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  • FIRST POST
    • MSE Callum
    • By MSE Callum 4th Dec 19, 11:17 AM
    • 622Posts
    • 197Thanks
    MSE Callum
    HSBC to hike overdraft fees from March
    • #1
    • 4th Dec 19, 11:17 AM
    HSBC to hike overdraft fees from March 4th Dec 19 at 11:17 AM
    All HSBC customers will see their arranged overdraft interest rates shoot up from next March, following a similar move from Nationwide earlier this year...
    Read the full story:
    'HSBC to hike overdraft fees from March'

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Page 4
    • Consumerist
    • By Consumerist 11th Dec 19, 12:49 PM
    • 5,282 Posts
    • 2,639 Thanks
    Consumerist
    . . . Interest is capped for unarranged oberdrafts but not for arranged overdrafts. So having an arranged overdraft is now more expensive than having an unarranged??! What is then the motivation for arranging an overdraft?
    . . .
    Originally posted by hounslowfish
    Any payment requested whilst in (or taking you into) unarranged overdraft will be subject to a paid/unpaid transaction fee (i.e. whether it is paid or not - at the banks' discretion). The going rate at the moment is around £25 a pop.
    Last edited by Consumerist; 11-12-2019 at 1:00 PM.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • meer53
    • By meer53 11th Dec 19, 3:21 PM
    • 9,577 Posts
    • 14,017 Thanks
    meer53
    Thereís one aspect of this change that baffles me.

    Interest is capped for unarranged oberdrafts but not for arranged overdrafts. So having an arranged overdraft is now more expensive than having an unarranged??! What is then the motivation for arranging an overdraft?

    As someone with an arranged overdraft of £750 which I do sometimes use, would I save money by asking the bank to remove it so I benefit from the unarranged cap?
    Originally posted by hounslowfish
    Interest isn't capped, the fees for using an unarranged overdraft are capped at £20 per month. You will still be charged interest at 39.9% on either arranged or unarranged overdrafts. Racking up an unarranged overdraft of £750 would probably see you without a bank account sooner rather than later.
    • Consumerist
    • By Consumerist 11th Dec 19, 3:59 PM
    • 5,282 Posts
    • 2,639 Thanks
    Consumerist
    Interest isn't capped, the fees for using an unarranged overdraft are capped at £20 per month. . .
    Originally posted by meer53
    The FEES for using an unarranged overdraft are not capped. Paid- and unpaid-transaction fees will be charged on top of interest. Only interest on the unauthorised overdraft is capped at £20 pm.

    The only limit on the fees charged is the Monthly Maximum Charge (MMC). The banks must publish this MMC.
    Last edited by Consumerist; 11-12-2019 at 4:02 PM.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • hounslowfish
    • By hounslowfish 11th Dec 19, 5:31 PM
    • 46 Posts
    • 19 Thanks
    hounslowfish
    This really is a huge cultural change. Ever since I was a student banks have said here’s a cheap overdraft, please use it! I stopped using credit cards entirely because the overdraft sufficed for me to absorb unexpected short term overspending. I’m sad if this will push me back to credit cards.
    • jeepjunkie
    • By jeepjunkie 12th Dec 19, 7:44 AM
    • 1,688 Posts
    • 1,486 Thanks
    jeepjunkie
    This really is a huge cultural change. Ever since I was a student banks have said hereís a cheap overdraft, please use it! I stopped using credit cards entirely because the overdraft sufficed for me to absorb unexpected short term overspending. Iím sad if this will push me back to credit cards.
    Originally posted by hounslowfish
    Clearly you need to learn how to budget, live within you means and save for unexpected bills and wants. Credit cards and overdrafts should have no place in daily spends.
    • Consumerist
    • By Consumerist 12th Dec 19, 1:08 PM
    • 5,282 Posts
    • 2,639 Thanks
    Consumerist
    . . . Credit cards and overdrafts should have no place in daily spends.
    Originally posted by jeepjunkie
    I disagree.

    Payments made from a current account in unauthorised overdraft will each attract a paid- or unpaid-transaction fee. If those payments are made from a credit card then they are not payments from a current account and will not attract the fees.

    Used correctly and with discipline, a credit card can save you a lot of current-account fees and help smooth out the bumps in your finances.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • meer53
    • By meer53 12th Dec 19, 10:30 PM
    • 9,577 Posts
    • 14,017 Thanks
    meer53
    The FEES for using an unarranged overdraft are not capped. Paid- and unpaid-transaction fees will be charged on top of interest. Only interest on the unauthorised overdraft is capped at £20 pm.

    The only limit on the fees charged is the Monthly Maximum Charge (MMC). The banks must publish this MMC.
    Originally posted by Consumerist
    PLEASE READ

    "In light of this, HSBC is scrapping its £5 daily usage fee for unarranged overdrafts and reducing the maximum monthly cost for using one to £20"

    The above relates to UNARRANGED overdrafts.

    If you have an ARRANGED overdraft the interest rate for using that will be 39.9% (after the £25 interest free amount) This interest IS NOT CAPPED.
    • jeepjunkie
    • By jeepjunkie 16th Dec 19, 9:18 AM
    • 1,688 Posts
    • 1,486 Thanks
    jeepjunkie
    I disagree.

    Payments made from a current account in unauthorised overdraft will each attract a paid- or unpaid-transaction fee. If those payments are made from a credit card then they are not payments from a current account and will not attract the fees.

    Used correctly and with discipline, a credit card can save you a lot of current-account fees and help smooth out the bumps in your finances.
    Originally posted by Consumerist
    There are no fees being in credit in a current account and a buffer of cash for bills will smooth out bumps.

    I find it truly staggering how the finance industry have brainwashed significant amounts of people into becoming dependent on credit cards for daily spends who are now paying for pointless credit scores! God help them in retirement.
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