Banking question - (a little boring)

Christo · 3 Aug 2007 at 21:35

During June I was hovering around the £-1400 - £-1800 (Authorised overdraft of £1600). I was charged a couple of times for going over my limit £30 -I accept this (this isnt a thread about getting those fees back). I was also charged £19 for interest on my overdraft again I accept this.

Now on 5th July I paid in around £3000, and have been out of my overdraft (apart from the 4 days in July.) Now this month I was charged £19 again for interest on my overdraft. I called up the bank and they said this was the case because I went over my overdraft limit. I am confused as I was charged £30 for going over my limit before - and they say that this £19 is interest - so why am I being charged such a high interest rate for 5 days? Are they in the right to do this?

(If you are still reading, well done!)

Loki · 3 Aug 2007 at 21:37

They charge a really high rate on borrowing outside the the overdraft limit. so you get a fixed penalty then a fee based on the unauthorised borrowing over your agreed limit

Christo · 3 Aug 2007 at 21:39

Loki said:
They charge a really high rate on borrowing outside the the overdraft limit. so you get a fixed penalty then a fee based on the unauthorised borrowing over your agreed limit

In understand the fixed penalty - however for 5 days £19 is unjustifyably high surely? In this case they take your lowest point in the month, and charge you interest on that lowest level the whole month - surely this is illegal?

basmic · 3 Aug 2007 at 21:41

Chrisp7 said:
In understand the fixed penalty - however for 5 days £19 is unjustifyably high surely? In this case they take your lowest point in the month, and charge you interest on that lowest level the whole month - surely this is illegal?

http://www.thisismoney.co.uk/bankcharges

http://www.moneysavingexpert.com/reclaim/bank-charges

Loki · 3 Aug 2007 at 21:43

According to my wife who works for a bank the £19.00 will be debit interest so its based purely on the negative balance. Some banks dont charge this until you go over your overdraft. So you may go over by £1.00 but they will charge it you on the whole amount your borrowing.

Maybe give them a ring and see if they will reverse it

Christo · 3 Aug 2007 at 21:45

basmic said:
http://www.thisismoney.co.uk/bankcharges

http://www.moneysavingexpert.com/reclaim/bank-charges

Already done that

My question is more about the technical side of their interest charges.

Loki said:
According to my wife who works for a bank the £19.00 will be debit interest so its based purely on the negative balance. Some banks dont charge this until you go over your overdraft. So you may go over by £1.00 but they will charge it you on the whole amount your borrowing.

Maybe give them a ring and see if they will reverse it

But £19 surely cant be interest for 5 days on an overdraft of £1800? £19 would make sense on an overdraft of £1800 for the whole month.

Cheers for the help Loki