Barclays Removing overdraft

Robintones

MattMattMattUK said:

Robintones said:

How often do you use insurance or a safety net when you walk a high wire, or even an airbag in a car?

That is irrelevant. You can manage your finances in a way that an overdraft is not required. It costs banks to have an overdraft facility available even if you never use it.

You are also missing the point that when looking at affordability when lending banks are not allowed to look at assets, but only income. If you currently have zero/minimum income then you will fail the affordability criteria for that borrowing, hence them withdrawing the overdraft. 

Matt, How can the same bank deem an overdraft unaffordable but a short-term unsecured loan ten times bigger affordable? 

Robintones

IanManc said:

Robintones said:

I have been with Barclays for nearly fifty years. 

.......................

  I am looking to move banks now and will be reading recommendations for banks which understand retired but "not dead yet" customers.

I have banked with Barclays for over 40 years. A couple of years ago they removed my overdraft facility of £1000, which I had never used. 

I couldn't care less that Barclays removed my unused, and therefore clearly unnecessary, overdraft facility and I suggest you take the same approach.

By "looking to move banks" because of this if you are satisfied with how your account is working in all other respects then you are just wasting your own time and just punishing yourself. Meanwhile, Barclays wouldn't even notice you'd gone.

You clearly don't need an overdraft facility. Stop choosing to be offended by its removal.

Ian, over the last few years, interest rates have been low so honestly where you kept cash was irrelevant. Now, with good rates to be achieved, managing money is important. As most of these accounts do not pay out in the month you move money, then cash management is more important. This means having the headroom of an overdraft may well be useful, obviously balancing the cost v loss of interest. But if that is of no concern to you, then fine, but it is to me. And having it withdrawn for spurious reasons is wrong, and a reason to move banks. I was interested if Barclays was doing this widely as hinted by my Customer relationship deepening contact at Barclays.

eskbanker

Robintones said:
over the last few years, interest rates have been low so honestly where you kept cash was irrelevant. Now, with good rates to be achieved, managing money is important. As most of these accounts do not pay out in the month you move money, then cash management is more important. This means having the headroom of an overdraft may well be useful, obviously balancing the cost v loss of interest.

I don't really understand the bolded logic - why does the scheduling of interest payment affect capital movement?

Robintones said:

at the moment I am keeping all my funds in fixed bonds or high-interest accounts where moving cash incurs a penalty, so the short-term cost of an overdraft may be cheaper than the loss of interest

I appreciate that you see an overdraft as the answer to flaws in your planning, but surely retaining some funds in easy access accounts makes more sense, if you anticipate potentially needing access?  There's not a massive difference between best easy access rates and fixes....

vacheron

Barclays has been one of my banks for at least the last 15 years and they certainly seem to do reviews of historical / increasing debt exposure far more regularly than others.

As part of my mortgage I have an arranged overdraft which adapts dynamically based on their percievied equity in my home and is currently in the six figure region and which I can draw on at any time with interest charged at my current mortgage rate and calculate daily.

Clearly this is a useful parachute to have available at a moments notice, but at least three times they have identified the risk and written to me that they are planning to reduce it by anything between 20 and 70%

In each case I state that I am using it and that removing it they could potentially be placing me into hardship. This has resulted in them asking a couple of mundane questions (no doubt recorded so they could use it should I claim that they were lending irresponsibly), and then they agree to leave it be for another few years or so at which point we repeat the process again!   

jimjames

eskbanker said:

Robintones said:

at the moment I am keeping all my funds in fixed bonds or high-interest accounts where moving cash incurs a penalty, so the short-term cost of an overdraft may be cheaper than the loss of interest

 There's not a massive difference between best easy access rates and fixes....

Whereas there is a big difference between easy access rates and overdraft rates. Barclays have done a favour by stopping OP paying 40% in fees while receiving 5% interest

Robintones

eskbanker said:

Robintones said:
over the last few years, interest rates have been low so honestly where you kept cash was irrelevant. Now, with good rates to be achieved, managing money is important. As most of these accounts do not pay out in the month you move money, then cash management is more important. This means having the headroom of an overdraft may well be useful, obviously balancing the cost v loss of interest.

I don't really understand the bolded logic - why does the scheduling of interest payment affect capital movement?

Robintones said:

at the moment I am keeping all my funds in fixed bonds or high-interest accounts where moving cash incurs a penalty, so the short-term cost of an overdraft may be cheaper than the loss of interest

I appreciate that you see an overdraft as the answer to flaws in your planning, but surely retaining some funds in easy access accounts makes more sense, if you anticipate potentially needing access?  There's not a massive difference between best easy access rates and fixes....

and currently, I have overdrafts which I can use. Why should I have them taken away for the convenience of Barclays?

Robintones

vacheron said:

Barclays has been one of my banks for at least the last 15 years and they certainly seem to do reviews of historical / increasing debt exposure far more regularly than others.

As part of my mortgage I have an arranged overdraft which adapts dynamically based on their percievied equity in my home and is currently in the six figure region and which I can draw on at any time with interest charged at my current mortgage rate and calculate daily.

Clearly this is a useful parachute to have available at a moments notice, but at least three times they have identified the risk and written to me that they are planning to reduce it by anything between 20 and 70%

In each case I state that I am using it and that removing it they could potentially be placing me into hardship. This has resulted in them asking a couple of mundane questions (no doubt recorded so they could use it should I claim that they were lending irresponsibly), and then they agree to leave it be for another few years or so at which point we repeat the process again!   

Yes, I have that option with my offset. They said they were going to remove the extra facility. I pointed out we had a contract in which this was a part. At the time,pre-2009, they were trying to give away money! I also asked for and received a letter of apology for the bullying tone of their letters. So I agree Barclays has form on this. Ironically, they had just extended my overdraft and made me a premier customer. Which again makes me feel that they are dysfunctional.

Robintones

jimjames said:

eskbanker said:

Robintones said:

at the moment I am keeping all my funds in fixed bonds or high-interest accounts where moving cash incurs a penalty, so the short-term cost of an overdraft may be cheaper than the loss of interest

 There's not a massive difference between best easy access rates and fixes....

Whereas there is a big difference between easy access rates and overdraft rates. Barclays have done a favour by stopping OP paying 40% in fees while receiving 5% interest

I agree you do have to do the maths before using an overdraft.

eskbanker

Robintones said:

and currently, I have overdrafts which I can use. Why should I have them taken away for the convenience of Barclays?

Because it's entirely their decision about whether to lend you money or not, and overdraft terms always make it clear that these are a privilege rather than a right and can be withdrawn at any time - this can happen even if they're in use, but if, by your own admission, you've had one for nearly fifty years and never used it then it's less surprising that they take the view that it's unlikely to be needed.

I do take the point that it seems inconsistent that they offer a substantial loan instead though....

When you say you have overdrafts (plural), can't you use your non-Barclays one(s) if push came to shove?

dealyboy

I suspect for the same reasons already mentioned I received a letter from Barclaycard a couple of days ago telling me that because I hadn't used the card for a while they were going to cut my credit facility from £8,000 to £1,000 in February. However if I wanted to keep the limit I should use my card; I used my card for a £1 transaction.

I've had the card forever and must have had the credit limit for 20 or 30 years, it's a nice to have just in case of emergencies.

Now if they had asked me why I hadn't used my card for a few years, they might have learnt what I was gaining from the cards I do use, e.g. points and cashback.