Barclays to charge daily for overdrafts WARNING POSSIBLE TRIGGER

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gus

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Barclays are changing the way they are going to charge for overdrafts.Instead of an APR they are going to charge a daily fee.If I am reading the article correctly it looks like charges are going to increase dramatically for some customers.

http://www.telegraph.co.uk/finance/personalfinance/consumertips/banking/10722304/Barclays-overhauls-overdraft-charges.html
« Last Edit: 13 Apr 2014 06:23PM by SunshineMeadows »

JLR2

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I'm going over for a wee read of this Gus, have the feeling though that this is about them realising the numbers getting into serious debt is increasing and seeing this as an easy way to increase their profits on the back of this misery.

JLR2

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"Barclays said the changes to its overdraft charges would leave 70pc of its overdraft customers better off or facing no difference, while 30pc were likely to pay increased charges if they used their overdraft facility regularly."

Yyyupp, had a brief read of the story and taking the bit I've copied and pasted for example, who do you reckon is going to make up the higher portion of the 30pc likely to be in overdraft?  Exactly those on the lowest incomes, on zero hour contracts and by no small measure those on welfare benefits.

Even the few comments that have been posted on the newspaper's website story echo much of what I expected to be the feeling about this latest version of sleight of hand.

gus

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"who do you reckon is going to make up the higher portion of the 30pc likely to be in overdraft?  Exactly those on the lowest incomes, on zero hour contracts and by no small measure those on welfare benefits."

Exactly.
I also possible foresee other banks following suit like the utilities companies do after one raises their charges.In our case our overdraft charges will treble to over £90pcm.We will not be able to survive I cannot feed and clothe a family of three and run a car which is a necessity and survive on the funds that will be left.We just about survive now and losing another £15pw plus the extra £16pcm council tax they now want on top of the £11pcm we currently pay will be the straw that breaks the camels back.

The more I research this the angrier I am getting Barclays can stuff their account. >angry< >devil<

« Last Edit: 29 Mar 2014 02:42PM by gus »

Sunny Clouds

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Forgive me if I'm asking a really stupid question, but why are you using an overdraft not some other sort of bank loan?  I've always thought overdrafts were an expensive way of borrowing, or maybe it's just my bank that charges a lot more for an overdraft than for an ordinary loan.
(I'm an obsessive problem-solver, so feel free to ignore any suggestions or solutions I offer, even if they sound terribly insistent.)

gus

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Forgive me if I'm asking a really stupid question, but why are you using an overdraft not some other sort of bank loan?  I've always thought overdrafts were an expensive way of borrowing, or maybe it's just my bank that charges a lot more for an overdraft than for an ordinary loan.

The overdraft has just built up over a number of years it slowly crept up.I wouldn't be able to get a loan due to poor credit.Barclays currently charge 19.3%APR for overdrafts which is lower than credit cards for people with bad credit.When items broke we had to use the overdraft to replace them since there was no help available to people on contribution based benefits.I tried to get crisis loans I was turned down every time.

Sunny Clouds

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In other words, they're using the fact you're struggling to lend you more expensively by way of an overdraft?  Sorry, I should have worked that one out.

Debt is nasty.

Some years ago, my car broke down (terminally) while I was still paying for it (secondhand so no warranty) and I needed travel costs to get to work.  I bought a cheap banger to replace it and got it fixed up.  When my credit card bill came in, it was about £1000 and I'd been used to budgetting almost to zero at the end of each month, so I looked desperately round me and headed for the pawnbrokers.

People say to me you get ripped off at the pawnbrokers and I say I'm utterly terrified of debt.  I see people in debt and I see what it does to them.  There but for the grace of God go I, as the saying goes.

I watched a television programme about debt the other day but had to stop part way through because my heart was just going out to the people involved.

(I'm an obsessive problem-solver, so feel free to ignore any suggestions or solutions I offer, even if they sound terribly insistent.)

auntieCtheM

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Yes Sunny, I feel the same.

When they cut off my benefits, before I had the appeal heard, I got into all sorts of debt.  For example I got bank charges because cheques bounced - as they told me after cutting me off and not giving me notice.  Then it spiralled after that.  I was in a terrible state.  I had never been in debt before in my life.  It was one of those times when the choice was between eating and paying bills.  The bills won every time.

devine63

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Hi Gus

please contact Stepchange (new name for a charity called the Consumer Credit Counselling Service) http://www.stepchange.org  they do not charge at all for their help. 

They will help you manage this situation and they are not at all judgemental about how you got into it or how much money you have / don't have. 

Essentially they should be able to get the bank to suspend all charges and interest on the overdraft and (using some quite reasonable govt regulations to calculate how much you can afford) to agree a regular repayment which is made via Stepchange until the overdraft amount  is paid off [and in my case that will take over ten years but the banks have accepted it].

In calculating what you can afford they first allow proper amounts for food, rent/mortgage, utility bills, insurances, etc.  and calculating how much you have left over to pay off the debt.   I would be willing to bet that what you are asked to pay will feel reasonable and will probably be less than the bank charges you currently pay!
regards, Deb


gus

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Its so easy to get into debt we had just started to think we may get our heads above the water and this happens.There is always something or somebody ready to kick you when you are down.
devine63 thanks for the link hopefully they can help. The worry has already made me ill today.Its my daughter I feel sorry for she never asks for much and bless her she just lent us some money she was given for her birthday.How low do we feel borrowing money from a child not even knowing if we can pay it back.

devine63

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Hi Gus

 >hugs<   I'm sure Stepchange can help, so please do contact them.  The relief you will feel is wonderful!
regards, Deb

Fiz

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Halifax started this a couple of years back. I'm surprised it has taken so long for another bank to follow suit. The hardest part is the sudden change, meaning people do not have time to work at ridding themselves of the overdraft so are bound by the new fees and charges. I don't have an overdraft facility on my account thankfully. I have a credit card for emergencies, which is high APR (34.9) so I need to pay it off each month. It's got 2 car tyres on it this month so I am worrying about whether I will be able to, but am blessed to have it, or I'd be still driving around with semi flat tyres.

Main recommended sources of help:
 •StepChange Debt Charity - Website: http://www.stepchange.org/  StepChange Telephone: 0800 138 1111
 •National Debtline - Website: https://www.nationaldebtline.org/EW/Pages/default.aspx  National Debtline Telephone: 0808 808 4000
 •Citizens Advice Bureau - Website: http://www.adviceguide.org.uk/ Citizens Advice or visit your local CAB centre (find nearest)
 
Others:
 •Christians Against Poverty https://www.capuk.org/

DarthVector

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The FCA have announced that they will be investigating the "complex and poor value" overdraft market this summer:

http://www.bbc.co.uk/news/business-26973751

auntieCtheM

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I'm with the (removed bank name to be careful).  I accidentally went  over-drawn last month for 4 days;  I found out from my monthly statement.  It is years since I I did this.  I got charged a piddling amount of interest, which I was expecting.  What I did not expect was the two lots of £20 extra charges on top of the interest.  Was I cross!

I hope that they look into this sort of thing.
« Last Edit: 10 Apr 2014 08:40PM by auntieCtheM »

devine63

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auntie go to branch and complain - especially if there was any good reason for your overdraft --- they will probably remove the charges

D