HSBC student account question - overdraft related

fRostiE · 17 Aug 2006 at 02:19

oh your here, good

a friend of mine has a problem.. he's 650 pounds into his overdraft after some summer spending and has just found out that the work he's been doing all summer long doesn't pay until September the 14th (when the company's pay day is)... unfortunatly said friend has written some forward dated cheques to our landlord which commence the 1st of September, the first one is for 1000 pounds... as far as my knowledge goes his overdraft is for upto 1250 pounds, leaving him 400 quid short.

my question to the good people of OcUK GD is this, what are his options?

Go to HSBC and ask for an extension on his overdraft ? say to 2000 pounds to cover the cheque... if he does what are the chances of them saying yes / how long would it take for them to make the changes?
go into the red; he believes this is possible but carrys as fee, is it per day over the agreed limit of the overdraft or a fixed one off fee ?

and if there are any other options that people think of then please post them here

hes tried asking his parents for a loan but they're not having any of it, he's being educated in the world of money'

Raymond Lin · 17 Aug 2006 at 02:22

Ask for the extention for the overdraft, it'll take them may be a couple of days to find out. If they reject it then hte cheque will probably bounce.

He better be selling some stuff on Ebay pronto !

IceBus · 17 Aug 2006 at 02:22

Per day you'll be paying as it's an unauthorised overdraft. The bank will charge him about £20 for returning the cheque unpaid and about £30 to send him a letter about it.

Best bet is to go in and explain the situation, and ask for an overdraft extension - they should be relatively helpful. Or ring up, explain the situation to the landlord and ask him to hold off on the cheque until the 14th.

triggerthat · 17 Aug 2006 at 02:25

While I am here, I've noticed on my card I keep getting these £1.50 charges. I am in my overdraft, but not much. What are the charges for? I am with Halifax, student account.

IceBus · 17 Aug 2006 at 02:29

triggerthat said:
While I am here, I've noticed on my card I keep getting these £1.50 charges. I am in my overdraft, but not much. What are the charges for? I am with Halifax, student account.

I'm with Halifax too... £1.50 charges for me are usually for currency conversion - i.e. if you buy something from a website in USD.

fRostiE · 17 Aug 2006 at 02:35

we have a fair while between now and the 1st of september, although all cheques would need to be cashed in, or bank transfers made around the 24th of August...

there is the possibility of a friend he's known for a while loaning him money to get out of the overdraft until the student loan hits mid september when he can pay it back... but this isn't looking promising - the blokes backing out slowly... my mates due a cheuqe from his gran which is supposed to cover his tuition fee's which will cover the landlord amount (the tuition fees arnt taken until the student loan is paid out) so if either of these coem about its all good

there is then the possibility of me loaning the money to bail him out of his overdraft... im abit cautious about doing this as i've only known him since september last year

decissions decissions

[edit] still after more options if they exist ! [/edit]

Pez · 17 Aug 2006 at 09:46

Go and apply for the overdraft. You will get a much better response from any UK bank if you ask for help BEFORE it is too late.

Allowing yourself to go into the red will normally put a stop on the bank lending any further money. This is because if your going into unauthorised overdraft, your not putting up a very good impression of your financial management.

Also, please pass on to your friend... A post dated cheque means nothing in the uk. The bank will pay it when it is presented, without checking the date. In the USA its actually illegal to write a postdated cheque as it is seen as fraud.

Hope thats of some help

fRostiE · 18 Aug 2006 at 17:27

Pez said:
Also, please pass on to your friend... A post dated cheque means nothing in the uk. The bank will pay it when it is presented, without checking the date. In the USA its actually illegal to write a postdated cheque as it is seen as fraud.

surely they should check the date on the cheques tho... i will pass it on but im living in the same house next year so i've had to do the same !

update on this is that the company he's worked for has brought forward his payment by request (since the work has already been recieved and is being used) but he's still 110 quid short

Burned_Alive · 18 Aug 2006 at 17:32

Ring the landlord, explain the situation, ask him to wait before cashing the cheque?

ricky1981 · 18 Aug 2006 at 17:37

Ask HSBC, they were very decent with me when I was a student provided you told them what was going on.

If he doesn't tell them then it looks much worse and they will certainly charge him more and may even refuse to honour the cheque if it takes him that far over his limit.

Wallace · 18 Aug 2006 at 17:52

Experienced an almost identical situation to the one described with HSBC.

They're policy is to give you an extension to your overdraft of £250 no questions asked for up to 3 months. It's not interest free but it is reasonable. Then they offer a £500 credit card with the student account as standard, it's 18.9% APR with no interest free period, but it'll be ideal for one balance transfer and then to pay it all off when he gets paid.

This is exactly what I did when I needed to come up with a grand for deposit etc on this place around a month ago.

Edit: You can get the extra £250 overdraft instantly over the phone, I *think* you have to go into the branch to get the CC though.

fRostiE · 18 Aug 2006 at 17:55

cheers wallace, i'll email him now to tell him to pay a visit to his local branch and get an extension on his overdraft... as long as its interest free theres no problem

thanks

Wallace · 18 Aug 2006 at 17:56

Wallace said:
It's not interest free but it is reasonable.

j00ni · 18 Aug 2006 at 18:22

Pez said:
Allowing yourself to go into the red will normally put a stop on the bank lending any further money. This is because if your going into unauthorised overdraft, your not putting up a very good impression of your financial management.

Not necessarily, especially if you can pay it off reasonably quickly - remember banks make huge amout of money from customers who go over agreed limits and get charged for it - so they want to keep said customers.

I have been over my limit on a few occasions (though one was the banks fault), and quickly paid off the debt and any charges - and they were still happy to grant me a fairly sizeable loan

Burned_Alive said:
Ring the landlord, explain the situation, ask him to wait before cashing the cheque?

Definately the best idea, most landlords are quite reasonable about this, especially as it's early into your contract, so it's not like you are trying to not pay a last month's rent and then scarper. Remember you landlord can face charges himself if a cheque bounces, so he/she is probably as unwilling to risk it as you mate is.

GoldenGlory · 18 Aug 2006 at 18:26

I'm with HSBC and have a studen account- i've found HSBC to be very stingy with overdrafts.

I had no job over easter which meant I went overdrawn to about £1400 (£1250 limit) and had £500 on my CC. Surprisingly I didn't get many charges, probably about £10 total, and another £10 for a bounced DD. I spoke to a bank guy in the past and he said I would only recieve small charges for going over the OD, but if I persisted (6+ times) there would be a £20 charge.

Anyway, I went into the bank and explained the situation, they put my OD up to £1500 for 3 weeks, and I was due to be in Spain for the last week! What's ridiculous is that I have £19000 in a savings account (albeit I can't access it without notice) and they could only offer me £250 extension!

Cheers HSBC.

Scam · 18 Aug 2006 at 18:33

Burned_Alive said:
Ring the landlord, explain the situation, ask him to wait before cashing the cheque?

I'm surprised it took this long for someone to suggest this! Landlords (especially student landlords) are probably well used to you asking them to put it off for a few days. We had the stingiest student landlords known to man, but they had no problem putting off cashing a few cheques from some of my housemates. Might be worth doing it properly though, get them to put it in writing then sign it, and get a copy yourself. Just incase they 'forget' and cash it and land him in a bit of bother with the bank

IceBus said:
I'm with Halifax too... £1.50 charges for me are usually for currency conversion - i.e. if you buy something from a website in USD.

Good god! I knew Halifax were bad -- but they charge you for buying in USD? That's terrible! :confused:

GoldenGlory said:
Cheers HSBC.

If you'd had no job for a while and hence no money coming into the account, why on earth would they want to put your overdraft up by much more than a couple of hundred. They want to see some money coming into the account (like student loan etc.). Seems fair enough to me.

j00ni · 18 Aug 2006 at 18:37

Scam said:
Might be worth doing it properly though, get them to put it in writing then sign it, and get a copy yourself. Just incase they 'forget' and cash it and land him in a bit of bother with the bank

I think that wouldn't be such a good idea. The landlord is under no obligation to hold off cashing the cheque, and so doesn't want to be legally bound and/or liable if he does forget and cash it - and so it's more likely to make him decide no to wait than anything.

Best to ask him/her, and just give a gentle reminder a day or two before

fRostiE · 18 Aug 2006 at 18:45

haha that'll teach me to read , sry wallace

well goldenglory doesnt seem to have been charge too much for going a couple of hundred overdrawn... hes getting his old job back in a pub near the house soon as hes back at uni so theres going to be some money for essentials and things, i recon he can put away at least 50% of what he earns to shouldnt take too long for things to sort out

i'll pass on the advise and experiances tho

ta

btw scam.. asking the landlord for an extension was always a last minute option just i didnt think it would be a very good start to the relationship if one of his students couldnt pay the very first part of the agreed amount... but like i say its one of his last options, if it can be sorted otherwise im sure that would be the preference

Scam · 18 Aug 2006 at 19:41

j00ni said:
Best to ask him/her, and just give a gentle reminder a day or two before

Possibly, but if he's not willing to get something in writing then you can see that he might cash it anyway which would leave the guy in the lurch. I stil think that would have been the easiest option.

fRostiE said:
well goldenglory doesnt seem to have been charge too much for going a couple of hundred overdrawn...

Just remember the guy will keep getting charged like every week as long as he's still over his overdraft limit. At least £20 or so every time.. To be honest the last thing i would have done, would have been to go over the limit without even informing the bank. Just search here for the amount of threads on bank charges piling up and up. It's a terrible situation to get into.

fRostiE said:
btw scam.. asking the landlord for an extension was always a last minute option just i didnt think it would be a very good start to the relationship if one of his students couldnt pay the very first part of the agreed amount... but like i say its one of his last options, if it can be sorted otherwise im sure that would be the preference

That's a fair point. I've only had one experience with my ex-landlords at Uni for two years. We spent the whole time being ultra-nice and sucking up to them etc.. trying to be in their good books. They put on a nice facade in return but at the end of the day screwed us over with money here and there. Next time i'm not going to bother being nice. I'll want every little thing in writing etc..

I'm not saying all landlords are like that (although i expect most big student landlords are), that was my experience and i've learnt from it.

GoldenGlory · 18 Aug 2006 at 20:56

Scam said:
If you'd had no job for a while and hence no money coming into the account, why on earth would they want to put your overdraft up by much more than a couple of hundred. They want to see some money coming into the account (like student loan etc.). Seems fair enough to me.

Yea but if I can prove I have such assets why should I be penalised for not having a job. My father always said a worthwhile bank will look after you during bad times as well as good.

Scam said:
Just remember the guy will keep getting charged like every week as long as he's still over his overdraft limit. At least £20 or so every time.. To be honest the last thing i would have done, would have been to go over the limit without even informing the bank. Just search here for the amount of threads on bank charges piling up and up. It's a terrible situation to get into.

Rubbish, that's what they bank wants you to think.

I'm more than happy to show charges of £2 or less each month in "Debit Interest" for being over my OD by about £100. Like I said, it's only if you persistently go over the limit will it trigger a £20 charge. The bank manager told me this only applies to student accounts however. Lucky us.