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If you live within your means it’s not an issue!
I know he's been banned, but I still feel the need to weigh in.
Overdrafts are pretty terrible products. They're expensive and maybe worse they're 'payable on demand' meaning if you lose your job / get sick or whatever when most credit facilities would have to allow you time to sort yourself out, they just pull them and make a bad day worse.
Really they should be treated as a back-up for small unexpected expenses, that time you need to call out a plumber and it's 2 days before pay day and it's been Christmas or whatever excuse you need to explain why you're skint, but really the banks, as usual, have taken the piss and given people ODs to the value of their salary so they're always in debt. My Wife had a £2k OD as a student Nurse, her income was less than half that, it was cheap while she was a student, but once she graduated it started to cost real, proper money and it was pretty hard to clear it.
But that's not to say Credit is bad, some people don't like it, it causes them stress, but it's pretty shitty to get all sanctimonious on people for using credit, or even using the 'wrong' credit. It's a one-sided battle between normal people and Banks who use a lot of smoke and mirrors to hide the cost of debt.
The truth though is that if everyone suddenly saw the light and "lived within their means" we'd fall into a deep dark depression not seen since the 30s.
As a former Banker and devout follower of MSE, I'd advise anyone with one of those ODs they use every month without fail to get rid ASAP, it's its in the thousands switch it for a loan, it might hurt a bit paying it off every month, but it's better than paying 40% for ever and a day.
Yup. I'm with Lloyds too. I've gone paperless but didn't read the message sent to me. I got an email saying if I didn't read the message they would put me back on paper invoices- I suppose so they can say I had been made aware of the situation.
thisisnotaspoon - agree. If having a 'second voice' is against the rules, then surely having the two voices made one is a logical correction.
No, that wouldn’t be fair.
Boo! Hiss! Shame them, shame them etc. 😀
You’re simply assuming that everyone has the capacity to live within their means.
Some people seem to be assuming that all people with overdrafts are ****less and irresponsible while others seem to thing they are all victims of circumstances. I think it's likely that neither view is correct. P-jay is right though, if everyone suddenly did start to live within their means the economy would take a hit we'd all be feeling for years.
@kimbers - it was Lloyds that did me too, although they added the PPI without me knowing so I had a lovely £4k payout 6 years ago. That went straight to paying off the last of what I owed so their downfall kind of helped me pay off what they started! I'll never have another Lloyds product again though.
Just a bump as a PSA. Feel quite strongly about awareness and impact of this.
I was fortunate enough to clear mine, but for those that aren't it's a shit situation; trapped by banks that encouraged overdrafts and now facing massive charges they never signed up for..
It all feels a bit under-reported and wrong.
with current virus situation lots of tradesmen and self employed are going to need help this month . not a good timimg .
Bear, it's been covered widely so I don't agree it's been under-reported.
As for being wrong - it's similar to uni fees in that as soon as a maximum is quoted that becomes the actual cost; that, I think, is clearly wrong but any 'investigation' will conclude....market forces and all that.
Given the covid-19 situation and gov's response to financial impact on individuals, small businesses, self-employed the implementation date could not have come at a worse time.
IF banks had any consideration and gov was competent there would be an agreement to defer the implementation date until any review/investigation was complete and covid-19 was under control so....several months into the future.