Cardcash, Easycash and Student Accounts will not be affected
From 6 December 2009, millions of Halifax and Bank of Scotland current account customers will move to a new, daily overdraft charging structure.
Currently Halifax full facilities current accounts, feature a monthly unarranged overdraft fee of £28.
Paid and unpaid item fees are £35 and up to three unpaid item fees can be charged per day.
The new daily overdraft structure will apply a fee of
£1 per day for approved overdrafts up to and including £2,500. Arranged overdrafts over £2,500 will cost £2 per day.
Customers who use unarranged overdrafts will be charged £5 per day.
Mike Regnier, director of current accounts for Halifax said: "Customers find the daily overdraft charging structure clear and easy to understand. We believe the introduction of this charging structure is the right thing for our current account customers."
This debate is now closed. A selection of your comments are below.
I switched my bank account to the Alliance & Leicester. Out of 18 direct debits, A&L using their so-called Premier Switching Service managed to switch four, and failed re the other fourteen. No wonder there is very low consumer switching of bank accounts.
HBOS is not the first bank to do this, although their charges appear to fly in the face of what the overdraft charges case is all about. However this policy change has encouraged me to stop using my overdraft, save my money and look into alternatives. It's slowly paying off.
Yes, indeed - the simple answer is to always stay in credit. If only all of us could be as wise, and as financially mature to be immune to offers of credit cards and overdrafts. However, life is not simple. Quite frankly I felt like crying when I read my letter from the Bank of Scotland. As I have a large overdraft, there is little chance I will be able to change to another bank. They have me by the short and curlies.
I feel a little bit sorry for the Halifax Customer Service advisors. I phoned to complain about the letter which only talked about simplicity rather than charges. The advisor clearly knew this but had to maintain the Halifax "making charges clearer" line despite the overwhelming evidence to the contrary I'll be moving my accounts before December.
Has anyone got anything better to do than complain about what Halifax are doing with their business? Just because Halifax is the first bank to do this they are getting bad press. Stay within your overdraft if you don't want to be charged, its people who have complained about the charges that has caused this to happen. Learn from your mistakes, you have made your bed so lay in it. You only have yourselves to blame.
Halifax, what a fine establishment you are! I feel so privileged to be your customer, I really do. I always look forward to your communications and this week's was definitely one of my favourites. Clearer overdraft charges? Fantastic! It's something that frequently keeps me awake at night, but I always had faith in you, my clever little bailed-out bank, that one day you would come up with a solution. And what a solution it is! I mean, as a loyal customer, why wouldn't I why wouldn't I want to give you £1 a day out of my hard-earned salary? On an arranged overdraft too, it's genius, it really is!
I joined HBOS for a current account and, due mainly to redundancy last year, have run up an AGREED overdraft of between £2,500 - £2,700; my charge for this is set to more than DOUBLE every month. This is a blow to someone who, now gainfully employed once more, is striving to reduce his debt mountain.
I have been with Halifax all my life, and have always thought Halifax to be a decent bank. I received my letter the other day and was DISGUSTED at the new overdraft fee! It's extortionate! Considering I normally go into my overdraft just before payday by £50, I normally pay less than £1 in charges, but now I could be looking at £7 in charges! I will definitely be looking to change banks.
The HBOS charges may be clear but they are extortionate. I received the notice telling me I would pay £1 per day for my authorised overdraft and whilst I would only be overdrawn on a rare occasion I will not pay these charges and having been a customer of the Halifax for at least 20 years I have now closed my account.
As a customer of HBOS I am appalled at the recent changes which they attempt to suggest are more simple for us rather than being honest and saying they are trying to fleece us yet again. Immediately I received this information I decided to change banks and have set this in motion. I have been a Bank of Scotland customer for over 40 years but no more!!!!
When I first started my overdraft I was on sick leave due to me being on crutches, this was unpaid sick leave because I was a temp then I lost my job. This all happened when I was a student so now that I have just graduated I have got an over draft of £2800 which I normally sit at £2500. These charges are going to make my attempts to pay this off unbelievably hard. I will be looking for a different bank as I get terrible service with HBOS for the last couple of years and it is the final straw.
Whilst it may be that these charges are potentially big it is important to remember that this is still a loan and is "not our money". There are three simple choices
1 Manage within the money you have
2 Accept the charges
3 Move banks. It's not worth moaning about, its our choice. Rob, Leicester
Regarding the new overdraft fees being brought in by the Halifax, I wonder if you are aware that they have also decided to stop paying interest if your account is in credit! Let's make the interest rates simple and pay us a pound a day whilst they have our money!
I am trying to get rid of my credit card at the moment and Halifax won't help me in any way - now they drop this one on me. I had to have quite a large overdraft to help me through a difficult time. There is no way I can avoid the £31 charge each month...I never have bounced payments or unauthorized overdraft charges and yet I am going to be in trouble. So unhappy - been with this bank over 15 years and they do this right before the hardest time of the year (Xmas) financially! Want to go to another bank but fear they won't have me with this overdraft.
My partner and I have been with the Halifax for 15 years. Not only do we have our current accounts with them we have a mortgage and home insurance. We both have overdraft facilities and use them regularly but never do we exceed our limits. This will now cost us up to £60 a month. We have two children so every penny counts and with Christmas upon us we will definitely feel the effect of this.
This is going to real effect me as I am not working at the moment so really rely on this and I am unable to pay this back. Thanks.
I have got an arranged overdraft of £450.00 and due to circumstances I am in it 28 days of the month so that would mean £28.00 charges. Customers are using their overdrafts more and the bank, aware of this, are using this new payment system to line their pockets. Yes I could move banks and to be totally honest, if it wasn't such a faff I would.
I work with people on the Pathways to Work programme to move them into sustainable employment. In the last week I have had an unprecedented amount of clients who have started work, call me up terrified that they will be charged £30 a month for their overdraft of £100-150. This charge is adding insult to injury with the much publicised 'bankers bonuses' returning, seemingly under the radar, while people at the other end of the income spectrum are saddled with unfair charges like this so that bank can plug the gap which it made itself through it's greed and dishonesty.
What about people like myself - a pensioner on Pension Credit benefit? My benefit and small pension go into my Halifax account weekly - and my direct debits are collected from the account around the beginning of each month. With my low income it is easy to go slightly into my agreed £100 overdraft. I have done it only a few times but I can't afford to be penalised. I want to change bank now but I have all my payments made into them and DDs out - which I think will not be easy to rearrange.
I am going to shop around for a new bank. I have been with The Halifax for 20 years but can't support this. It is absolutely ridiculous to potentially charge someone £31 a month for for example going a penny into overdraft. Yes, this is easy to understand, but big deal...that's not going to help the poor sod who faces these ridiculous charges.
I moved to Halifax bank from alliance and Leicester because I thought their charges were bad. This new charge is ROBBING THE POOR TO PAY THE RICH. I use mine at the end of the month usually and pay just a small amount now it will be making it very expensive, I only use it for normal living expenses and not living the high life. I don't know how I will get though Christmas now.
It appears obvious to me that this is a clear attempt by the Halifax to increase revenue rather than make it simpler for the customer. Turning against existing customers in this fashion would be dubbed a stealth tax if the Government had introduced it. As a customer of 15 years with the Halifax I am in the process of cancelling the 3 accounts I hold with the bank.
I think your reporting on the HBOS current account changes very biased, you have only covered the overdraft aspect of the account changes. What you have not published or noted for discussion is the change from paltry credit interest payments to a flat £5 per month 'Reward' for customers who manage their finances - like many thousands of banking customers do.
I have banked with HBOS for many years and have an arranged overdraft that I have NEVER used. My husband and I have never been high salary earners and have recently retired and are therefore now on a reduced income. The £5 per month we will now get is substantially better than the £1-ish interest we were previously getting. That equates to a pub lunch for one of us!
HBOS have a first class online and telephone banking service so there is no excuse for people to go into minimal overdrafts if they track their spending properly. For those people who live permanently on overdraft it is fitting that they should be expected to pay. If people live within their means instead of relying on credit (often funded by customers like myself) then they would not be charged fees. I believe that credit is far too easy to get these days - hence the financial mess and huge unsecured lending that many thousands of people now find themselves in.
Other financial institutions do recoup the costs through missed payment fees and letters for exceeding overdrafts etc. so stop hammering HBOS!
Really BBC I expect fairer and unbiased reporting from a public corporation.
I don't agree with the argument that it is my fault for not being able to manage my funds properly, as the Bank cannot preach to any body with the way they have managed their funds. I the tax payer have bailed this bank out, I had no consultation I just had to do this. Surely they should not be hitting me when I fail to pay a £6 direct debit and have to pay £35. It has had a desperate knock on affect for me and my family over the years and many of my financial problems have been because of these charges.
Sarah, Cromarty Ross-shire
I phoned the bank to seek clarification of the charges. The person I spoke to confirmed that I would be paying around £25 per month per account in charges. Almost immediately I was offered a personal loan to cover the amounts of my overdraft facilities. I was also offered a credit card that I could use to pay for my day to day expenses whilst paying off the overdrafts. I reluctantly decided to apply for the personal loan, which was subsequently accepted. I feel the bank have used this as a way to generate more income. I have simply robbed Peter to pay Paul!
Victoria, Milton Keynes
I used to be a member of staff with this institution and experience tells me this will be pushed within branches as an opportunity to sell credit cards and personal loans to consumers regardless of whether they are suitable or can afford them.
As a self-employed person with an irregular income a small overdraft is a necessity. I could not believe the HBOS letter, and how these charges are being presented as simplifying the costs for the benefit of the customer. My account will be closed before 6th Dec.
The Halifax decision is appalling but Nationwide is almost as bad. On current accounts they are now paying NO interest on credit balances of ANY size and charging 18.9% EAR on BOTH authorised and unauthorised overdrafts. Not a bad profit margin!
We have been with Halifax 35 years and have 3 current accounts, savings etc. The changes constitute usury. It is cheaper to get a loan from a loan shark! We will be switching our accounts to other providers. There is no reward for loyalty.
The biggest irritation about this - aside from the callous application of unreasonable charges - is that we are now going to have to move all of our banking elsewhere. It's going to be hard work and probably painful - but it's really a matter of principle. HBOS believes that on balance they will win out - financially - and don't care about the amount of angst and anger they cause doing so.
The regular features on topics such as this are getting so boring. If you don't like the charges at least you've been given the notice you need to change to a bank with different charges. Or you could just not spend more money than you have. Please could Moneybox concentrate on more deserving subjects.
I can't believe these overdraft charges, I just cannot believe the Halifax can get away with this when so many people are struggling at the moment - I've been with the Halifax for well over 20 years and so have my grown-up children but no more, I've had enough of their excessive charges over the years so we're all going to move our accounts as soon as possible so COME ON EVERYONE, VOTE WITH YOUR FEET AND GO ELSEWHERE!!!
Sinple answer to this is to live within your means and don't go overdrawn. If you are not good with money have a basic bank account where you can't go overdrawn.
Anthony Telling, Dudley
Do 'we' the public not own 40% of Halifax? Did we not save them from certain death last year? So for saving you I am expected to pay you for the privilage? Goodbye Halifax, after 33 years with you I am so incensed by your thoughtless actions on penalising the less well off with higher charges, I am off to the Nationwide.
James, Milton Keynes