HSBC move me to graduate account with less than a month's notice... EAR 18.8%!!

IlonaRN

Hello,

This is my first thread here asking for advice (I tend to stick to the Boots thread!), but I really need it now!

I've been in education for a while, I was doing a DPhil in Oxford, submitted my thesis in January and had my viva at the end of May this year.

I've banked with HSBC since before my DPhil, and had one of their student accounts for a very long time. I have a £2000 interest-free overdraft.

I have just received a letter from HSBC saying that from 19th July 2008 (ie less than a month from today!), my interest free overdraft will only be £1500. The interest charged on balances over this limit will be 18.8%!!

When I had to get my account changed back to a student one (when my experiments ran over), they took a copy of my student card, which says it's valid til the end of September 2008. So I imagine that they're changing all student accounts at the same time.

What is really really annoying is that I went in to my local branch of HSBC the week after passing my viva and tried to update my title to "Dr" rather than "Miss", but they said they wouldn't do that until they could see some paperwork from the university saying that I'd actually finished my degree... yet they want to change my account to a graduate one without seeing any paperwork...

What should I do? I have just paid off the last of my credit card (that I'd managed to move from HSBC when they wouldn't reduce the interest... moved to a 0% Nationwide credit card where the 0% deal finished this month), so really really don't have £500 spare from this month's paycheck!! And I certainly don't want to pay 18.8% on the £500 I can't afford to pay off!

Help, please!!

iNFLUENCE_2

First off I assume your overdraft is around the £2000 mark.

So lets say your £500 over the interest free £1500. APR is 18.8%.

Is there no more 0% credit cards you can pick up and cancel your Nationwide one, you could pay the £500 off and keep the debt on the 0% credit card and pay it off monthly. Or 0% overdraft on a bank account?

I think that if you dont pay ANY of the £500 back and stay at £2000 overdraft, in a years time the inrerest will only come to £94 (I think i've calculated that right, if I havn't I dont think I can be far off.. Now you say you cant afford anything from this months pay check which is fair enough. But how about next month and the month after that? Maybe £50 you could pay back? Or maybe £100? If you start paying it back sooner, they'll be less interest. And remember worst comes to the worst and you dont pay any of it back 18.8% it adds on only £94, which is annoying I know, but certainly not a figure thats the end of the world.

Also the obvious one is to go into your brach or call HSBC up and explain to them the problem and try and come to some workable solution.

Blacksheep1979

So you admitted to them at the end of May that you'd finished with your course and now you're complaining that they're no longer treating you like a student...

skintstudent84

Blacksheep1979 wrote: »

So you admitted to them at the end of May that you'd finished with your course and now you're complaining that they're no longer treating you like a student...

but the OP has stated that the student card is valid until Sept 08 which means he is a registered student until that point- the bank have a copy of this. Anyway, I think the question is what he can do- as suggested above try shifting it to a 0% credit card and paying it off gradually or leave it, the interest will only be on anything over £1500, which won't be a massive amount and you can start to pay it off with your next pay check gradually reducing it.

melancholly

go in with the student card and make them change it back to a student account until september......?!

Blacksheep1979

melancholly wrote: »

go in with the student card and make them change it back to a student account until september......?!

Overdraft isn't a guaranteed right with any bank...

Other option would be to open another account with another bank, most give some form of overdraft to grads.

IlonaRN

Thanks for the replies I was a bit shocked on Friday when I posted this.

I went in to HSBC yesterday and asked them to reconsider and to let me have the interest free overdraft starting at £2000, and while they said that they couldn't answer on the spot, they have promised to ring me back before the end of Tuesday with an answer.

I did say that I'd appreciate an answer soon, as I'd otherwise have to start looking for an alternative graduate account.

Yes, I've finished my thesis and had my viva. I am currently doing the minor corrections that are required, and while I officially have 3 months to do them, my examiners have requested that I complete them within four weeks.

It is perhaps worth mentioning that I'm still considered a student by the University until there is a hardbound copy of my thesis deposited in the Bodleian library, so I'm expecting that the 30 September as shows on my student card is probably a very good indication of the date that I will officially finish.

I also have a student loan from Denmark from my first degree that I'm paying back, on which there is £500 due in November, and my car insurance/MOT/tax etc are all due in January. I had budgeted with being able to meet all of these expenses AND the £500 reduction in interest-free overdraft if the overdraft reduction came in March as I'd expected. It's just that the interest free overdraft suddenly being reduced 8 months earlier than expected does come as a bit of a shock.

I'll see what they say at the beginning of the week. Hopefully they'll extend the interest-free bit back to £2000. If not, I'll be shopping around for a new graduate account, although I imagine I'll be in a difficult position since most places will require a certificate saying I've finished... which as I've explained above, I don't actually have!

melancholly

Blacksheep1979 wrote: »

Overdraft isn't a guaranteed right with any bank...

Other option would be to open another account with another bank, most give some form of overdraft to grads.

i've had to switch my Natwest account back from a graduate account to a student account 3 times now (once when i started my masters, once when i started my phd, and finally when my phd went into a 4th year). it is actually quite easy and was a lot simpler than changing to a new bank.

Blacksheep1979

But if Natwest had reduced your overdraft and were refusing to extend it again it's a viable option.

melancholly

they don't 'reduce' your overdraft, they just limit the amount that is interest free. after 3 years of a stipend being paid in, it would be suprising to have a huge overdraft that is maxed out. that would be an indication of some very poor financial planning by me!! maybe that's something for the OP to think about for the future - after 3+ years of steady income (not very high, but still more than enough to live off), with the benefits of a cheap student lifestyle, it's not usual to still really need a £2000 overdraft...

charis18uk

melancholly wrote: »

they don't 'reduce' your overdraft, they just limit the amount that is interest free. after 3 years of a stipend being paid in, it would be suprising to have a huge overdraft that is maxed out. that would be an indication of some very poor financial planning by me!! maybe that's something for the OP to think about for the future - after 3+ years of steady income (not very high, but still more than enough to live off), with the benefits of a cheap student lifestyle, it's not usual to still really need a £2000 overdraft...

Actually I would have to disagree. Having a maxed out interest free overdraft at the end of three years is excellent planning. As long as you have stoozed the amount and stuck it in an ISA for the last three years like me