Overdraft

Well. I've had my first UK overdraft. It was actually an unauthorized overdraft. I was really annoyed with myself for letting me slip like that. Usually I'm really good with money and we have a few hundred left over after bills and what not. I just didn't care and spent it like I had it.. But I didn't have any. The other thing I don't get is how the bank will let money go out of your account when there is none when you aren't even allowed to have an overdraft. I'm actually more mad at myself than the bank. I was very naughty this month. 

The other thing I don't get is how the bank will let money go out of your account when there is none

That's one way they make money... they will charge you a penalty fee for that.

The part I don't get is how they will let you withdraw money from the ATM when you are at zero! 

That's one way they make money... they will charge you a penalty fee for that.

Wel I know this much. It's just silly that I can't get a debit card or an actual overdraft and they happily charge me. Such is life I suppose.

when i had my first credit card in the UK- i did this several times- not exactly an overdraft per say but i'd go over my spending limit.

i called the credit card company- and was like- why did you allow the purchase even though you knew i was over my limit?  and they were like- it's up to you to know what your credit card limit is and how close you are to that- i was like- no i don't check my credit card account every day online and i don't know down to the penny where i am...

after tooing and frooing... i convinced them to increase my spending limit by a lot... problem solved.

i called the credit card company- and was like- why did you allow the purchase even though you knew i was over my limit?  and they were like- it's up to you to know what your credit card limit is and how close you are to that-

it's true, though... it IS your responsibility, and it will undoubtedly say that in the terms & conditions of your bank account or credit card.  The one that you signed to say you'd read and agreed it!      

over draft is a VICIOUS cycle...it's horrible.

It seems people who get into over draft...get paid and end up back in over draft again because of bills and other necessities.

My bank doesn't let me go into over draft unless things haven't cleared my account. I've only done it once and it's a $25 charge each time.  Thank god they (or my bank im not sure about others) don't allow it as I would probably be in horrible debt  I'm not to great with money.

over draft is a VICIOUS cycle...it's horrible.

Yeah, it definitely can be...I went through a period a few years ago where I would overdraw my account every couple of months with a $30 charge every time. Ugh.  I keep much better watch on my accounts now and never let my checking account balance go below $10 for my own peace of mind, even if I have to transfer money from savings to keep the balance at that magic number.

Just want to clarify something... i dont know what it means in the US, but in the UK, an overdraft is a good thing!  It's like a little loan that the bank give you every month.      I could not live without my overdraft!!

It's only when you exceed your agreed overdraft that it gets bad, or when you operate your account as if you have an overdraft when you don't.

I agree that overdraft, when used properly, can be a good thing to help you get through the month or cover unexpected expenses before the next pay day.  I don't think everyone gets the nice agreed-in-advance overdraft - the one without massive fees.  I think you only get the good overdraft if you have established (good) credit, just like a credit card.  To the OP - Maybe talk to your bank about getting "overdraft" protection.  THere is nothing more annoying than going £5 under and being charged £20.

I have tried two times in the past year to reduce my overdraft and neither time did they do what I requested. The first time, I was ok with because turned out I needed to dip into later that month. Then about six months ago I called the bank to transfer some money and also asked to reduce my overdraft to "X" amount. The rep put me on hold and came back and said "ok, I can do that but someone may give you a call". I said for what? I just want to reduce it. Anyway, no call and no reduction ever happened?

Keeping it there for the moment because may need it if we ever find a house to buy but when I want to get rid of it I suppose I will have to ask for a manager and find out why they won't reduce it when I ask them to?

I am usually pretty good at not going into it but its the temptation that I would to eliminate. 

i did a little letter campaign about some bank charges i got whilst on mat leave.  it took some chasing up, but i got £130 back! 

I have a question about the "good" overdraft here. Does it look bad if you use it? I ask because I worked at a bank in the US and each customer had a secret overdraft that we were never suppose to tell them about. They would still charge you the fees, but they would go ahead and pay the check up to a certain amount instead of returning it. This amount depended on what kind of customer you were and the more you used it, they would lower the limit.

I realize  that  its an agreed upon amount here, but will it affect your credit or anything if you dip into it every once and awhile? Thanks!

I think some people on here are confusing "overdrawing" their account with using their overdraft.  If your account has an authorised overdraft, it's fine to use it.  If it doesn't, and you overdraw your account, that does look bad if you continually do it, and you'll be charged fees.

I think some people on here are confusing "overdrawing" their account with using their overdraft.  If your account has an authorised overdraft, it's fine to use it.  If it doesn't, and you overdraw your account, that does look bad if you continually do it, and you'll be charged fees.

Sorry, you are right but I do think it's a bad thing. Take for instance db...his allowed overdraft is like £500+ (i'm not sure on the exact #), he finally went back to work after my visit but didn't work a full time so his check was shorter than expected. The check he got didn't even bring him out of the over draft. It's a catch 22 type thing...it's good for paying bills but it's a vicious cycle as you can't ever seem to get out of it. You get your check, you get out of it and pay bills and such and then back into it and using it.

haha sorry just rambling...but yeah the part about MY bank was over drawing...sorry for confusing the two.