HSBC to hike overdraft fees from March

Former_MSE_Callum · 4 December 2019 at 12:17PM

All HSBC customers will see their arranged overdraft interest rates shoot up from next March, following a similar move from Nationwide earlier this year...

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'HSBC to hike overdraft fees from March'

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eskbanker · 4 December 2019 at 12:30PM

Seems a bit pointless to highlight that all banks are expected to increase rates (to comply with the new FCA rules) and then to suggest switching to one that hasn't announced their increase yet:

Fortunately, though, there are still banks out there, like First Direct and Starling, offering lower overdraft rates. If you're hit by HSBC's changes, see if you can switch to an account with a cheaper overdraft.

Or does MSE have inside info on the intentions of their pals at FD perhaps?

Edit: and sure enough, FD's identical increase is announced the next day: https://www.moneysavingexpert.com/news/2019/12/first-direct-follows-hsbc-in-hiking-overdraft-fees-from-march/

Hope nobody wasted their time following the advice from yesterday's article (which has now been updated to remove the references to FD and Starling).

Consumerist · 4 December 2019 at 1:39PM

I think this 40% overdraft charge is likely to become the new norm for the time being.

The banks are miffed at having to advertise their overdraft fees as an APR and their first response was a predictable attack on customers to show the regulator a thing or two.

born_again · 4 December 2019 at 4:40PM

eskbanker wrote: »

Seems a bit pointless to highlight that all banks are expected to increase rates (to comply with the new FCA rules) and then to suggest switching to one that hasn't announced their increase yet:Or does MSE have inside info on the intentions of their pals at FD perhaps?

Expect ALL banks to be in the same ball park.

Given FD are part of HSBC it won't be long and they will be the same %.

Lets face it they have to give 90 days notice of variation of terms. Pretty sure FD have already sent out several of these this year already.

Socajam · 4 December 2019 at 5:42PM

Well all you overdrafters now is the time to starting repaying something that was not free in the first place.
There will be some who will be caught in this trap and blame the banks, who are in the business to make a profit.
With PPI etc, it was only a matter of time before the banks decided enough is enough and we will do what is necessary to recoup that money.
The problem is all of us savers out here are the losers, because we loan the banks our money and practically receive hardly any interest.

spenderdave · 4 December 2019 at 6:54PM

Yes, 40% interest on overdrafts is one change that won't worry me in the slightest. But I would rather they gave me a bit more interest for not using that facility.

born_again · 4 December 2019 at 8:25PM

Socajam wrote: »

The problem is all of us savers out here are the losers, because we loan the banks our money and practically receive hardly any interest.

Yea..

HSBC also issued a interest rate cut on some savings acc's from 18/12

SnowTiger · 5 December 2019 at 2:50AM

Information from HSBC is confusing.

https://www.hsbc.co.uk/content/dam/hsbc/gb/pdf/HSB-RFB2438-MCP54181-Web.pdf

Suggests new overdraft interest charge will be 39.9% EAR with a new monthly maximum charge of £20.

The Monthly Maximum Charge is the maximum amount we might charge you in a month for having an unarranged overdraft

I'm guessing they'll really charge 39.9% EAR interest plus a £20 monthly fee.

gt94sss2 · 5 December 2019 at 9:00AM

The £20 is a monthly cap on the total interest charged. HSBC will not be charging a monthly fee

jon81uk · 5 December 2019 at 12:15PM

Hopefully First Direct don't change significantly.

The current charges at First Direct seem pretty fair to me, £250 interest free then 15.9% on the rest of your arranged overdraft. If you go over the arranged limit its £5 a day (with a £10 buffer).

Easy to work out and offers a good value way to borrow if you really need some extra cash one month on the arranged overdraft and clear charges if you go over the arranged limit.

gt94sss2 · 5 December 2019 at 12:19PM

jon81uk wrote: »

Hopefully First Direct don't change significantly.

The current charges at First Direct seem pretty fair to me, £250 interest free then 15.9% on the rest of your arranged overdraft. If you go over the arranged limit its £5 a day (with a £10 buffer).

Easy to work out and offers a good value way to borrow if you really need some extra cash one month on the arranged overdraft and clear charges if you go over the arranged limit.

Banks are no longer able to charge a daily fee and the rate for authorized and unauthorized overdrafts has to be the same.

So expect all banks to follow suit.

HSBC to hike overdraft fees from March

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