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Chewing Grass

Overdraughts

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Just noticed that a number of banks have changed how they 'charge' for overdraughts.

They now have a whizz-bang system of charging 1p per day for every £7 overdrawn.

Example -£100 now equals 14.28p per day which over 1 week equals £1.

Percentages and APRs are now so old hat.

I am wondering what the driver is behind this change, is there money to be made by trivialising 'overdraught use'?

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1 minute ago, Chewing Grass said:

Just noticed that a number of banks have changed how they 'charge' for overdraughts.

They now have a whizz-bang system of charging 1p per day for every £7 overdrawn.

Example -£100 now equals 14.28p per day which over 1 week equals £1.

Percentages and APRs are now so old hat.

I am wondering what the driver is behind this change, is there money to be made by trivialising 'overdraught use'?

If your bath is overflowing you do something about it, if your tap is dripping ...i will fix when i have the time is my thinking 

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13 hours ago, lid said:

Is that when you leap over your opponent in a game of draughts and take their piece 

No, isn't that draught-dodging?

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15 hours ago, Chewing Grass said:

They now have a whizz-bang system of charging 1p per day for every £7 overdrawn.

Example -£100 now equals 14.28p per day which over 1 week equals £1.

Percentages and APRs are now so old hat.

It's because 1p per day for every £7 sounds a lot less than 68% APR.

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Tbh, borrowing £100 for a week for a £1 seems reasonable to me...

If I'm honest I'm always amazed that building societies/ banks can make a profit from serving the general public. A smallish branch must cost £100 k a year in salaries and rent etc. My building society certainly doesn't get much from me in income...

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5 minutes ago, Great Guy said:

Tbh, borrowing £100 for a week for a £1 seems reasonable to me...

If I'm honest I'm always amazed that building societies/ banks can make a profit from serving the general public. A smallish branch must cost £100 k a year in salaries and rent etc. My building society certainly doesn't get much from me in income...

None of the High Street banks turn a profit from little old ladies in branch. It's those shady deals with Sheikhs and gambling our money on overseas ventures and high-risk investments that creates the mega profits. Not many people know about it and they prefer that.

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4 minutes ago, Great Guy said:

Tbh, borrowing £100 for a week for a £1 seems reasonable to me...

If I'm honest I'm always amazed that building societies/ banks can make a profit from serving the general public. A smallish branch must cost £100 k a year in salaries and rent etc. My building society certainly doesn't get much from me in income...

I probably average £20k in my current account and can't be bothered with a separate deposit account. They'll earn at least 4% lending that out so that's £800 a year from me for an account with direct expenses of £50 tops.

I've also known two wealthy people who steadily became less so because they were lazy in two ways: they didn't work and they let the local bank manage all their money.  The commission and expense fees must have been huge.

Each, after twenty years of this, were finding that they had to keep economising because they were a lot less wealthy than they had been and didn't like it.

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12 minutes ago, Great Guy said:

Tbh, borrowing £100 for a week for a £1 seems reasonable to me...

Does paying 68% APR on your overdraft sound more reasonable?

It's all about increasing the charges whilst appearing to lower them.

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6 minutes ago, Lipid said:

Does paying 68% APR on your overdraft sound more reasonable?

It's all about increasing the charges whilst appearing to lower them.

You can always tell which is the most expensive life insurance, funeral plan, health care and similar on adverts by the time period to which they relate its cost.

If it's given as a cost per month it'll be reasonable, if it's per week it'll be pricey, if it's per day it's HOW MUCH??

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