Complaint-worthy? Overdraft vs. Credit Card

mpa91

Am I right to feel miffed by Barclays that I am considered ineligible for a £500 interest free overdraft with my Barclays Premier account, and yet in the same month receive from them a proactive offer to increase the credit limit on my Barclaycard from 3.5k to 5.5k? Seems nonsensical to me that I am denied a fee free borrowing option for a relatively small amount and yet they’re willing to give me the means theoretically of running up a load more debt and interest payments on a larger amount.

Worth a complaint or am I just getting  unnecessarily frustrated?

CliveOfIndia

mpa91 said:

Worth a complaint or am I just getting  unnecessarily frustrated?

The latter.

Quite apart from anything else, the current account is a completely separate product to the credit card, and will be administered by a totally separate department in the organisation.  With any financial institution, each of the products they offer will have different T&C's, different target customer bases and different eligibility criteria.

mpa91 said:

Seems nonsensical to me that I am denied a fee free borrowing option for a relatively small amount and yet they’re willing to give me the means theoretically of running up a load more debt and interest payments on a larger amount.

The credit card ought to be fee-free (unless it's one of the very few that charge an annual fee).  There's no need to pay any interest on a credit card, so long as you clear it in full every month - which is what you really ought to be aiming to do.

Remember that you can decline the offer of a limit increase.  And even if you accept it, that doesn't mean you have to go out and use it all.  You should only ever spend what you can afford to repay in full when the statement arrives.

mpa91

Thanks, appreciate the reality check and that I would be wasting my time.

Had credit cards for 15+ years and always been fortunate to be debt free and able to clear balances each month. I understand I don’t need to accept the credit limit increase and in fact don’t mind in isolation being offered it. My main frustration is that I would benefit from a £500 interest free overdraft but have been deemed ineligible (noting also this is with a Premier account and therefore a certain level of income required) whilst I as the same customer with the same bank (frustration here with banks and how many don’t view customers holistically but on a product by product basis) are happy to increase my credit limit.

Whilst I’m fortunate to be debt free, the above situation could seemingly result in someone being offered the form of borrowing that could result in them incurring more debt and interest payments than the other. With the FCA’s Consumer Duty in mind that doesn’t seem like the best outcome for the customer…

CliveOfIndia

mpa91 said:

Whilst I’m fortunate to not be debt free, the above situation could seemingly result in someone being offered the form of borrowing that could result in them incurring more debt and interest payments than the other. With the FCA’s Consumer Duty in mind that doesn’t seem like the best outcome for the customer…

I take your point - but on the flip side, the individual bears a degree of responsibility as well.  I personally have access to many tens of thousands of pounds of credit spread across numerous cards.  I always pay in full every month, and have never paid a penny in fees or interest.  But if I were to go out and max them all, I'd find myself in a whole heap of trouble.

Just because someone gives you a gun, it doesn't mean you have to go out and shoot someone.

eskbanker

mpa91 said:

Whilst I’m fortunate to not be debt free...

An interesting slant!

eschaton

You could get another credit card and get even more interest free.

At least that is guaranteed if you comply with the terms where an overdraft can be recalled. 

mpa91

eskbanker said:

mpa91 said:

Whilst I’m fortunate to not be debt free...

An interesting slant!

Oops, faux pas on my part!