Planned overdrafts - use it or lose it

[RogerS]

Fior many many years I've been assigned a small planned overdraft facility. I've rarely used it but it has been there in the background....a sort of 'comfort blanket' to fall back on in times of short-term cash flow shortfall! Some years I never used it at all. Think of it more like a big Wonga but at much reduced interest rates.

Just got a letter from my bank saying that they are reducing it as I've not used it that much. This is a new game they've devised as even in the years that I never used it, never got a letter like this until now. But now the banks are under pressure to maintain adequate capital and because they need to keep enough capital that if everyone with a planned overdraft went ahead and used it at the same time that the bank could meet those obligations. So reducing an unused overdraft limit is a sensible action and I can see the rationale as to why.

But.

But from my own perspective, by reducing it I can see the writing on the wall and that it could disappear completely (yes, I know that that is always a possibility) which then removes my safety blanket. I'm not sure what the rules of this new game are but I'm going to periodically take out close to the full amount for a few days and then stick it back in.

You might like to think about doing the same if you are in the same situation.

 

[devonwoody]

Roger, mine was reduced around 5 years ago, financial crisis time, never used it myself. But I have very high credit card limits so if I did need a quick 5K I most probably would have perhaps upto 56 days to get the matter sorted anyway.

My main rant is I get less than 2% interest these days but I see credit cards want over 27% interest for cash and 19% for purchases and they borrow from the BOE for 1/2%, not a bad business to be in.

 

[ChrisR]

Banks, customer service, should not be used in the same sentence. :evil:

 

[paultnl]

Banks, customer service, should not be used in the same sentence. :evil:

You can if you include the words bad, terrible or cr*p

 

[MMUK]

Tell me about it. I've just had a letter from Lloyds saying they're putting my CC interest rate up in January from 12.9% to 29.95% :shock:

All because in June I went over limit by 63 pence for just over 24 hours! Which was their **** up anyway! :evil:

Not that it makes much difference as I pay off in full each month anyway, but it's the principal! :evil:

 

[hanser]

Blimey 30%!
I think the banks believe that joe public customers are taken in by the warm. soft adverts that now feature - not taken them long to start getting up to their old tricks.

 

[bugbear]

It's the usual thing - credit is down to a history of responsibly using credit, i.e. taking out loans and paying them back.

I'm lucky enough to have some capital, and as an indirect consequence, I have a lousy credit rating...

BugBear

 

[Harbo]

A friend's wife tried to take out a credit card and was refused as she had no credit rating - she had always used her husband's card.

Rod

 

[devonwoody]

A friend's wife tried to take out a credit card and was refused as she had no credit rating - she had always used her husband's card.

Rod

The lady ought to have gone to her bank and got a bank credit card, even a joint current account with her husband would not have caused any hiccups.

 

[RogerS]

A friend's wife tried to take out a credit card and was refused as she had no credit rating - she had always used her husband's card.

Rod

Yup we wised up to that a few years back and SWMBO has her own line of credit now. Just has to remember to periodically use the card otherwise .......well, you know what happens...see the OP!

 

[Losos]

Roger, mine was reduced around 5 years ago, financial crisis time, never used it myself. But I have very high credit card limits so if I did need a quick 5K I most probably would have perhaps upto 56 days to get the matter sorted anyway.

My main rant is I get less than 2% interest these days but I see credit cards want over 27% interest for cash and 19% for purchases and they borrow from the BOE for 1/2%, not a bad business to be in.

Never have had an overdraft facility (Planned or otherwise) and I'm slowly moving away from credit cards, especially when abroad (Where they now charge me an outrageous 'foreign transaction charge')

I'll still need the card for things like the Eurotunnel ticket and the occasional thing I may buy from APT.

And I also agree with you 100% about the pitiful rates of interest on cash these days, my plan now is to invest cash where ever and when ever I can, sometimes in longer term products and sometimes in instant access e.g. the premium bonds where at least you might win a sizeable prize (No I never have) if you then need big cash in a hurry you can get your hands on it.

I am now convinced that interest rates will not rise until at least 2015 and probably 2016 or latter and Mr. Carney has confirmed that so it will be 'egg on face' time if he has to reverse that decision.

 

[RossJarvis]

I'm not sure why, but every time I hear the words bank or banker, the phrase "Lying, Thieving, Cheating ****s" springs to mind :x .

 

[devonwoody]

That share offer the other week, royal mail, they have never disclosed who were and what amounts were given to the large investors?
No doubt those lovely people, the bankers, kept their hands in their pockets for that one? :wink:

 

[bugbear]

That share offer the other week, royal mail, they have never disclosed who were and what amounts were given to the large investors?

I hate to swat a good conspiracy, but...

http://www.channel4.com/news/royal-mail ... ince-cable

Institutional investors will receive about 67 per cent of the shares, compared to 33 per cent going to individual investors. The institutional share allocation was 20 times oversubscribed and the offer to members of the public was seven times oversubscribed.

BugBear

 

[devonwoody]

They didn't give me time to withdraw savings from building society account for that issue, I suppose they didn't want a run on those institutions?

 

[marcros]

That share offer the other week, royal mail, they have never disclosed who were and what amounts were given to the large investors?

I hate to swat a good conspiracy, but...

http://www.channel4.com/news/royal-mail ... ince-cable

Institutional investors will receive about 67 per cent of the shares, compared to 33 per cent going to individual investors. The institutional share allocation was 20 times oversubscribed and the offer to members of the public was seven times oversubscribed.

BugBear

I cant say that I am surprised that there was such over-subscription from the institutions, given the low price of the shares compared to what they were worth. Sadly, the taxpayer was sold very short on this deal.

 

[devonwoody]

Just like the old Russian share issues, those guys made a bomb.

 

[RogerS]

That share offer the other week, royal mail, they have never disclosed who were and what amounts were given to the large investors?

I hate to swat a good conspiracy, but...

http://www.channel4.com/news/royal-mail ... ince-cable

Institutional investors will receive about 67 per cent of the shares, compared to 33 per cent going to individual investors. The institutional share allocation was 20 times oversubscribed and the offer to members of the public was seven times oversubscribed.

BugBear

I cant say that I am surprised that there was such over-subscription from the institutions, given the low price of the shares compared to what they were worth. Sadly, the taxpayer was sold very short on this deal.

There seems to be conflicting stories in the financial press. On the one hand you have institutions saying that they would not bid if the price was over that stated. Then you have other banks saying the price was too low. But I'm not that fussed about the institutions buying and making a bomb....just as long as it's those investing as pension funds.

 

[hanser]

Wow, you've got that much money :?