Olivia waits patiently…

Tuesday 30th September, 2008 - £7,926.83 in debt…

So, I’ve gone against PayPal’s wishes and cancelled the unauthorised transactions. Ha. That will teach them.

Well, I might incur ten small fees, but at least I’ll have stood my ground.

You’ll remember that, on Friday, I discovered that ten PayPal transactions, totalling about £80, were about to be taken from my bank account without my permission. To cut a long story short, PayPal told me that these transactions would be refunded eventually, but if I tried to stop them going through in the first place, I’d have to pay a fine for each separate returned transaction. I wasn’t too happy about this.

I spoke to the Financial Ombudsman yesterday morning, and they seemed pretty shocked that I’d been told not to cancel the transactions. My phone call was recorded as an official complaint, which PayPal will have to address within the next couple of weeks. Watch this space.

When I discussed the whole thing with Barclays, they agreed that I should cancel the transactions but the only way I could do this would be to cancel my PayPal Direct Debit, which I did.

Now all I can do is sit and wait, on the edge of my seat, for PayPal to respond to my complaint. Well, I might make the odd cup of tea and pop to the toilet every now and then - I do have a life, you know.

 More ‘Personal Reserve’ issues…

Thursday 12th June, 2008 - £8,920.19 in debt…

As a Barclays customer with a fair number of bank charges to reclaim, I’m sensing that something unsavoury might be afoot.

You might recall that, a couple of weeks ago, Barclays announced that it was launching what it calls a “personal reserve” - an additional amount on top of a customer’s overdraft, which will act as a buffer. As I’m always going over my overdraft limit, I was happy to hear about this. Today I received the paperwork through the post.

From August 18th this year, there will be a £150 reserve added to my £3,000 overdraft limit. This means that, for a fee of £22 (for every five consecutive days I use the reserve), Barclays will honour payments up to £150 over my limit. Isn’t that lovely of them? They’re referring to it as “a little extra breathing space”. Bless. If I go over the reserve amount, obviously they will have to charge a “returned transaction fee” of £8, but who can blame them?

Well, I can blame them. Call me paranoid, but isn’t this just a way of renaming their fees so that I can’t claim them back if the high court decides that overdraft charges are unfair? After all, apparently I’ll be paying for a so-called service.

If I go over my new limit, I’ll still pay £30 (the same amount I’m paying now), but at best I’ll only be able to claim back the £8 “over-overdraft-and-reserve” charge.

The thing that bothers me the most is the bank’s patronising attitude to its customers, who are all easily-led simpletons as far as Barclays are concerned. All over their little explanatory leaflets is the message: ”Gone over your overdraft limit, eh? Don’t worry - we’re here to help! Let’s just give you a bit of cash to sort yourself out and then we’ll forget all about it, okay?”

Of course, what they really mean is “It’s pretty much the same as before, only more complicated because we’re covering our own backs and saving ourselves some money. We need it more than you do. Hope you don’t mind - you can opt out if you do mind, but we’ve done that for our own benefit as well, so that we can say you had a choice. And you’re probably too stupid to tick a box without jabbing yourself in the eye anyway.”

Well, I’m opting out. Stick that in your pipes and smoke it, faceless Barclays bigwigs. Ha.

 With one hand they giveth….

It appears I was right to be suspicious of the new Barclays overdraft charges and ‘personal reserve’ system.

On further inspection of the small print, it’s only a handful of account holders that are likely to benefit from these changes. Most Barclays customers who consistently breach their overdraft limit will be in approximately the same boat at the end of each month balance-wise, give or take a pound or two.

How so? Well, here comes the science:

• The bank has reduced it’s fee for going overdrawn without prior agreement from £35 to £22

• The agreed overdraft interest rate has risen from 15.5% to 18%, offsetting any gains from the reduced fee.

• Should you borrow beyond your agreed overdraft, Barclays will allow you a ‘personal reserve’, or buffer. This buffer, which is advertised as being anything up to £1500, will in fact be £250 on average. It will cost you £22 to use this buffer.

• Once you start borrowing from the personal reserve, you will not be charged for any transactions made for five days. Once the five days have elapsed, you will be charged £8 per transaction.

• If you exceed the personal reserve, you will be charged £8 per transaction.

• On top of this, credit interest has been reduced to 0%

Baring in mind most account holders who borrow beyond their overdraft are caught in a monthly cycle, the charges incurred month on month with the new system are likely to mirror those incurred with the existing system.

The marked difference between Barclays new and existing accounts is the terminology behind them. The terms of these new accounts are entangled and complex, designed deliberately to confuse the account holders.

On the plus side, nobody will be worse off. However, there’s very little to gain for those with money troubles, and this move by banks can be viewed as a distinct sidestep around the ‘unfair fees’ problem.

‘Barclays slash overdraft fees’? Don’t believe the hype.

  Let’s go crazy….

As I’m sure Olivia Buck will be delighted to hear, Barclays today announced a relaxation of their unauthorised borrowing policy:

Barclays First to Reduce Overdraft Fees

Effectively, Barclays are prepared to supply you with a £1500 buffer beyond your agreed overdraft (if you have one), which they will charge you £22 to use, and allow you five days grace to clear. This buffer will be known as a ‘personal reserve’.

Certainly an improvement on the old ‘go one penny over the line and we’ll ruin your life’ regime.

However, I have a concern.

What with so many consumers forced to cut up credit cards, swap Liberty for Lidl and turn down their thermostats due to the precarious economical climate, won’t people view this personal reserve as free credit?

There’s certainly a psychological argument. Having been deprived of disposable income for some time, there will surely be an urge within a number of these new Barclays customers to go on the mother of all spending sprees.

The net result or consequences of this spending would be akin to loading up a credit card. Another possible avenue to help get you through these turbulent times blocked off by one’s own irrational need to consume.

So, will these measures work as a handy parachute to those who perennially slip into the red, or will they just add to the economical negativity blighting this country (and the rest of the world) in the long term?

 Olivia Buck says ‘Hi’

Monday 1st May, 2008 – £9,499.45 in debt…

Let me introduce myself: I’ve just turned 28, I’ve been in debt for ten years, and now I’m desperate to pay it off. How did I get myself into this dungheap of a mess of a quagmire?

I’ve always been rubbish with money, and now I’m rubbish with debt. Being in the red was fine at uni - like so many students, I got used to spending money that wasn’t mine. After I graduated, I lived with my parents for two years and paid most of it off, but then I moved to London.

I’ll tell you this for nothing: Living in London is expensive. That’s the first of many shiny nuggets of wisdom you’re going to get from this blog, and I hope you appreciate it. It’s not like I was eating diamond-encrusted swans for breakfast, but an Ikea spree here and there soon adds up.

Over the last year or so, I’ve had the feeling I should be getting out of my debt-hole. My credit rating has gone past ‘high risk’ and into ‘extreme’ territory – only adrenaline junkies and the mafia would lend to me now - but mainly I want to cut up my credit cards because being in debt feels horrible.

So far, I’ve made the following efforts:

• Although I’m self-employed, I’ve got a second job as a part-time secretary. It’s almost unbearable, but it pays the rent.

• My biggest debt was on my Barclaycard at nearly 30% APR, so I’ve transferred half the balance to a Tesco card on an interest-free deal.

• After doing that, I cancelled my Barclaycard and set up a standing order to make regular payments. When I explained why I was doing this, the Barclaycard people were kind enough to drop my Standard APR by a couple of percent.

Even after that, I’ve still got credit card bills of £200 a month and those payments are covering little more than interest. I also have an overdraft limit of £3,000, which I was always straying past before I got the temping job (bad news at the time, but I might be able to claim back some bank charges – more on that later…).

So, here’s the bottom line: How much I owe.

Barclays overdraft: £3,000 (I’m always at the limit by the end of the month)

Barclaycard: £2,977.46 at 27.9% APR

Capital One card: £999.00 at 24% APR

Tesco card: £2,399.00 at 12% APR

NatWest card: £123.99 at 13% APR

That’s a total debt of £9,499.45 (plus interest), which I plan to eliminate completely by my 30th birthday at the end of April 2010. I then plan to fit Jupiter into a blender and become the first woman to unicycle across the Atlantic.

My first job is to pay off that pesky little NatWest card as quickly as possible. I currently pay off that card at £10 a month so, once it’s taken care of, I can add £10 onto my monthly Barclaycard payment.

I’m open to suggestions, so please help me out!

 I’ve got 24 months to get solvent and apart from Ebaying all my belongings and working overtime, I need to know: 

1. Can I make more money?
2. How can I save money so I can increase my card payments without feeling the pinch?
3. What have you done to pay off your debts?
4. What works and what doesn’t?

 Over the coming weeks I’ll be trying out any suggestions I’m given (apart from illegal ones) and regularly reporting back.