Any Current Accounts that block payments before going overdrawn?

LunaLater

blue.peter said:

I have a Nationwide current account. When I accidentally took my debit card (instead of my credit card) out of my wallet to make a payment, it was declined because the payment would have taken me overdrawn.

That works when the terminal is “online” so can check in real-time, but some things (petrol pumps for example) can’t, which is where you can have a problem.

pridehappy

I completely agree, Lloyds Bank are honestly the worst I’ve dealt with, to the point they don’t fit their purpose and don’t have an individual care for customers.

All UK children’s current accounts must block the ability of going into overdraft, although Lloyds Bank and HSBC both seemed to allow my son to go overdrawn.

He’s used Nationwide for quite a while and it’s never let him go overdrawn, and just sends him a reminder it’s been declined. I believe this is the case with all current accounts 18+ too, will not allow to go overdrawn unless the overdraft is arranged. Plus, no impact on credit score!

eskbanker

LunaLater said:

eskbanker said:

I was under the impression that under 18s in the UK aren't allowed to be given credit but can't find authoritative support for this in a quick search....

Not quite. They can’t enter into a contract for it, so can’t be pursued through the courts.

Thanks, do you know where this is specified definitively?

Rob5342

LunaLater said:

eskbanker said:

I was under the impression that under 18s in the UK aren't allowed to be given credit but can't find authoritative support for this in a quick search....

A notebook with deposits and spending works perfectly for this, and could inculcate a habit that can be extremely valuable for adult life.

It's far easier just to check the balance in the app every time she spends, like an adult would.

To echo the above comments when we opened a Nationwide FlexOne for our daughter they said they would do as much as they could to stop her getting overdrawn, but couldn't absolutely guarantee it as offline transactions such as on planes or on public transport could take her overdrawn. They said If she did go overboard they would freeze the account until the balance was cleared. In practice the chances of.a child making enough of these types of transactions to get significantly overdrawn is very low.

snarffie

Rob5342 said:

LunaLater said:

eskbanker said:

I was under the impression that under 18s in the UK aren't allowed to be given credit but can't find authoritative support for this in a quick search....

A notebook with deposits and spending works perfectly for this, and could inculcate a habit that can be extremely valuable for adult life.

It's far easier just to check the balance in the app every time she spends, like an adult would.

To echo the above comments when we opened a Nationwide FlexOne for our daughter they said they would do as much as they could to stop her getting overdrawn, but couldn't absolutely guarantee it as offline transactions such as on planes or on public transport could take her overdrawn. They said If she did go overboard they would freeze the account until the balance was cleared. In practice the chances of.a child making enough of these types of transactions to get significantly overdrawn is very low.

This is the key point. She can potentially go overdrawn due to the technical reasons mentioned by others. 

This would then freeze the account for any future payments, preventing a large rolling overdraft.
The charge for the overdraft would be minimal (daily interest only) and can be paid off pretty quickly as she would be notified of the overdraft in the app.

There is the technical question raised above around whether the child would actually have to pay the overdraft, but it’s just an academic technicality as the account would be frozen until the balance is returned to 0, so the customer would have to pay or apply for an account elsewhere (for the sake of a few quid).

Interesting thread though.

WillPS

pridehappy said:

I completely agree, Lloyds Bank are honestly the worst I’ve dealt with, to the point they don’t fit their purpose and don’t have an individual care for customers.

All UK children’s current accounts must block the ability of going into overdraft, although Lloyds Bank and HSBC both seemed to allow my son to go overdrawn.

He’s used Nationwide for quite a while and it’s never let him go overdrawn, and just sends him a reminder it’s been declined. I believe this is the case with all current accounts 18+ too, will not allow to go overdrawn unless the overdraft is arranged. Plus, no impact on credit score!

Not true. There are situations where an under 18 (or any other type) account can become overdrawn, although they are very rare now online authorisation is almost ubiquitous.

This will apply to Nationwide, Starling, HSBC, Lloyds and any other debit card issuer.

Bigwheels1111

I let my niece use my account, via Apple Pay.
She knows how much she has a month to spend and apart from 1 emergency so far she has never gone over her budget.
I got a call at 23.00pm she was left stranded when the last bus did not turn up, 8 miles from home.
No problem, I arranged a cab, got his name, reg car colour etc. Plus a password only she would know.
To make it as safe as possible. 
She checks apple before paying to see how much has been spent each month.
As I can just block the card it’s not an issue, Trust is the issue.
I get a notification as soon as money has been spent.
I taught her to save 50% of her income if possible, live within your means.
Next week she is 18, Where has my little baby girl gone.
This year she has saved 1k form Saturday work and hair dressing.
Still at college.
I think she will be happy with her present this year, I’ve doubled her savings.
Now I need to teach her to drive. Anyone know a good prayer 🙏 to protect me.