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    • Davef68
    • By Davef68 9th Nov 18, 1:14 PM
    • 20Posts
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    Davef68
    Bank of Scotland Overdraft Charges changes
    • #1
    • 9th Nov 18, 1:14 PM
    Bank of Scotland Overdraft Charges changes 9th Nov 18 at 1:14 PM
    Just got notification of further changes in arranged overdraft charges from BOS (presumably apply to Lloyds and Halifax too)


    1p per 6 overdrawn up to 1250
    1p for 7 from 1250 to 2500
    1p for every 8 over 2500


    (Currently 1p per 7 for all)


    Seems strange charging more for smaller amounts. Thankfully doesn't affect us as we only use this account to service the mortgage and a few other DDs



    https://www.bankofscotland.co.uk/bankaccounts/overdraft-assessment/the-new-overdraft-fees.asp
Page 1
    • pinkdalek
    • By pinkdalek 9th Nov 18, 8:47 PM
    • 1,256 Posts
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    pinkdalek
    • #2
    • 9th Nov 18, 8:47 PM
    • #2
    • 9th Nov 18, 8:47 PM
    So is it more cost effective to be 1257 overdrawn than 1250?

    They changed their overdraft charges last year to make it "simpler" now if anything they've made it even more complicated and are trying to make more money out of those who use smaller overdrafts.
    • eskbanker
    • By eskbanker 10th Nov 18, 12:48 AM
    • 8,683 Posts
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    eskbanker
    • #3
    • 10th Nov 18, 12:48 AM
    • #3
    • 10th Nov 18, 12:48 AM
    So is it more cost effective to be 1257 overdrawn than 1250?
    Originally posted by pinkdalek
    Depends how you measure cost effectiveness but if you mean 'is it cheaper' then no, it isn't (in absolute terms) - going from 1250 to 1257 incurs an extra penny per day.

    The first 1250 is always charged at 1p per 6 even if the overdraft exceeds that, as per the examples given at the above link.
    • pinkdalek
    • By pinkdalek 11th Nov 18, 4:39 PM
    • 1,256 Posts
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    pinkdalek
    • #4
    • 11th Nov 18, 4:39 PM
    • #4
    • 11th Nov 18, 4:39 PM
    What I meant was if you were 1250 you are being charged around 2 - 2.10 per day
    If you were 1257 you would be charged 1.79 a day.

    The best solution is not to have an overdraft in the first place, easier said than done...
    • boo_star
    • By boo_star 11th Nov 18, 5:59 PM
    • 1,738 Posts
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    boo_star
    • #5
    • 11th Nov 18, 5:59 PM
    • #5
    • 11th Nov 18, 5:59 PM
    What I meant was if you were 1250 you are being charged around 2 - 2.10 per day
    If you were 1257 you would be charged 1.79 a day.

    The best solution is not to have an overdraft in the first place, easier said than done...
    Originally posted by pinkdalek
    Yes but that's not how it works.

    As eskbanker has explained when you move from one "bracket" to another you don't pay the new rate on the entire amount, only on the amount of borrowing that's in the new bracket. So someone borrowing 1257 would pay a penny more per day than someone borrowing 1250 as they'd pay the same on the first 1250 plus a penny per day on the 7 that's above it.

    There's no scenario where someone borrowing more will pay less.
    • eskbanker
    • By eskbanker 11th Nov 18, 11:57 PM
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    eskbanker
    • #6
    • 11th Nov 18, 11:57 PM
    • #6
    • 11th Nov 18, 11:57 PM
    I thought that referring to the examples at the link provided would allow people to understand, but for anyone still having difficulty getting to grips with the tiered fee structure they include the following simple explanatory graphic:
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