halifax and the APR

[lilly white]

JUST A POST SOMTHING I AM WORKING ON

 

 

Consumer group Which? has made a complaint to the Office of Fair Trading (OFT) over Halifax’s current account, which claims to have a 0% overdraft even though it has a daily rate of at least £1.

 

The effective rate of interest at the government-owned bank soars the lower the overdraft — and works out at an annual percentage rate (APR) of a mammoth 365% for those who go just £100 overdrawn.

 

Currency brokers have also come under fire for advertising “commission-free” deals that can end up costing you more because exchange rates are so poor.

 

And consumers often fail to realise their 0% balance-transfer credit-card deal will charge interest if they exceed their credit limit or spend on the card.

 

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Here, we uncover the truth about three “0% deals”.

 

OVERDRAFTS

 

More than 70% of people who slip into the red have an average overdraft of less than £500, according to the OFT.

 

Halifax Reward account holders receive a £5 bonus if they pay in at least £1,000 a month, but are hit with charges equivalent to 146% for a £250 overdraft or 49% for a £750 overdraft, based on the £1 a day fee.

 

Halifax says on its website: “As we charge fees on this account instead of interest, the typical rate is 0% AER \.” However, the bank charges £1 a day on overdrafts of up to £2,500 then £2 above that, then £5 a day if you exceed your agreed overdraft limit.

 

“This 0% AER is very misleading,” said Dominic Lindley at Which? “At £1 a day, a £250 overdraft is equivalent to 146% APR. It doesn’t seem very rewarding to us.” Lindley said this was the first instance of daily charges for authorised overdrafts. The consumer group believes Halifax is either in breach of advertising regulations or is exploiting a loophole by charging fees, rather than interest.

 

OFT regulations state financial firms must stipulate a typical APR on products that have “any fees or charges payable”.

 

A spokeswoman for Halifax said: “This account is the first to reward customers simply for using their bank account. No charge is made if an account is brought into credit by the end of the banking day.”

 

IT REALLY GOES BACK TO APR ON CCA IMHO THEY DESIGN TO BE MISLEADING AT BEST

[Patma]

That's very interesting lilly white. It just shows how careful we have to be nowadays and how crafty the banks are getting when it comes to squeezing money out of us. I'm glad Which has reported them to the OFT.