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Current Account Switch

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  • HillStreetBlues
    HillStreetBlues Posts: 6,092 Forumite
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    edited 26 July at 11:11PM
    Altior said:
    I'm an accountant so to me a debit balance is asset positive. Perhaps as it's terminology I have used practically every working day. Yes that extra letter is all important, but if it read 'debt', that would have been be more logical! Even better if they had just written overdrawn. 
    I have always thought a debit balance for a bank account is one that is overdrawn as it's their asset if they are writing to me

    My reasoning is that I think of debit is what is due or owed. I read that letter is it the bank was due or owed anything, but that's just my reading of it.
    Let's Be Careful Out There
  • eskbanker
    eskbanker Posts: 37,211 Forumite
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    I accept that technical accounting terminology may be different but in common parlance a current account being 'in credit' would signify a positive balance and therefore a debit balance would mean overdrawn - given the context of a current account switch, it would be pretty odd if the ceding bank was instructing switchers to clear down a positive balance while remaining silent about how to deal with an overdraft!
  • wmb194
    wmb194 Posts: 4,930 Forumite
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    Altior said:
    I'm an accountant so to me a debit balance is asset positive. Perhaps as it's terminology I have used practically every working day. Yes that extra letter is all important, but if it read 'debt', that would have been be more logical! Even better if they had just written overdrawn. 
    It's written from the bank's perspective where a credit is a liability to the customer and a debit an asset to the bank.  

    I think that's standard, they all say to settle overdrafts i.e. debit balances before a switch.
  • Altior
    Altior Posts: 1,036 Forumite
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    Yes that was my conclusion after taking the screenshot and reading the letter again. Basically as it does not discuss clearing a credit balance! I appreciate that the majority of people might not interpret it like I did, but it could be written with less ambiguity. Still seems jarring to me to couch a liability as a debit balance!
  • singhini
    singhini Posts: 861 Forumite
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    @Altior

    i think you were right in your previous post, if the bank had just written something like........ make sure your account is not overdrawn when making the switch please................ (blah blah blah)

    Much clearer IMHO
  • friolento
    friolento Posts: 2,435 Forumite
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    Altior said:
    Here's the letter


    It doesn’t say you need to withdraw your balance. It just says that if you owe Lloyds money, you need to pay it back before they can proceed with the switch.

    A debit balance is when you are overdrawn.

    A credit balance is if you are not overdrawn.

    May be Lloyds should have explained this.

    It certainly is not necessary to withdraw your credit balance before a switch.
  • friolento
    friolento Posts: 2,435 Forumite
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    edited 27 July at 9:49AM
    @Digital_Payback


     https://www.currentaccountswitch.co.uk/The Current Account Switch Service - your guarantee to a successful switch
  • Altior
    Altior Posts: 1,036 Forumite
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    friolento said:
    Altior said:
    Here's the letter


    It doesn’t say you need to withdraw your balance. It just says that if you owe Lloyds money, you need to pay it back before they can proceed with the switch.

    A debit balance is when you are overdrawn.

    A credit balance is if you are not overdrawn.

    May be Lloyds should have explained this.

    It certainly is not necessary to withdraw your credit balance before a switch.
    I know, I have covered it in the subsequent posts.

    Lloyds wrote 'if your account has a debit balance'. Not theirs. If my account has a debit balance, it means I have a positive asset. It's a very poorly written line in my view, which I assume is sent out to thousands of their customers.
  • friolento
    friolento Posts: 2,435 Forumite
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    I just leave this here (and won’t respond to claims that CHATGPT got it wrong)



  • Altior
    Altior Posts: 1,036 Forumite
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    If you had a personal balance sheet for your own finances (I do), and you have a positive balance on your current account, where would it sit?

    (mine are listed under current assets).
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