WARNING: Do NOT join HSBC if you plan on using overdraft Watch

angus_mcfisher
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Thousands of students have joined groups on the social networking site Facebook, protesting against HSBC's recent decision to start charging interest on the overdrafts of new graduates.

"Stop the great HSBC graduate rip-off" now has more than 2,500 members, while dozens of other groups started for the same reason are quickly accruing members.

The bank set itself on a collision course with Britain's newest graduates last month, when it announced it would no longer be offering any interest-free overdrafts for those who have recently finished university.

Most of HSBC's student customers graduate with hundreds of pounds in interest-free overdrafts, which until this year have remained interest-free for the first few months and years in their new careers. The bank would typically reduce the interest-free overdraft limits by around £500 each year.

However, in a letter to students last month, the bank announced that it would be offering interest-free overdrafts only to graduates who were willing to pay a fee of £10 a month. Otherwise, all overdrafts will be charged interest at 9.99 per cent a month.

The bank now faces losing thousands of student customers who say they feel betrayed by its sudden change in policy. Graduates have been most angered by the bank's suggestion that it has adopted the new policy with a view to teaching them that there is a price to pay for borrowing money.

A spokesman for the bank said most students made only very small inroads into their overdrafts in the first few years after university, and suggested this may be because they had no incentive to pay down their debt. He added that the bank was keen to weed out those who had opened several bank accounts purely to take advantage of all of their interest-free overdrafts.

But students have complained that the bank is hitting them when they are at their most vulnerable - as they are graduating with record amounts of debts and trying to find their first job. Many students are also struggling to find new banks to switch to, as most banks are unwilling to take them into graduate accounts until they have a job lined up.

Source: http://news.independent.co.uk/busine...cle2898459.ece
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sonicboooom
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Ahhhhhh, too late, i've already joined HSBC so I'll cross that bridge when I come to it.
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nikki
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(Original post by sonicboooom)
Ahhhhhh, too late, i've already joined HSBC so I'll cross that bridge when I come to it.
You can switch banks, you know!
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sonicboooom
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(Original post by nikki)
You can switch banks, you know!
Yeh, i know, just too much hassle now i've sorted it all out.
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snu
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It's really not much hassle at all. People are such suckers for thinking "aaagh i can't do it it's too hard" and get stuck with a crappy deal.
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sonicboooom
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(Original post by snu)
It's really not much hassle at all. People are such suckers for thinking "aaagh i can't do it it's too hard" and get stuck with a crappy deal.
I don't think it's too hard, i just think it's too much hassle with less than a month left til uni, i'd have to close one account, open another, tell the slc. And also, im graduating in three years time, things might change by then. Also, i could transfer my overdraft when i graduate to a credit card with 0% on BT.
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Mr. Mortell
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9.99% is a huge amount of interest when you could be paying 0%! It's worth the hassle.
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snu
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(Original post by sonicboooom)
I don't think it's too hard, i just think it's too much hassle with less than a month left til uni, i'd have to close one account, open another, tell the slc. And also, im graduating in three years time, things might change by then. Also, i could transfer my overdraft when i graduate to a credit card with 0% on BT.
How exactly do you plan on transferring a balance from an overdraft to a credit card?
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sonicboooom
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Yeh, fair enough, i prob couldn't do that, but i'll think of something....
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nikki
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(Original post by sonicboooom)
I don't think it's too hard, i just think it's too much hassle with less than a month left til uni, i'd have to close one account, open another, tell the slc. And also, im graduating in three years time, things might change by then. Also, i could transfer my overdraft when i graduate to a credit card with 0% on BT.
Credit cards tend to have really high interest rates once the interest free period is over, so I wouldn't recommend it. Plus, I imagine you'd have to take money from the card (at an even higher rate, in my experience) to pay the overdraft, rather than just a simple balance transfer.

To be honest, I think it'll be more hassle sorting things out later once you've been using your account for a while, rather than now when there's barely anything to deal with. I personally would run a mile rather than stay with HSBC given all the bad stuff I've heard about them, but if you're happy with them, you can do what you want, after all, it's your life.
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SuperDaz
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HSBC have given in to the protest :champ: :party:
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snu
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(Original post by SuperDaz)
HSBC have given in to the protest :champ: :party:
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SuperDaz
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http://news.bbc.co.uk/1/hi/education/6970570.stm

A student campaign using the social networking website Facebook has forced an international bank into a U-turn over charges.

HSBC is to abandon plans to scrap interest-free overdrafts for students leaving university this summer.

Thousands of students on Facebook had threatened to boycott the bank. The National Union of Students said this made all the difference to the protest.

The HSBC bank said it was not too big to listen to its customers.
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noaksey
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Thats OK then! I never knew this was happening!

At least HSBC will keep my overdraft when I leave Uni then...
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sonicboooom
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Hey, it looks like i don't have to switch banks now.
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