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  • FIRST POST
    • MSE Guy
    • By MSE Guy 10th Dec 10, 7:59 AM
    • 1,628Posts
    • 1,255Thanks
    MSE Guy
    MSE News: Bank charges higher than pricey payday loans
    • #1
    • 10th Dec 10, 7:59 AM
    MSE News: Bank charges higher than pricey payday loans 10th Dec 10 at 7:59 AM
    This is the discussion thread for the following MSE News Story:

    "Fees for exceeding your overdraft can be higher than the most exorbitant loan costs despite a charges overhaul by banks ..."

Page 1
    • ~Brock~
    • By ~Brock~ 10th Dec 10, 8:55 AM
    • 1,600 Posts
    • 1,519 Thanks
    ~Brock~
    • #2
    • 10th Dec 10, 8:55 AM
    • #2
    • 10th Dec 10, 8:55 AM
    Earlier this week we were up for banning Payday lenders.

    So what are we trying to ban now, bank accounts?

    Why don't we just ban everything now and then we wont have to worry about anything at all and life will be perfect. Won't do much for sales of the Daily Mail though......

    <\irony>
    • MSE Martin
    • By MSE Martin 10th Dec 10, 9:02 AM
    • 8,115 Posts
    • 42,285 Thanks
    MSE Martin
    • #3
    • 10th Dec 10, 9:02 AM
    • #3
    • 10th Dec 10, 9:02 AM
    Earlier this week we were up for banning Payday lenders.

    So what are we trying to ban now, bank accounts?

    Why don't we just ban everything now and then we wont have to worry about anything at all and life will be perfect. Won't do much for sales of the Daily Mail though......

    <\irony>
    Originally posted by ~Brock~
    We're not for banning anything. We're for fair fees and charges for everything.
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.

    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.

    Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 000
    • JimmyTheWig
    • By JimmyTheWig 10th Dec 10, 9:13 AM
    • 11,848 Posts
    • 11,390 Thanks
    JimmyTheWig
    • #4
    • 10th Dec 10, 9:13 AM
    • #4
    • 10th Dec 10, 9:13 AM
    Some people are for banning Payday lenders.

    MSE aren't included in those some people.

    Neither am I.
    • ~Brock~
    • By ~Brock~ 10th Dec 10, 9:39 AM
    • 1,600 Posts
    • 1,519 Thanks
    ~Brock~
    • #5
    • 10th Dec 10, 9:39 AM
    • #5
    • 10th Dec 10, 9:39 AM
    My post was a possibly poor attempt at irony which appears to have been missed.

    I was referring to the encouragement, earlier this week, to support an MP's proposals in terms of interest rate caps, which will in itself either restrict or end the availability of the type of lending that is now being compared in favourable terms to bank overdrafts.
    • iblametheparents
    • By iblametheparents 10th Dec 10, 12:05 PM
    • 646 Posts
    • 254 Thanks
    iblametheparents
    • #6
    • 10th Dec 10, 12:05 PM
    • #6
    • 10th Dec 10, 12:05 PM
    Can I ask why Barclays was excluded?
    • blueberrypie
    • By blueberrypie 10th Dec 10, 5:39 PM
    • 2,357 Posts
    • 5,197 Thanks
    blueberrypie
    • #7
    • 10th Dec 10, 5:39 PM
    • #7
    • 10th Dec 10, 5:39 PM
    The article talks about *unauthorised* overdrafts, but compares the charges on those to charges for *authorised* borrowing from payday loan companies. That's hardly fair, meaningful or constructive.
  • MrLeeLee
    • #8
    • 10th Dec 10, 10:32 PM
    • #8
    • 10th Dec 10, 10:32 PM
    Last month a year ago I remember sitting in front of the TV and watching the absolute shocking Supreme Court decision coming out live on TV.

    At the time I felt so angry as it was so unjust and nothing has changed my mind since, It was a sickening decision.

    What's even more sickening, is that a year down the line and these banks are STILL doing it and getting away with it.

    They can re-write their t&cs with fancy jargon and change the bank charge pricing structure (I know, why don't we charge 1 a day!) as much as they want, they are disgusting, corrupt, depraved and dishonest and the government need to stand up to these guys and say enough is enough... Fat chance of that though!
  • BackOnTrack
    • #9
    • 11th Dec 10, 12:50 AM
    • #9
    • 11th Dec 10, 12:50 AM
    The article talks about *unauthorised* overdrafts, but compares the charges on those to charges for *authorised* borrowing from payday loan companies. That's hardly fair, meaningful or constructive.
    Originally posted by blueberrypie
    Isn't the point more that it can be cheaper to get a payday loan than it is to go into an unauthorised overdraft on some bank accounts?
    Last edited by BackOnTrack; 11-12-2010 at 12:52 AM.
    There's no sense crying over every mistake.
    You just keep on trying till you run out of cake.
    • blueberrypie
    • By blueberrypie 11th Dec 10, 6:04 AM
    • 2,357 Posts
    • 5,197 Thanks
    blueberrypie
    Isn't the point more that it can be cheaper to get a payday loan than it is to go into an unauthorised overdraft on some bank accounts?
    Originally posted by BackOnTrack
    You mean the point is that authorised borrowing is often cheaper than unauthorised borrowing? Why would that be a surprise?
    • gailey
    • By gailey 11th Dec 10, 2:23 PM
    • 2,303 Posts
    • 17,249 Thanks
    gailey
    Hubby has in past got payday loan think on 120pounds paid 160back only becuase santander charges for going over and bounced dd would have been 35quid a time.

    its not ideal but been a lifesaver in past.
    plus we never got in trap of doing it every month.
    pad by xmas2010 14,636.65/20,000:
    Pay off as much as I can 2011 15008.02/15,000

    new grocery challenge 200/250 feb

    KEEP CALM AND CARRY ON,Onwards and upward2013
    • antrobus
    • By antrobus 12th Dec 10, 10:52 AM
    • 16,661 Posts
    • 23,594 Thanks
    antrobus
    The article talks about *unauthorised* overdrafts, but compares the charges on those to charges for *authorised* borrowing from payday loan companies. That's hardly fair, meaningful or constructive.
    Originally posted by blueberrypie
    Not to mention the fact that it's all simply repeating a story that appeared in the Daily Mail last month, see http://www.dailymail.co.uk/money/article-1330318/The-46-450-869-bank-charge-overdrawn-Christmas.html
    • bank leper
    • By bank leper 12th Dec 10, 12:32 PM
    • 13 Posts
    • 4 Thanks
    bank leper
    Well I was glad to see a story that wasn't blasting payday loans. Having realised I was going to go over my overdraft I asked the bank for help. They refused. I ended up, going over my limit by 19 ... because they bounced a direct debit of 10 ... and charged me 25.

    The next month I then needed to pay the DD, and the charges ... and ended up spiralling into the territory of overlimit overdraft charges ... at the worst point they were charging me 195 a MONTH for being 150 over my limit...! Despite my best efforts I could not get out of this charge/go over scenerio. As such I called them and said HELP! I asked them to freeze their charges for one month which would enable me to stay under my agreed limit. They refused ... the computer said no..!!

    As such I turned to payday loans for help. For the equivalent debt I pay 75 a month .. and hey presto my debts are increasing! The real irony is that the bank contacted me and told me that I shouldn't use payday loans...!!!! I told them that if they'd assisted instead of hindering then perhaps I wouldn't have needed to.

    Now ... I'll go to a payday loan before the bank everytime. Their customer services are 100% better, there is less hassle, no patronising attitude, and best of all they say yes and charge me less.

    The banks are out to rip you off at every turn. Payday loans are the only option for people who have hit problems and are trying to recover.

    In reply to Anrtobus ... Having talked to quite a few payday lenders I checked what would happen if I did struggle to repay them ... NONE of them would charge the equivalent of 195 a month if I failed to repay and most were most a lot less condescending than the banks.

    HSBC - 195 a month for being over overdraft.
    • antrobus
    • By antrobus 12th Dec 10, 7:04 PM
    • 16,661 Posts
    • 23,594 Thanks
    antrobus
    As such I turned to payday loans for help. For the equivalent debt I pay 75 a month .. and hey presto my debts are increasing!
    Originally posted by bank leper
    Can't see why you're so pleased about the fact that your debts are increasing.

    In reply to Anrtobus ... Having talked to quite a few payday lenders I checked what would happen if I did struggle to repay them ... NONE of them would charge the equivalent of 195 a month if I failed to repay and most were most a lot less condescending than the banks.
    Originally posted by bank leper
    Very interesting, but I don't see how this quite changes the fact that the MSE article in question was (cough) 'inspired' by a previous report from the Daily Mail.
    • woodbine
    • By woodbine 12th Dec 10, 10:09 PM
    • 18,323 Posts
    • 24,707 Thanks
    woodbine
    the nasty nasty banks....my "nationalised bank" allows me 100 interest free and 1000 i.e another 900 at 19%apr,i think the most ive ever had in charges to said bank in 36 years is 1.50,the fact that said bank allows me a free 100 o/d means i have no need for payday loans at 2900%apr,but i can see that for some people they have there use and if paid back promptly the cost isnt as bad as its made out.
    • JimmyTheWig
    • By JimmyTheWig 13th Dec 10, 11:27 AM
    • 11,848 Posts
    • 11,390 Thanks
    JimmyTheWig
    You mean the point is that authorised borrowing is often cheaper than unauthorised borrowing? Why would that be a surprise?
    Originally posted by blueberrypie
    The surprise is that most people would guess that a payday loan (with their astronomical sounding APRs) would be the most expensive way to borrow.
  • Bill Badger
    Some good advice, but as someone who banks with the HSBC and has briefly gone over the agreed overdraft limit by about 90, be careful about raising your limit because they nobble you with an 'arrangement fee' when your yearly overdraft facility is 'reveiwed'.....

    My case was perhaps common to a few of you - the month is just a few days longer than the interval between your salary going into the bank! As soon as we went over the overdraft limit, we were faced with a 25 fee for each direct debit. Luckily we noticed this happening and spoke to the bank. They were good enough to raise our limit by a couple of hundred as we asked, but they didn't tell us about the review fee that would follow. We picked up a charge of 50 for going over the limit - a 25 charge for the DD plus a 25 fee. I argued this amount and they gave me 25 back, but then I had to argue again for the 25 'review fee' some three months later. They did refund this amount, but only after a lengthy but good natured argument. I did threaten to take my account elsewhere, but realised that although they may lose money, I would have to cough up all of my overdraft......

    No offence meant, but if you don't like talking to their call centre in Bombay, send a message via your online banking to register your gripe, and they will come back to you by letter with a response, a name and a direct phone number in the UK.
    • nomoneytoday
    • By nomoneytoday 15th Dec 10, 4:44 PM
    • 4,763 Posts
    • 2,881 Thanks
    nomoneytoday
    Surely if you know you will go overdrawn, then it makes sense to call your bank in advance.
    If you "don't know" then by the time the overdraft occurs then a payday loan won't change that.

    IMHO the post isn't comparing apples with apples.
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