Overdraft repeat use FAQs

As a responsible lender, we regularly review our customers’ overdrafts. If we see that an overdraft is being used very regularly, we’ll get in touch to make you aware you may be incurring high and avoidable costs, and to ask you to try to avoid this in future. We may also be able to help you avoid this.

Repeat use refers to a pattern of overdraft use where the frequency and depth of use may result in high cumulative charges that are harmful to the customer or indicate that the customer is experiencing or at risk of financial difficulties.

We wrote to you to bring the costs of your overdraft use to your attention and ask you to take steps to reduce usage. We'll also provide support.

We provide information to help you review your monthly commitments, and let you know where you can get free and impartial help if you ever need it.

Generally, the longer you use your overdraft the more it will cost overall. By reducing overdraft use, you could save money.

You’ll need to reduce your overdraft use. Using your overdraft less should mean you’re charged less. We’ll write to you again 6 months after the first letter to let you know how you’re getting on. We'll confirm that you're either:

• no longer considered in repeat use
  
• still considered in repeat use, in which case, we’ll keep communicating with you
  

Overdrafts are designed for short-term borrowing. Using an overdraft too much or on a long-term basis could mean it takes you longer to clear your outstanding balance. This will cost you more in the long run.

We’re only writing to customers who are in repeat use. It may be that your friend/family member hasn’t used their overdraft facility repeatedly. If they have, then we’ll write to them at the appropriate time.

All customers can ask for support with managing their money. A lot of the information we provide could be useful whether you’re in repeat use or not. For example, it could be worth reviewing how you use your overdraft and what you pay in interest to help you change the way you use it.

If you're within your overdraft limit, you haven’t done anything wrong. However, you may be paying more than you need to in interest, which is why we’re letting you know and encouraging you to review and reduce your overdraft usage.

Even if you haven't exceeded your arranged overdraft limit, your use could be causing you to incur high avoidable charges. 

If you decide not to change the way you use your overdraft, we may take certain steps as a responsible lender. This could include reducing, suspending or removing your overdraft facility.

There are different ways to reduce repeated overdraft use. Some examples are:

• review your monthly commitments - this can help you to reduce or remove unnecessary expenditure
• reduce the number of days each month you use your overdraft - this can make a difference, even if only a few days
• create a budget that looks at your earning and spending to help you identify where your money is going and where you may want to make changes
• reducing your overdraft by transferring funds in from any other accounts you may have
• have a look at other borrowing options that could meet your long-term borrowing needs - this may help to reduce your monthly interest charges
• if you need further support reducing your overdraft usage, contact our specialist team on 03450 307263 for help with avoiding repeat overdraft use

There are a number of ways you can reduce spending or increase your income. Some examples are:

• reviewing your tax codes. Visit gov.uk/guidance/hmrc-tools-and-calculatorsgov.uk/guidance/hmrc-tools-and-calculators to check you're paying the right tax
• checking you’re receiving all the benefits that you’re entitled to. Visit gov.uk/benefits-calculatorsgov.uk/benefits-calculators
• checking for any tax credits you might qualify for. Visit gov.uk/tax-credits-calculatorgov.uk/tax-credits-calculator
• reviewing your utility bills. You may be able to make big savings by switching provider or just changing tariffs. There are lots of different comparison websites that can help you find the best deal
• reviewing all your borrowing. Ask yourself if you have the right products to meet your needs

You can also keep a track of your spending through:

• our mobile banking app
• online banking
• overdraft text alerts

We’ll send you a text message when you go into your arranged or unarranged overdraft (including any interest-free overdraft amount on your account). We’ll also text you if you don’t have enough money to make a payment. We’ll do this as long as we have a correct mobile number for you and you haven’t chosen to opt out of the service.

Depending on how you use your overdraft, there may be cheaper ways to borrow for longer. Take a look at our Ways to Borrow page for more information.

If you decide not to change the way you use your overdraft, there are certain steps we may take as a responsible lender. This could include reducing, suspending or removing your overdraft facility.

If you feel you’re not in a position to reduce your overdraft use, or are worried about your finances in general, you can find more help at:

• hsbc.co.uk/financial-fitness
• hsbc.co.uk/help/money-worries
  

You can get independent help and advice from free and impartial organisations, some of which are listed below.

The agencies mentioned above offer support for free. There may be other service providers who charge for this service. Make sure you check when contacting them.