Originally posted by AtW
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Reply to: overdraft fees
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Previously on "overdraft fees"
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If 5% is not worth having on your investments, you're too stupid to have investments.
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Originally posted by SimonMac View PostI would say an overdraft is a sign of bad financial planning (stupid) rather than lack of money (poor).
Originally posted by BrilloPad View PostSurely those who pay huge percentages in overdraft fees should be grateful to the banks for pointing out how stupid they are?
Overdraft fees are ridiculous. All they do is lock the victims in to an endless cycle. Appropriate rates are sensible to cover the debt, but adding hundreds of pounds of fines on per transaction, then idiotic interest locks victims in to an endless cycle.
We once got in to a bad overdraft, when the OH needed an operation and had to miss work, dropping down on her salary and I had to take time off to be with her. Even dipping slightly in to an overdraft then meant the next month, while we could skimp by and technically earn more than we spent, after paying off all the fines, we were back in the red. We nearly got stuck in that hole permanently like we have seen others get stuck in.
It isnt just the "I want" mindset this affects but more people than one might think. Sometimes it isnt poor financial planning or spending more than you earn, sometimes it can be set off by a chain of events like illness and a bigger than normal bill one month then 'bam'.
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Originally posted by d000hg View PostNo it's not. The optimal strategy is to have the absolute minimum in current accounts and move money into those accounts as needed, so you get maximum interest on your high interest accounts.
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Originally posted by AtW View PostNo, that's not good financial planning - that's being very very stupid.
BUT, such a strategy is far less error-resistant.
When you have enough money for more than one account you'll learn these things
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I sometimes go into my overdraft
But then again it's usually because I've forgotten to transfer money into the account
I'm quite often guilty of poor financial planning and money mismanagement.
Today I blocked one of my credit cards while fuelling the car in Portland; I put the pin in for one of my other cards - three times. Note to self, must call and unblock it
Reason I wasn't using my debit card was I'd forgotten it and left it in Wales
See, Totally financially challenged
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Originally posted by d000hg View PostGood financial planning means you typically have little in a current account, therefore it's easy to stuff up.
Example 1 - I had written a cheque A for £1000 from account A and I paid in a cheque B for £2k to account B before cheque A was cashed. The money showed up on Account A immediately but I couldn't move it until it cleared, 3 days later - in the meantime cheque B was cashed and I ended up overdrawn since I don't keep that much floating in the current account.
Example 2 - I knew my credit card was near the limit before we went on holiday and wanted to make sure we had credit available abroad. So I made an additional payment of a few £k. Only to find they didn't automatically take this off the balance, but proceeded to try and take the full amount from my account which was now empty after paying out several £k... hence my credit card company tried to charge me for failing to pay them, and my bank tried to charge me for a failed payment.
The more carefully you plan things, the easier you can stuff it up... keeping all your cash in one account would be far easier
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