Saturday 24 October 2009

Banks and Simpler Overdrafts

I'm not going to mention the name of the bank in case they're watching... well not just yet anyway, but here's a story about blatant profiteering hiding behind simplifications to a current account. It is a scandal and needs to be stamped on from day 1.

OK, this bank has written to all its current account customers explaining new 'simpler' arrangements for their current account.

  • They no longer offer interest on the account (it was a paltry 0.1% anyway)
  • They will no longer be charging interest on overdrafts..... Too good to be true, yes, instead they will be charging a flat rate of £1 per day for every day you are overdrawn (up to £1000 for an arranged overdraft)
At first sight it may seem reasonable, losing interest and only being charged £1 per day for an overdraft. But look at it more closely.

Assume for example you go £30 overdrawn, and it's a week before payday, so you have say 6 days when you're overdrawn by £30. Following it so far?

With the new 'simpler' system, you'll be charged £6. Now using simple maths, this is 20% of the amount you were overdrawn... for just 6 days overdrawn. Now this is interest of 20%, for 6 days which gives you an APR (annual percentage rate) of around 4000% !!

Now if say you overdraw by around £200, for 4 days, you'll be charged £4, which is around 2% or an annual rate of more than 200%. Still very bad.

Previously, you'd be charged interest on the amount overdrawn for that number of days, which at worst would be 2% monthly or about 0.1% per day.

Work it out for yourself.... it's a massive increase disguised as a 'simplification' to the account.

And they will probably get away with this, because most people bin letters from the bank and even if they read them, they may be fooled into thinking this is a good deal. And then other banks will follow suit and we will all suffer because there'll be no one to switch to.

What can we do about it? Well, read all letters from your bank, and if they have any schemes like this, tell them you aren't having it and get ready to change your bank. And drop me a note and let me know.

I may reveal which bank this is in due course, probably best by showing a copy of the letter I received.

But not tonight.

Wednesday 21 October 2009

Postscript to last post

Can't get the hang of inserting images in this blogger, so sorry if the previous post insulted your artistic sensibilities. This composer really is pants, or I'm just getting too tired to use it properly, after all it is nearly 0130 UK time.. I think I'll stick to boring text - can't be arsed to type in html.

We've had a holday

Before anyone says, 'but you're on a perpetual holiday', I'll just smile sweetly and knowingly...

We took a trip a couple of weeks back, up to East Anglia (Colchester to be precise) to get away from the hustle and bustle of radio presenting and to kind of mark the end of summer and start of Autumn. We stayed in a hotel for a couple of nights and just enjoyed some 'us' time. Eating out, not having to wash up and going to places we wouldn't normally go.

For me, one highlight was a visit to Colchester Zoo, which is in the middle of nowhere, is big with plenty of space and has the most amazing and quite happy looking animals, like this fellow.

The food there was good value and there was plenty to see. We spent about 6 hours and still hadn't seen everything. Unlike my last visit to the Zoo in London which was done in less than 2 hours and you needed a mortgage to get a cup of coffee and a small slice of cake. The animals were mixed up in some cases, like in their natural habitat, for example, Zebras with Giraffes, Ostriches and a Rhino. Of course our friend on the right wasn't mixed with the above as the collection wouldn't last 5 minutes!

If you'd like to see all the pictures I took at the zoo, you can go here:

Back home now, certainly have felt refreshed and have been enjoying my radio shows even more. My birthday's up and coming soon, so looking forward to having plenty of alcohol and curry.... (Talking of food, had the hottest hot Pepperoni pizza tonight from the Pizza place near the radio station, it was dee-lic-ious)

Currently watching an old 'Mock the Week' on 'Dave', and thinking about bed.