Customers Facing Historic High Overdraft Fees Of Nearly 20% Despite Record Low Base Rate

[interestrateripoff]

http://www.dailymail.co.uk/news/article-2138692/Customers-facing-historic-high-overdraft-fees-nearly-20-despite-record-low-base-rate.html

Banks are charging customers the highest overdraft rates since records began.

The average authorised overdraft rate is 19.52 per cent – nearly 40 times the base rate which has been kept at a historic low of 0.5 per cent for three years. It means an overdraft of £1,000 for a year would cost £195 before a penny of the debt was paid off.

So the Wail goes for interest only overdrafts....

Don't use your overdraft unless it is an emergency, too many people for too long have lived in them.

I know of people who see the overdraft as "their" money which needs to be spent.

[Wurzel Of Highbridge]

The thought of going into my overdraft sends a chill down my spine. It would be a dark dark day for that to happen.

[Guest eight]

http://www.dailymail.co.uk/news/article-2138692/Customers-facing-historic-high-overdraft-fees-nearly-20-despite-record-low-base-rate.html

So the Wail goes for interest only overdrafts....

Don't use your overdraft unless it is an emergency, too many people for too long have lived in them.

I know of people who see the overdraft as "their" money which needs to be spent.

Must be those astronomical "payday" loans I keep hearing about.

[jaspers]

Whenever I log into my NatWest account online, for my current account in the first column it says 'amount available', which includes a £5000 unasked for overdraft facility.When I first logged on I thought I was considerably richer than I was until 0.5 sec later when I realised what they'd done!

[Sour Mash]

http://www.dailymail.co.uk/news/article-2138692/Customers-facing-historic-high-overdraft-fees-nearly-20-despite-record-low-base-rate.html

So the Wail goes for interest only overdrafts....

Don't use your overdraft unless it is an emergency, too many people for too long have lived in them.

I know of people who see the overdraft as "their" money which needs to be spent.

It seems to be an increasingly common trait amongst the ever more fiscally illiterate public to see accessible credit (overdraft facility, credit card limits, credit deals) as being equivalent to actually having a positive balance in your bank account.

Then again, they may have the last laugh if the whole thing really goes south.

[Monkey]

i live in my overdraft, its only £100 but what i do is pay it off every month, i take my money out of my current account when i'm paid, minus paying off over draft and put it in to a savings account, which at 2.**% is earning me considerably more interest than leaving it in my current account. and as the overdraft is normally for less than 15 days the interest incurred is considerably less than what i will earn on the money being in my savings account.

my overdraft cost me £0.19p for the fisical year 2011/2012 in interest etc.

[Brave New World]

Seeing this with trying to take out a personal loan for a car at the moment. Don’t have any credit cards and £125 of outgoings (away from rent) on easily above average salary but getting quoted 14-19% over 6 years!

[mfs1959]

Since the banks are restricted with the charges they can now levy for unauthorised and excess use of an overdraft facility then they have to make their money in a more obvious way.

[mfs1959]

Seeing this with trying to take out a personal loan for a car at the moment. Don’t have any credit cards and £125 of outgoings (away from rent) on easily above average salary but getting quoted 14-19% over 6 years!

If they cannot make money by selling PPI then they have to be above board and charge higher interest rates.

[South Lorne]

http://www.dailymail.co.uk/news/article-2138692/Customers-facing-historic-high-overdraft-fees-nearly-20-despite-record-low-base-rate.html

So the Wail goes for interest only overdrafts....

Don't use your overdraft unless it is an emergency, too many people for too long have lived in them.

I know of people who see the overdraft as "their" money which needs to be spent.

...well somebody has to pay for the low mortgage rates and bad debts ...and the High Street Banks' Directors' bonuses....can't come out of thin air can it...?....oh and of course they keep the rates for those savers low ....just to ensure next years bonus is on track ...bottom line losses or not....

[alexw]

If they cannot make money by selling PPI then they have to be above board and charge higher interest rates.

Or perhaps, just perhaps they can lower bankster pay levels and the degree to which they are looting our society?

Or is that an insane suggestion because they are supremely skilled and intelligent, veritable Übermensch just as the nazi's talked about, and i'm just posting the 'politics of envy'™?

[Englebert]

Financially literate or not, the bottom line is that the Financial Services - the banks - in this country have got the economy by the BALLS. There will never be a true recovery unless there is a debt write off. Don't ask me how this can be achieved fairly - I don't know if it is possible. What I do know is that less money in people's back pockets means absolute stagnation in most aspects of the economy and consequently, people's lives. The number of people I know with debt management plans is staggering. These are people without houses...they are not rich by any means. The best thing they did was to say 'screw you' to the financial slavery. They are much happier nowadays. So I think the banks can put up overdraft rates as much as they want because, ultimately, sooner or later, their 'customer' will just walk away.

[OnlyMe]

Financially literate or not, the bottom line is that the Financial Services - the banks - in this country have got the economy by the BALLS. There will never be a true recovery unless there is a debt write off. Don't ask me how this can be achieved fairly - I don't know if it is possible. What I do know is that less money in people's back pockets means absolute stagnation in most aspects of the economy and consequently, people's lives. The number of people I know with debt management plans is staggering. These are people without houses...they are not rich by any means. The best thing they did was to say 'screw you' to the financial slavery. They are much happier nowadays. So I think the banks can put up overdraft rates as much as they want because, ultimately, sooner or later, their 'customer' will just walk away.

I see this happening too, how can there be any stigma in telling the banks to screw themselves after watching the way the banking scum behave when given hundreds of billions of taxper's money directly and indirectly through QE and inflation - if yo don;t have savings and anything to lose taking them to the cleaners time and again has got to be the way to do. The central baks talk about moral hazard, they are a fountain of it and are utterly clueless about the damage they have doen to this country and the population as a whole.

[Venger]

Financially literate or not, the bottom line is that the Financial Services - the banks - in this country have got the economy by the BALLS. There will never be a true recovery unless there is a debt write off. Don't ask me how this can be achieved fairly - I don't know if it is possible. What I do know is that less money in people's back pockets means absolute stagnation in most aspects of the economy and consequently, people's lives. The number of people I know with debt management plans is staggering. These are people without houses...they are not rich by any means. The best thing they did was to say 'screw you' to the financial slavery. They are much happier nowadays. So I think the banks can put up overdraft rates as much as they want because, ultimately, sooner or later, their 'customer' will just walk away.

Actually it means deflation. And there can't be write offs, when people are still trying to buy poncey status cars and considering 6 year loans.

Not when I've denied myself that, totally flush, and am positioned to buy some nice status car when more people are forced to sell them cheap to raise money.

The bad money has to make way for the good money. Not more credit for those in the hole, and keeping them in houses they shouldn't be in, prices having been prevented from crashing, whilst good/smart money is in rented.

[zebbedee]

My overdraft rate is 0%, O' wait a minute I don't spend money I don't have and will have to pay back more on than I spent thus reducing future spending capacity. Hows about this people count up what they earn and all their necessarily expenditure, housing, heating, food and clothing, see whats left and only spend that on crap. If they are in debt they can use whats left to pay off the debt and then have the interest payments extra each month. A novel idea I know but thought I'd put it out there.

[bmf]

My overdraft rate is 0%, O' wait a minute I don't spend money I don't have and will have to pay back more on than I spent thus reducing future spending capacity. Hows about this people count up what they earn and all their necessarily expenditure, housing, heating, food and clothing, see whats left and only spend that on crap. If they are in debt they can use whats left to pay off the debt and then have the interest payments extra each month. A novel idea I know but thought I'd put it out there.

You and me are the mugs.

[Englebert]

My overdraft rate is 0%, O' wait a minute I don't spend money I don't have and will have to pay back more on than I spent thus reducing future spending capacity. Hows about this people count up what they earn and all their necessarily expenditure, hoeusing, heating, food and clothing, see whats left and only spend that on crap. If they are in debt they can use whats left to pay off the debt and then have the interest payments extra each month. A novel idea I know but thought I'd put it out there.

I agree, by and large, with your sentiments. In the real world, however, what you have said is completely irrelevant to a LOT of people. It means zilch to them that you have 0% overdraft (well done btw.) The system for millions now has swung too far now for them. They will and are, walking away from their debts. If they didnt do this, they would probably kill themselves. AND ALL FOR MONEY! I don't blame these people from walking away. In fact I would actively encourage it. And as I mentioned previously, the people I know who are increasingly turning to debt management plans are NOT people who own houses and have 3 foreign holidays a year - they are renters with young families.

[Englebert]

As you can probably read, I really have ZERO sympathies or concerns for the predicament of the banking system or indeed any other body which uses usury as a means of enslavement.

[Venger]

I agree, by and large, with your sentiments. In the real world, however, what you have said is completely irrelevant to a LOT of people. It means zilch to them that you have 0% overdraft (well done btw.) The system for millions now has swung too far now for them. They will and are, walking away from their debts. If they didnt do this, they would probably kill themselves. AND ALL FOR MONEY! I don't blame these people from walking away. In fact I would actively encourage it. And as I mentioned previously, the people I know who are increasingly turning to debt management plans are NOT people who own houses and have 3 foreign holidays a year - they are renters with young families.

So how did they get in to debt requiring Debt-Management-Plans?

I already know the answer. Living it too large and making stupid financial decisions. 'Because you're worth it' when you're not. Can't be seen driving an old car ect, like BNW below, where he could surely buy himself a decent cheap £1500-£2000 car without requiring the loan he's seeking.

They're not walking away though are they if they are on DMPs. It's just even less competition for the renters who've saved in the market when it comes to buying homes, and thus greater house price falls, as they're even less likely to be able to secure a mortgage. However they've got into debt over the years, it's even better for those who haven't. And the interest rates are high because of people defaulting on debt.

Seeing this with trying to take out a personal loan for a car at the moment. Don't have any credit cards and £125 of outgoings (away from rent) on easily above average salary but getting quoted 14-19% over 6 years!

[zebbedee]

I agree, by and large, with your sentiments. In the real world, however, what you have said is completely irrelevant to a LOT of people. It means zilch to them that you have 0% overdraft (well done btw.) The system for millions now has swung too far now for them. They will and are, walking away from their debts. If they didnt do this, they would probably kill themselves. AND ALL FOR MONEY! I don't blame these people from walking away. In fact I would actively encourage it. And as I mentioned previously, the people I know who are increasingly turning to debt management plans are NOT people who own houses and have 3 foreign holidays a year - they are renters with young families.

This is true but it shouldn't be that way, walking away from your debts should mean never again being able to access credit-market forces forcing you to live within your means. They may walk away from the debts but someone else has to pick up the tab, someone who didn't spend beyond their means, as the post above you put it I and him are the mugs.

Edit, I'm all for backto the old days where debt was seen as bad, something to be ashamed of and being made bankrupt carried social stigma.

Edited May 3, 2012 by zebbedee

[24gray24]

Edit, I'm all for backto the old days where debt was seen as bad, something to be ashamed of and being made bankrupt carried social stigma.

Every effort will be made to stigmatise the bankrupt.

And protect the bankers.

[zebbedee]

Every effort will be made to stigmatise the bankrupt.

And protect the bankers.

******, they want the bankrupt to be able to start borrowing again in a year or two and not feel bad about it so that the bankers can continue to be protected. The only ones who are suffering in the long run are the financially literate in this new paradigm-the question is what happens when I and others like me say 'fluck it, show me the debt and spend spend spend', who'll pick up the tab then.

[iamdamosuzuki]

Again the real cause of this is Investment banking. I saw first hand, years ago, how Retail Managers had to sit and be told their profits were totally unacceptable because the IB's were acting as the Global bank's powerhouses running up enormous imaginary profits.

Oh and anecdotally this is going to get a lot worse. IN ALL THE MAJOR BANKS NOW, the investment bankers are taking over the other divisions and wondering why they aren't making the kind of silly money they need to keep the wife quiet.

So it's all added value, tcs ******** and desparate fleecing of customer's pockets.

They simply CANNOT understand why everyone won't just give them money without whining.

[Englebert]

This is true but it shouldn't be that way, walking away from your debts should mean never again being able to access credit-market forces forcing you to live within your means. They may walk away from the debts but someone else has to pick up the tab, someone who didn't spend beyond their means, as the post above you put it I and him are the mugs.

Edit, I'm all for backto the old days where debt was seen as bad, something to be ashamed of and being made bankrupt carried social stigma.

One day, I can guarantee, Zebbedee, you will have financial or health problems. It may be a long way away (I hope so I really do) but it is inevitable that your life will take a course away from your chosen path. When the unexpected does happen, you will be dependent on others. By that time, it will be too late for you to understand the way Society needs other people to 'take up the slack'...even GOOD people with debt.

[zebbedee]

One day, I can guarantee, Zebbedee, you will have financial or health problems. It may be a long way away (I hope so I really do) but it is inevitable that your life will take a course away from your chosen path. When the unexpected does happen, you will be dependent on others. By that time, it will be too late for you to understand the way Society needs other people to 'take up the slack'...even GOOD people with debt.

If I were to have financial problems it wouldn't be because I had spent the money I had earned on to many holidays or flat screen tvs though would it. If someone borrows more than they can afford they should suffer consequences for that. And where did I mention anything about health issues you muppet, what do you think the NHS was meant to, and should be, if not a safety net.

'Rather go to bed supperless than rise in debt.'

Benjamin Franklin

'Be assured that it gives much more pain to the mind to be in debt, than to do without any article whatever which we may seem to want.'

Thomas Jefferson

'Live within your means, never be in debt, and by husbanding your money you can always lay it out well. But when you get in debt you become a slave. Therefore I say to you never involve yourself in debt, and become no man's surety. If your friend is in distress, aid him if you have the means to spare. If he fails to be able to return it, it is only so much lost.'

Andrew Jackson

Edited May 4, 2012 by zebbedee