Buffer on account?


(Scott) #1

Just a quick one,

Do we have an automatic buffer on our account? As in like £10 or something?

Thanks all


(Adam Williams) #2

I think it’ll be £20. See https://monzo.com/blog/2017/08/24/overdraft-preview/


(Scott) #3

Thanks Adam, much appreciated :+1:
So would this be on every account as standard? I mean if you didn’t have / want an overdraft?


(Adam Williams) #4

My guess (and understanding from reading about the overdraft) would be that if you don’t take an overdraft:

  • Online transactions are rejected at point of use if you have insufficient funds (i.e. no buffer use).
  • Transactions that happen later and can’t be rejected will use your buffer/count as an overdraft.

So I would suspect the buffer is sort of there for every account, but only for the edge case mentioned. I might be completely wrong here though so it would be useful to get this clarified.


Edit: Actually, re-reading the blog post makes me think this might be wrong. It would seemingly make more sense to allow the buffer to be used and then start rejecting transactions. Honestly, not too sure.


(Scott) #5

That’s what I thought, I read the blog and could mean either way lol! Hopefully we’ll get clarification on this from Monzo :sunglasses:


(MikeF) #6

When I asked the question in the associated forum thread I was told the £20 applies to all accounts.


(Kevyn) #7

I really hope I wont be able to go into debt if I do not request an overdraft. I like the idea of an account which cuts off at £0 and I am not interested in an overdraft with Monzo. You can get better overdraft rates elsewhere.

My reading of the blog is clear. You do not get the buffer without an overdraft or else Monzo would be handing out free cash.

For the preview, the overdraft will cost 50p for each day your account is overdrawn. We’ve also built in a £20 buffer so that you can use £20 of the overdraft with no charges, for as long as you need. Charges will only kick in once you go below -£20 on your account balance.


(MikeF) #8

Well, if we really have to play the quotes game…

The post Tom was responding to was me say8ng the free £20 only applied to overdraft applicants.


(Tommy Long) #9

You won’t be able to “go into debt”. Monzo are providing a free buffer. If you went -£20 and closed your account Monzo would likely absorb the loss, rather than ask for the money.


(Hugh) #10

I wonder if this would affect your credit score?
Presumably not if they are offering it “free”.


(Tommy Long) #11

It’d be up to Monzo to decide but I get the feeling they’re the sort of company to absorb it and not report it on.


(Naji Esiri) #12

No, credit scores should only be adversely impacted by being in your unauthorised overdraft, and there is a buffer (typically around £10) before your unarranged overdraft is reported. We’d like to push it to £20 so it’s consistent with the fee-free buffer.


#13

Have we got an answer on this?

I want to use the account like my prepaid card. So I want payments refused if they take the balance below £0, not £-20.


(Hugh) #14

If you don’t sign up for an overdraft, you can’t go below £0 :slight_smile:


(MikeF) #15

What’s left to answer? I thought this thread was fairly clear on the existence of a £20 buffer. I’ve not read anything anywhere else contradicting that.


#16

Thank you for the clarity . crablab


#17

I wasn’t clear if the buffer applied only if you had requested an overdraft. crablab has confirmed that this is correct, so I’m happy :grinning:


(MikeF) #18

Fair enough, however Tom’s reply to my identical query a few months ago (quoted above) was that the £20 applied to everyone.

With all due respect to Hugh, I’d go with the answer from the CEO!


(Hugh) #19

Yeah fair enough, I was told something different a while back at an open office but it may well have changed :slight_smile:


(MikeF) #20

I guess I ought to try and go overdrawn just to find out one way or the other… Shame I was paid yesterday. (There’s a sentence I never thought I’d write!)