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overdraft cut beanc

Posted: Thu Mar 02, 2017 3:21 am
by stryker1227
After banking with Lloyd's in its various incarnations for 40 years my arranged overdraft has been cut unilaterally by 66%. The bank confirms my account had been managed properly and the reason for the cut was that I had not used the overdraft facility.



Despite 2 requests at branch level they could not reverse the action as an automatic letter had been sent.



I am therefore switching to another bank.😣

Posted: Thu Mar 02, 2017 12:12 pm
by silentsnipe210



After banking with Lloyd's in its various incarnations for 40 years my arranged overdraft has been cut unilaterally by 66%. The bank confirms my account had been managed properly and the reason for the cut was that I had not used the overdraft facility.



Despite 2 requests at branch level they could not reverse the action as an automatic letter had been sent.



I am therefore switching to another bank.😣
Originally posted by beanc


Why are you so upset if you're not using it?

Posted: Thu Mar 02, 2017 11:46 pm
by orientalism
I have banked with Lloyds for almost as long as you and have had an arranged overdraft for decades. It was reduced once (by around 16%) a few years back, when Lloyds were having their own financial problems. The reason given to me was the same as given to you plus some comment about them having to insure their overdrafts and the underwriters imposing stricter controls.

I understand that what has happened can be frustrating. Ideally, an arranged overdraft should never be used but exist simply as an emergency reserve and it's existence on your credit files can give an added reassurance to lenders.

However, before you close this account, which is presumably being reported on your credit files with an account age of 40+ years, and replace it with a new account consider the following.

How does the new overdraft limit compare with the average monthly current account turnover?

Is this account your main current account which receives your income?

Do you believe that you will be able to get a higher overdraft facility elsewhere?

Have you selected a new account which meets your needs?

Remember, THE GRASS IS NOT ALWAYS GREENER.

Posted: Fri Mar 03, 2017 4:44 am
by carousel



Why are you so upset if you're not using it?
Originally posted by bigadaj


I was wondering that too!

Posted: Fri Mar 03, 2017 10:06 am
by modoatk
What a strange response to a decision that doesn't affect the way you manage your money.

Posted: Fri Mar 03, 2017 2:52 pm
by greyhawk90
Banks aren't your friend, they want to make money from you.



I suggest you move elsewhere but keep the Lloyds account open to suit you

Posted: Sat Mar 04, 2017 2:41 am
by lorddumbo1512
We have a pre-arranged £5000 overdraft with Barclays, and then another £500 emergency borrowing ( imagine using the five grand and it not being enough, so you had to use another £500 ). We've never, ever dipped into it, far cheaper ways to borrow money. If they reduced it to, say, £1000, it would not bother me at all.

I suppose I might wonder why, but it certainly wouldn't make me want to move.

Posted: Sat Mar 04, 2017 12:45 pm
by donavon
Overdrafts are repayable on demand and can be removed at any point, I would suggest as you were not using it, they removed it, but wait for the letter to arrive and see what it says, they may reinstate it if there is a need, like a high bill due out.



That said if you haven't used it, you shouldn't miss it all that much.

Posted: Sat Mar 04, 2017 7:26 pm
by aliaalias



I suppose I might wonder why, but it certainly wouldn't make me want to move.
Originally posted by Shakin Steve


Banks are required to tie up capital for overdraft facilities even if unused. So there's a cost to the bank. With operating margins under pressure. There'll be a systematic root and branch review in progress by a dedicated team.

Posted: Sun Mar 05, 2017 5:56 am
by localize



After banking with Lloyd's in its various incarnations for 40 years my arranged overdraft has been cut unilaterally by 66%. The bank confirms my account had been managed properly and the reason for the cut was that I had not used the overdraft facility.



Despite 2 requests at branch level they could not reverse the action as an automatic letter had been sent.



I am therefore switching to another bank.��
Originally posted by beanc


I had this happen to me a few years ago when my facility was £10k. They wanted to reduced to £5k because of non use. I started using it and went about £300 overdrawn. A little while later they sent me another letter and said based on the fact I was now using the facility they would leave at the original amount.



I do use the overdraft more now but ensure the overdraft is paid back the same day.



That way I pay no charges and they can see it is being utilised.