Do I really need an overdraft?
Many people in the UK will have access to "interest-free" overdrafts for which they may be charged a small administration fee on a monthly basis. However, do we really need an overdraft or is it simply a long-term extension of our own credit facilities?
The ideal of an overdraft should simply be access to emergency credit at very short notice. However, it can be very easy to fall into the trap of accumulating your overdraft facility with your income on a monthly basis to arrive at "accessible credit limits". This can often lead to situations where we fall into our overdraft facility earlier and earlier each month which can often lead to extended overdraft facilities which are often more expensive and attract higher interest rates.
Even an interest-free overdraft facility, although often very useful at the time, can be the first step towards more debt and more charges in the future. We all need to be vigilant and keep within our budgets and not automatically assume that our overdraft facilities are part of our "everyday budget". It is easy to suggest that a £100 overdraft is simple to pay back but this could become £200, £300, etc and the situation can easily get out of control.
Sir Tom McKillop leaves Royal Bank Of Scotland
Chairman Sir Tom McKillop has left the Royal Bank Of Scotland three months early in light of the recent disastrous trading period. While Sir Fred Goodwin took the brunt of the criticism regarding the downfall of the Royal Bank Of Scotland, which is now majority owned by the taxpayer, Sir Tom McKillop has come in for his fair share of criticism over the last few days.
Behind the scen...
Yorkshire Building Society benefits from Chelsea Building Society merger
Yorkshire Building Society this week announced a major turnaround in the group's fortunes storming back to a profit of £65.4 million for the first half of 2010 against a loss of £22.3 million for the same period last year. While the company has benefited from the recent merger with the Chelsea Building Society there is no doubt that action taken in 2009 has given the society a strong base for fu...Read More
Gordon Brown steps into bank overdraft saga
Whether Gordon Brown is just looking to prompt the endgame to what has become a long-running saga or looking to curry favour with UK investors is open to debate, but his statement that UK banks need to negotiate a solution to the overdraft charge court case has been welcomed across the board. This is the first time that Gordon Brown has actually commented on the issue and his suggestion that the i...Read More
Lloyds to cut bank charges
Lloyds TSB has announced plans to cut its charges on unauthorised overdrafts.The bank is the first on the high street to announce such a policy on the much publicised charges, which have led to customer uproar and will go the High Court in a test case next year.The new lower charges - which will be introduced on November 2nd - will see the bank cut its interest rates on unauthorised borrowing by a...Read More
Are packaged bank accounts really worth it?
As many elements of "free banking" start to disappear from the UK financial scene there are concerns that some packaged bank accounts are not worth the extra money. The vast majority of UK banks offer a service which, for a small payment per month, will give the customer access to a range of insurance policies and other services at "at no extra cost". These include amongst others, travel insurance...Read More