As a responsible lender, we monitor overdraft accounts to check if they’re being used repeatedly. We consider a number of factors, including:
Overdrafts are meant for short-term borrowing. For example, if you need to do a food shop before payday, an overdraft can help you bridge the gap. Because overdrafts are only meant to help you cover expenses in the short-term, they usually charge a higher rate of interest than other ways of borrowing like a credit card or personal loan.
If you’re using your overdraft often, you may want to look at your spending habits and other ways of borrowing to reduce the amount you pay in interest.
Explore: Overdraft repeat use FAQs
If you’re an HSBC customer and your account is in repeat use, we’ll send you a letter to let you know. You'll be given some options, which may help reduce the amount of interest you’re paying. We’ll then review how you go in reducing your debt, and contact you again after 6 months.
If your account is still in repeat use after 12 months, we’ll contact you again. To help prevent you getting into any further debt, we may reduce or suspend your overdraft limit.
To get your finances in order, you may want to consider creating a budget. This can help you break down your income and outgoings, and identify where your money is being spent. You’ll then be able to see where you can make changes, or possibly cut back on your outgoings.
Explore: How to create a budget
Other steps you can take that may help:
Using online and mobile banking can help you keep track of your spending.
If you’re an HSBC UK customer, you may find it useful to use a tool like Balance After Bills – a feature in the HSBC UK Mobile Banking app. It shows how much you could have left for spending, once scheduled bills (standing orders and Direct Debits) are taken into account.
We’ve also set up text alerts to let you know when you go into your overdraft – or are about to – so you can try to avoid overdraft charges. This service is set up automatically when you take out an HSBC overdraft, but you can choose to opt out.
There are a number of independent organisations who can provide help and give general advice about managing money.
You can find out about free independent money advisers in your area from:
The following helpline services can offer help and advice:
If money worries are making you feel anxious – you are not alone. Get help and support with your finances.
Explore: Money worries