Wednesday, 14 October 2009

Halifax Bank Charges a Potential 3,650,000 % Overdraft Interest Fee

If you haven't already guessed, I live in the UK and I have a bank current account with the Halifax Bank.

I have a £2,500 overdraft that every now and then I'll dip; probably only a few pounds. Usually it's something like I didn't plan my finances correctly and my standing order into my savings account moved £10 more than I actually had. It's easier to leave the account overdrawn by a few pounds until pay day, rather than correct the balance. With the old charges, this probably cost me 2 pence so you can see that I wasn't that bothered.

Now to the point: I received a letter from The Halifax yesterday and was surprised to see that they were no longer going to give me interest on my balance (I didn't like that), and was shocked to see that they have changed their overdraft charges. If I go overdrawn outside of my limit I will be charged £5 per day, which is fine, BUT for every day that I use me agreed overdraft facility, I will be charged £1.

Now most people with a Halifax account probably won’t even read the letter (I nearly didn't), and a lot won’t see that as a problem, and nor do I really (I can afford it), but this is a rip off and it’s the principal of the thing. Think of it like this:

If my account goes overdrawn by 1 pence (£0.01), and I leave it like that all year, I will be charged £365. That’s 3,650,000%!!! Yes! Three million, six hundred and fifty thousand percent!

Now, I know if people go overdrawn it will probably be by more than 1 pence, but still, even if you keep your account £100 overdrawn, it is still 100%. That aside, for me this is potentially going to cost me more.

I know exactly what they’re doing; they’re trying to get everyone to upgrade to their pay for current account, but I’m not budging. Actually that’s not true. I have been waiting for an excuse to move banks as the online service provided by The Halifax is quite basic. I think this is the excuse I need.

Next week I shall move my account to another bank.

Now I suppose this is the point where you all tell me I have my maths wrong :)

The Random Within

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