Banking and banking charges. A LOOOOONG rant.

[Polarbear]

Is anyone here in the banking industry and can explain overdraft charges?

I got a letter from my bank stating new terms and conditions which would usually get a cursory glance and the binned however something caught my eye with this. This was Nationwide.

It was overdraft charges and stated that if you use your arranged overdraft you would be liable to a yearly interest rate of 39% on the amount you are 'borrowing' Ok, a bit steep but it seems to have become pretty normal across the board looking at other banks.

Now I have a large arranged overdraft that has carried over from when I was at sea and still use it as it's easier than bothering with credit cards at times. At 39% from the off that habit will have to change.

Reading the blurb however if you go overdrawn with an unauthorised overdraft you don't incur charges. WTF?

I've looked at other banks and this is the same so I suppose it's new laws or guidelines or whatever.

So what is to stop me removing the arranged overdraft and then, if I go overdrawn I don't get charged. The only thing I can think of is that the bank just won't let you, bouncing anything that will take you overdrawn.

It seems they have lost that revenue stream and are charging conscientious bank users to make up for it.

And while I'm on a banking moan, Santander are reducing their current account interest rate to 1% in May. That's down from 3% when I opened the account. At that rate I'll hardly cover the £5 a month account fee, robbing b@stards.

Time to try and find another account.

Suggestions for a non robbing bank that will pay at least a bit of interest for instant access accounts would be well appreciated.
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[wr6133]

Overdraft thing maybe industrywide i had similar from HSBC.

[stinkwheel]

Two things:

1) If you don't go overdrawn, you won't incur any overdraft fees.

2) Why the hell are you paying for a bank account? What do they give you over an above normal banking services to justify that £5 charge?

What it comes down to is they changed the regs for "charges" for unarranged overdrafts because people could go overdrawn by a couple of pounds and immediately incur £100 in fees. They were doing this every month getting into a debt spiral. When you calculate the APR of that transaction it's huge. So the banks are making up for the loss in fees revenue by bumping the interest rate. If you go into an unauthorised overdraft, you don't get charged but the interest rate is punative.

What confuses me is why we have an unarranged overdraft thing anyway. If there is no money in my bank, I shouldn't be able to take any out.
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“Rule one: Always stick around for one more drink. That's when things happen. That's when you find out everything you want to know.”
I did the 2010 Round Britain Rally on my 350 Bullet. 89 landmarks, 3 months, 9,500 miles.

[Riejufixing]

[Polarbear]

[1198]

[JackButler]

We need to remind our banks that they don't actually have any £money.

It's OUR £money. All of it.
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I clean my guns with the tears of the snivelling, left wing scum.

[iooi]

1st off the rant should be at the FCA who told banks that they can no longer charge a daily fee for o/d (despite agreeing to this in the 1st place as it was cheaper for customers)
FCA don't know their arse from their elbow at times.

As to charges on arranged o/d. It appears that some banks are going to stop payments that take you over your limit. Thus you may incur charges from a provider rather than the bank. Others are limiting charges on unauthorised o/d .Hsbc is £20.

A overdraft is about the most expensive of borrowing money. As well as a bank can request it is immediately repaid at any time.

Best bet now if living in a O/D is to pay it off (loan will be cheaper) and get rid.

JackButler. If you live in your money, then charges are not a issue. Borrow money that is not yours. Then expect to pay for it......
You don't like banks, then stick it under the bed....


Banking in the UK is a lot cheaper than most other countries. Who charge for everything...
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Just because my bike was A DIVVY, does not mean i am......

[JackButler]

[Skudd]

We will soon be going back to cash only transactions and hiding it under the bed.
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Famous last words of Humpty Dumpty. " Stop pushing me "
Petty Anarchists look at "1984".............. The Visionary looks at "Animal Farm".

[Polarbear]

[Sister Sledge]

^^ This. I'm of the same thinking Polarbear. The population is being drowned under so many types of borrowing and leasing. The longer it goes on, the more accepting people will be when it comes to it happening.
Cash might not be king in the future but I do look forward to a bartering system.
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CCM 404 DS

[steve the grease]

[linuxyeti]

Have I missed something here? Surely this is a non event, don't want to pay, don't go everdrawn
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[MarJay]

[Polarbear]

^^^ I understand the comment but in my case it was just easier to use the arranged overdraft in my 'normal' account than to move money from one to another.

OK I'm being lazy but when you have numerous accounts with the same bank and surplus money in those accounts earning a pittance of 0.5%, I think I'm entitled to moan about the 39% charges.
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[iooi]

[steve the grease]

Never mind 39% more good news for the indebted:https://www.theguardian.com/business/2020/jan/22/lloyds-halifax-bank-of-scotland-charge-overdraft-rate-of-up-to-49-per-cent
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All the above is my personal opinion, you can see my lips move, but I'm talking out of my arse.
I've been riding, and fixing , bikes for 50 years, in that time the more I learn, the less I am absolutely sure of.....

[Polarbear]

Not quite Wonga territory but getting there.
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Triumph Trophy Launch Edition

[linuxyeti]

[GettinBetter]

[quote="Polarbear"]

[MarJay]

[MarJay]

[iooi]