The Student Room Group

Overdraft Worries

So I currently hold a student account with HSBC which "offers you an automatic overdraft of at least £500 free of overdraft interest at account opening". My guess is that they've given me a £500 overdraft for free which I don't have to pay back?

I thought this as when I first set up the account, I had around £50 in my bank, but under the available tab it showed I had £550. So they've essentially given me 500 to spend if needs be? I may be horrendously wrong here, which is why I'm worrying so much.

Getting to the real issue, as of now I'm around -£180 in my bank, but under the available tab I've got a whopping £3.57. Does this mean that the £3.57 is all I have to spend? What about the -£180?

If anyone could give me some clearance on this, it would be much appreciated!
They have given you a £500 overdraft facility, which means they will let you overdraw by £500. You wont be charged interest and wont have to pay it back as long as the faciliyu remains in place. It normally ends when you leave uni, although they gradually reduce it.

Yes having the £550 would be your £50+ 500 unused overdraft.

The next bit is confusing and doesnt make sense. You are better off rininging elephone banking and getting them to explain the status of your account.

Being - £180 should indicate you still having £320 left of your o/d facility. You say it says £3.57, which on the fact of it indicates an overdraft of £183.57, which wouldnt make sense. In these situations its normally because you have outsanding payments that havent made it through the system yet. That is £316.43 worth of bills that have only been partly registered and will come off your account in due course. Have a look at your statement or think about recent bills you may have had, but which you cnat see on the statement. Sometimes they take a few days to show up.

Telephone banking or looking online will make things clear. You are most likely £496.43 O/D, but check.
Reply 2
Original post by 999tigger
They have given you a £500 overdraft facility, which means they will let you overdraw by £500. You wont be charged interest and wont have to pay it back as long as the faciliyu remains in place. It normally ends when you leave uni, although they gradually reduce it.

Yes having the £550 would be your £50+ 500 unused overdraft.

The next bit is confusing and doesnt make sense. You are better off rininging elephone banking and getting them to explain the status of your account.

Being - £180 should indicate you still having £320 left of your o/d facility. You say it says £3.57, which on the fact of it indicates an overdraft of £183.57, which wouldnt make sense. In these situations its normally because you have outsanding payments that havent made it through the system yet. That is £316.43 worth of bills that have only been partly registered and will come off your account in due course. Have a look at your statement or think about recent bills you may have had, but which you cnat see on the statement. Sometimes they take a few days to show up.

Telephone banking or looking online will make things clear. You are most likely £496.43 O/D, but check.


I probably should have included this but didn't, when I was first given the overdraft I did spend some of it before my university loans came through. I can't remember how much but I do remember taking money out of that overdraft. I believe it was maybe £100-£200.
Hope that helps.
Original post by CptConnor
I probably should have included this but didn't, when I was first given the overdraft I did spend some of it before my university loans came through. I can't remember how much but I do remember taking money out of that overdraft. I believe it was maybe £100-£200.
Hope that helps.

I worked on the information you gave me. If you bother to read my post then the advice still stands.
Reply 4
Original post by 999tigger
I worked on the information you gave me. If you bother to read my post then the advice still stands.


I did bother read your post, you said that the last part was confusing so I added extra information which I thought might be useful.
Original post by CptConnor
My guess is that they've given me a £500 overdraft for free which I don't have to pay back?


No..You have to pay it back..


Original post by CptConnor

Getting to the real issue, as of now I'm around -£180 in my bank, but under the available tab I've got a whopping £3.57. Does this mean that the £3.57 is all I have to spend? What about the -£180?



So if you've already spent around £200 for uni then spent another £180 so you'd be -£380, so you should have £120 left so maybe theres pending payments that haven't gone through yet? It sounds like you've managed to spend all of the £50 and your overdraft
Original post by CptConnor
So I currently hold a student account with HSBC which "offers you an automatic overdraft of at least £500 free of overdraft interest at account opening". My guess is that they've given me a £500 overdraft for free which I don't have to pay back?

I thought this as when I first set up the account, I had around £50 in my bank, but under the available tab it showed I had £550. So they've essentially given me 500 to spend if needs be? I may be horrendously wrong here, which is why I'm worrying so much.

Getting to the real issue, as of now I'm around -£180 in my bank, but under the available tab I've got a whopping £3.57. Does this mean that the £3.57 is all I have to spend? What about the -£180?

If anyone could give me some clearance on this, it would be much appreciated!


First off, the overdraft isn't 'free money' - why would HSBC just 'give' you £500? It's a credit facility, which means they will allow you to borrow up to £500 by taking £500 more out of your account than there is in there. So, in your example, because you had paid in £50 into your account, you could take out £550 - the 'credit' balance of £50 + up to £500 borrowing from your overdraft.

You can use your overdraft as and when you want to, up to its limit. You don't have to borrow the whole £500. Overdrafts are repayable on demand, though in practice if you run the account properly and are being funded by SFE or another source they won't take it away without at least some notice and agreement.

The -£180/£3.57 issue is most likely to do with things 'waiting to clear' - these are either transactions you've made or money that's been paid in (often via cheque) which has not yet cleared (become available) onto your account, but is in the process of so being - it's sort of 'in limbo'. The figures you've quoted suggest that you've paid in, or someone else has paid in £183.57 into your account by cheque.

Does this help?

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