking licence with full FSCS protection. They do soft searches just like Monzo and Starling for identity checking.

The associated debit card is more akin to a pre-paid card, but the debit card is linked to the account.

Overdrafts certainly aren’t necessary for bank accounts, although the lack of direct debits is a glaring omission that even basic accounts and Revolut have.

This is what Revolut does, and it is currently applying for a banking license. Even when they have the license, I would not call their accounts a bank account. And I see this Chase account as not really a proper bank account, yet.

Didin't Monzo operate with pre paid cards to start with? Once chase allows DD and overdraft I will happily switch, but until then its just going to sit on the side with the odd small payment once a month. 

They can call it a bank account because bank accounts aren't dependent on having overdraft and direct debit facilities.

Why is an overdraft so important to you?

Because I like to have the safety net and often go into overdraft by a couple of hundreds. My pay fluctuates every month by that amount so on some months I need to cover the difference.

Really doesn't make any sense. Just keep a couple hundred extra in your account and even if your pay fluctuates you wont go into your overdraft and wont pay overdraft fees. 
I mean there is basically never a "good" rerason to use an overdraft, it's just a very very expensive loan you take out when you have no money. So basically a payday loan. Not good finnancial behaviour at all. 

I am happy to pay £90 a year for the flexibility. As are many others. It also does not make businesses sense for Chase not to have an overdraft as they can make money from it. 

My spending and pay always is going up and down. Where are these £200 coming from, a tree? I have strict saving goals each month which I will not breech and I would not take money out of savings unless it was an option of last resort. 

That is not financially sound behaviour. You are choosing to set aside money into savings whilst going into overdraft. You are wasting £90 a year for no reason, unless that extra few hundred can generate more than £90 a year elsewhere (highly unlikely). It’s like Martin recommends, to pay off debts with savings.

Another way to look at it: every month you pay back the overdraft (plus fees), that money comes from your income, which is money you then cannot save; in effect, you are using savings to pay back the overdraft anyway, plus fees.

I make more than £90 from interest at least. Including premium bonds this last year, I have made it many times over although these are not certain to occur again. It is the system I have used for many years and it keeps may savings on target. Far less likely to spend once I am in overdraft. Last year I saved about 18k, in comparison £90 is peanuts. I am not saying £90 isn't a decent amount of money, but in comparison to what I am saving and the money which is going in and out of the account, it need not concern me.

The £200 alone is not making you £90 in interest.

I’ll use your figures to help you understand how you can avoid fees and still save exactly the same amount (so you can spend the fees on something else, or save more).

E.g £5,000 net monthly income

£18K savings = £1,500 a month saved

Method 1:
Month 1 = £-200 (in overdraft)
Month 2 = £3,300 (5000 - 1500 - 200)
Subtract overdraft fees.

Method 2:
Month 1 = £0 (£200 taken from savings)
Month 2 = £3,500 (5000 - 1500)
Top up savings with another £200.
Month 2 = £3,300
No overdraft fees charged.

It doesn’t make sense to borrow £200 from overdraft when you can just ‘borrow’ from your savings, and replace the borrowed savings with your new income (instead of repaying the overdraft plus fees).

[Deleted User]

I thank you for the figures but as I stated my salary and spending changes per month so having fixed figures would never work. I make up for the lost savings or use of overdraft when I have a good month.

I meant I make over £90 over the course of the year from interest, so the overdraft is really free. I want to be hassle free and £90 is an acceptable price per year. £7.50 a month. 

Sensory

Deleted_User said:

I thank you for the figures but as I stated my salary and spending changes per month so having fixed figures would never work. I make up for the lost savings or use of overdraft when I have a good month.

I meant I make over £90 over the course of the year from interest, so the overdraft is really free. I want to be hassle free and £90 is an acceptable price per year. £7.50 a month. 

Then never mind the figures. The whole point of that example was to show that the net balance is the same across both methods (regardless of what it actually is or what you earn), except one method (yours) has overdraft fees and the other does not. The net monthly income could have been an algebraic ‘x’ but I thought that might confuse the matter. Instead of £3,300 it would be “x -1700” to account for variable income/expenditure.

Do you understand that borrowing from your own savings is cheaper than borrowing from overdraft? Absolutely, make up for your loss of savings when you have a good month (because you used savings to avoid overdraft); what point is there in actually using overdraft if you don’t require it?

That £90 is not free. If you have £10,000 in a savings account paying 1.5% interest, your interest rate is effectively reduced to 0.6%, like a penalty for withdrawing early. You’d have less money than you otherwise would.

You are obviously used to your system and it works for you within your understanding of personal finance, but the fact remans you are wasting money. The irony is that you are wasting money in the name of saving money. You believe overdraft is a utility to help you meet your savings targets, but it’s actually doing the opposite by detracting from them.

With all that said, I will say no more on this because it’s your money.

Alex9384

wiseonesomeofthetime said:

That said, I would love to know where I could get over £90 interest from £200 in a savings account (rather than current account buffer), to cover those overdraft fees, as I do exactly that with my accounts.

Here for example    See those percentages? That's for the last year.

Imagine you bought LUNA for £200.

Alex9384

I know, I know, those are not savings accounts...  but someone might prefer it over 0.5% interest.

Zanderman

Alex9384 said:

I know, I know, those are not savings accounts...  but someone might prefer it over 0.5% interest.

But in the context of the recent discussion your point is pointless.  As you know.

[Deleted User]

Sensory said:

Deleted_User said:

I thank you for the figures but as I stated my salary and spending changes per month so having fixed figures would never work. I make up for the lost savings or use of overdraft when I have a good month.

I meant I make over £90 over the course of the year from interest, so the overdraft is really free. I want to be hassle free and £90 is an acceptable price per year. £7.50 a month. 

Then never mind the figures. The whole point of that example was to show that the net balance is the same across both methods (regardless of what it actually is or what you earn), except one method (yours) has overdraft fees and the other does not. The net monthly income could have been an algebraic ‘x’ but I thought that might confuse the matter. Instead of £3,300 it would be “x -1700” to account for variable income/expenditure.

Do you understand that borrowing from your own savings is cheaper than borrowing from overdraft? Absolutely, make up for your loss of savings when you have a good month (because you used savings to avoid overdraft); what point is there in actually using overdraft if you don’t require it?

That £90 is not free. If you have £10,000 in a savings account paying 1.5% interest, your interest rate is effectively reduced to 0.6%, like a penalty for withdrawing early. You’d have less money than you otherwise would.

You are obviously used to your system and it works for you within your understanding of personal finance, but the fact remans you are wasting money. The irony is that you are wasting money in the name of saving money. You believe overdraft is a utility to help you meet your savings targets, but it’s actually doing the opposite by detracting from them.

With all that said, I will say no more on this because it’s your money.

Of course I do. It is just what is easier for me. As I stated in my first or so post, I have happy to spend the £90 a year, yes it is a waste, but it works for me. 

Another factor which I failed to mention is that I am trying to live as if I had a mortgage. No matter what I must pay into the savings. This way I can test myself and maintain living standard appropriate to what I would have if paying a mortgage. I know on MSE every penny lost is a sin but it that is how I like to do it. When I actually have a mortgaged I will be far more strict on my spending so should be positive each month just about. In addition my income will increase and become more stable soon so the problem should correct itself. 

Emmia

Deleted_User said:

Sensory said:

Deleted_User said:

I thank you for the figures but as I stated my salary and spending changes per month so having fixed figures would never work. I make up for the lost savings or use of overdraft when I have a good month.

I meant I make over £90 over the course of the year from interest, so the overdraft is really free. I want to be hassle free and £90 is an acceptable price per year. £7.50 a month. 

Then never mind the figures. The whole point of that example was to show that the net balance is the same across both methods (regardless of what it actually is or what you earn), except one method (yours) has overdraft fees and the other does not. The net monthly income could have been an algebraic ‘x’ but I thought that might confuse the matter. Instead of £3,300 it would be “x -1700” to account for variable income/expenditure.

Do you understand that borrowing from your own savings is cheaper than borrowing from overdraft? Absolutely, make up for your loss of savings when you have a good month (because you used savings to avoid overdraft); what point is there in actually using overdraft if you don’t require it?

That £90 is not free. If you have £10,000 in a savings account paying 1.5% interest, your interest rate is effectively reduced to 0.6%, like a penalty for withdrawing early. You’d have less money than you otherwise would.

You are obviously used to your system and it works for you within your understanding of personal finance, but the fact remans you are wasting money. The irony is that you are wasting money in the name of saving money. You believe overdraft is a utility to help you meet your savings targets, but it’s actually doing the opposite by detracting from them.

With all that said, I will say no more on this because it’s your money.

Of course I do. It is just what is easier for me. As I stated in my first or so post, I have happy to spend the £90 a year, yes it is a waste, but it works for me. 

Another factor which I failed to mention is that I am trying to live as if I had a mortgage. No matter what I must pay into the savings. This way I can test myself and maintain living standard appropriate to what I would have if paying a mortgage. I know on MSE every penny lost is a sin but it that is how I like to do it. When I actually have a mortgaged I will be far more strict on my spending so should be positive each month just about. In addition my income will increase and become more stable soon so the problem should correct itself. 

If your intention is to live like you have a mortgage, then you should be stricter now...

As it is I wonder whether you can actually afford the size of mortgage you want - home ownership means you are financially responsible for maintenance and other costs, and living / saving in a way that means you're regularly going into your overdraft indicates that your artificial "budget" is insufficient for your "actual" outgoings. 

Permanently living in a way where your belt is always on the tightest notch, when your income and preferred lifestyle choices means this is a false state of affairs, isn't really sustainable in my opinion...

[Deleted User]

Emmia said:

Deleted_User said:

Sensory said:

Deleted_User said:

I thank you for the figures but as I stated my salary and spending changes per month so having fixed figures would never work. I make up for the lost savings or use of overdraft when I have a good month.

I meant I make over £90 over the course of the year from interest, so the overdraft is really free. I want to be hassle free and £90 is an acceptable price per year. £7.50 a month. 

Then never mind the figures. The whole point of that example was to show that the net balance is the same across both methods (regardless of what it actually is or what you earn), except one method (yours) has overdraft fees and the other does not. The net monthly income could have been an algebraic ‘x’ but I thought that might confuse the matter. Instead of £3,300 it would be “x -1700” to account for variable income/expenditure.

Do you understand that borrowing from your own savings is cheaper than borrowing from overdraft? Absolutely, make up for your loss of savings when you have a good month (because you used savings to avoid overdraft); what point is there in actually using overdraft if you don’t require it?

That £90 is not free. If you have £10,000 in a savings account paying 1.5% interest, your interest rate is effectively reduced to 0.6%, like a penalty for withdrawing early. You’d have less money than you otherwise would.

You are obviously used to your system and it works for you within your understanding of personal finance, but the fact remans you are wasting money. The irony is that you are wasting money in the name of saving money. You believe overdraft is a utility to help you meet your savings targets, but it’s actually doing the opposite by detracting from them.

With all that said, I will say no more on this because it’s your money.

Of course I do. It is just what is easier for me. As I stated in my first or so post, I have happy to spend the £90 a year, yes it is a waste, but it works for me. 

Another factor which I failed to mention is that I am trying to live as if I had a mortgage. No matter what I must pay into the savings. This way I can test myself and maintain living standard appropriate to what I would have if paying a mortgage. I know on MSE every penny lost is a sin but it that is how I like to do it. When I actually have a mortgaged I will be far more strict on my spending so should be positive each month just about. In addition my income will increase and become more stable soon so the problem should correct itself. 

If your intention is to live like you have a mortgage, then you should be stricter now...

As it is I wonder whether you can actually afford the size of mortgage you want - home ownership means you are financially responsible for maintenance and other costs, and living / saving in a way that means you're regularly going into your overdraft indicates that your artificial "budget" is insufficient for your "actual" outgoings. 

Permanently living in a way where your belt is always on the tightest notch, when your income and preferred lifestyle choices means this is a false state of affairs, isn't really sustainable in my opinion...

I am strict enough, all saving goals have been achieved. Keeping about £400/£500 debt going in the overdraft constantly is how I like to do it. If I needed to, I could cover it at once. I can't just say keep £500 in an account and cover it, because another month it may go even more out and then I'd start burning savings. This way I can easily see how much I need to cover and cover it on a good month. The pay goes up and down a lot. But there is always a good month every other month to cover it.

Yes I can afford the mortgage because I pay rent currently which I would not pay if I had my own home, cost of bills etc would not go anywhere near the cost of rent I currently pay. If anything I will have more money I can spend per month when I own the home. I will have to say some of it or overpay on the mortgage if possible when I have a good month.

Thanks MSE for the last two pages of attack on a person using an overdraft well within their means. Classic MSE. As another poster stated, it is my money and if I so wish I will chuck it in the sewer. Can you suggest a good drain? in Jesus name I don't care about the £90 a year I pay in this overdraft. Even if went to £200 per year it would not bother me, living in London you learn to watch your hard earned cash being p*ssed up the wall so I am used to it. Even with my working class roots.

Back on topic, I hope Chase launch their overdraft soon.