I have a secondary current account with Halifax, which I use for paying bills and rent.Today I received a letter from them. Here’s an extract:
From 6th December 2009 we’ll no longer be paying the 0.1% AER/gross interest we pay you on the balance in your account, or charging you debit interest on any overdraft you use. Instead, we’re introducing new, simple and easy-to-manage overdraft fees.
- If you use an arranged overdraft up to £2,500, we’ll charge you £1 a day
- If you use an arranged overdraft over £2,500, we’ll charge you £2 a day
- If you use an unarranged overdraft, we’ll charge you £5 a day
- We won’t charge you any interest on an overdraft, whether it’s arranged or unarranged.
I’m no financial expert and I’m sure Halifax have their reasons for implementing this policy. But to your man off the street, the expected way that banking works is quite simple.
- You are rewarded for saving with a bank
- You are penalised for borrowing from a bank
By these rules, it seems that Halifax have increased their penalties and totally stopped their reward. So there is now no incentive to have a current account with Halifax. My account is almost never in overdraft but I don’t wish to be charged £5 every time my broadband company sends a larger-than-expected bill. I also don’t wish to go without my 0.1% interest, as a matter of principle.
Surely they realise that people will flock away from such a proposal? I for one plan to close my account immediately and move it to a different bank. No doubt a run on the bank will cause them to collapse, and demand a bail-out from the government, but oh well.