Overdraft charge will teach a valuable lesson - suggests bank
Do banks have the right to burn the fingers of their customers, in order to teach them valuable life lessons? One bank believes it does.
A recent announcement by one of the UK’s leading banking institutions has sent shock waves through the student community. The HSBC has revealed that it intends to abolish interest free overdraft facilities for graduates, opting to replace them with a standard 9.9 percent interest variant.
Of course, many customers of the HSBC will not be to pleased with the proposed change, especially when you consider the organisations reasoning for the move. According to a spokesperson for the firm, the primary reason for the change was bourn not out of financial gain, but more out of concern for their customers approach to their finances.
The bank believes that by tagging interest to overdraft facilities, post students will be encouraged to adopt a more proactive attitude towards their finances, which in turn will better prepare them for the world of work. The firm has stated, that the most effective way to learn to manage your finances is to understand what to expect from the beginning.
Although the theory is logical, some students have criticised the move stating that graduates rely on such facilities whilst learning to balance their credit. It is also noted that few graduates land their ideal job within the first 18 months of graduation and hop between low paid jobs in the interim.
The bank has also announced that the new scheme is scheduled to go live within the next few months, and will completely replace the current system. If you have any further questions or queries relating to your overdraft facility, you are advised to contact your local HSBC branch.
