Announcing the Overdrafts Preview!

[alexs (Alex Sherwood)]

@Tink

As a bank, wouldn’t this approach also limit the amount of customers that would use the overdraft? Surely there is a bit chunck of your userbase that are students and young professionals that are more likely to want to borrow £50-£100 than £250+? And as you will be relying on overdraft to make money l don’t understand why you are limiting the userbase in this way? What am I missing?

There’s plenty of users like yourself but

@alexs

7/10 people use overdraft on average each month, and average overdraft utilisation is around £700

Figures from the CMA’s 2015 retail banking financial performance report.

And while we’re on the subject, that also plays into the APR / AER comparisons discussion because obviously a borrower who has a £700 overdraft has a much lower APR / AER than one who’s borrowed less..