but you would have been using your arranged overdraft as well - otherwise why have it and offer the scenario of not being charged for it because you have £500 in your goal ??
That’s a very fair point. A compromise solution could involve a fee reprieve for 48 in case someone forgets to move money to their main account (of course only if they have money in pots) - or doesn’t have internet access for 2 days.
I do not think everybody just uses overdrafts for emergencies, we were just discussing how it works and when interest is charged. I am aware from when I had a Consumer Credit License and gave debt counselling that many people are stuck in their overdrafts.
However I see charging them when they have a positive Monzo account balance as agravating their situation, and Starling only charging if their account is overdrawn better for those in financial difficulty.
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can I just be clear if you have a £500 arranged overdraft with Starling do you spend that money ? or do you just leave it sat in your account with a 0% charge as long as you have £500 in your goals - what do you want or need an overdraft for unless you are going to spend it ?
That is a problem for some people with any credit, if the overdraft has a daily 50p charge or a %, if a charge is levied due to a partial account balance or a rate levied on the total balance, if there is a £20 buffer or a £1 interest waiver. To imply they are going to be suckered in by the one overdraft and not the other is naive.
Just to confuse things more…here’s a screen shot for a visual view…(p.s I’ve transferred money to monzo and put my overdraft to £1000 for screen shot…to show the impact) maybe @anon44204028 can explain it better…
I guess here my overdraft is £1000 but because of goals I won’t be charged until I’m £492 or so in…
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Essentially if you have money in goals, and an overdraft, you spend your goal money to a certain point, whereas if they haven’t approved an overdraft for you, they won’t let you spend your goal money unless you move it to your main account.
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of course some will spend it, that is the issue with credit. However, if you are going to use your whole credit line longer term then a more appropriate credit form would be a loan. Interest on a small personal loan may even be more competitive rate. I think Starling have been discussing offering these at some point.
Either way I feel in any Monzo university and any Monzo or Starling FAQ there is a role for the banks to educate customers in this regard, about different credit types and purposes.
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its been offered on this discussion that the overdraft with Starling is “free” if you have money in goals , to not then spend that “free” facility will be for some very hard - I would use the term “suckered” with a “free overdraft” offer some would not use “astutely” - be it Monzo or Starling or Barclaycard etc etc - its an inducement for some less well equiped to spend beyond their means
Let’s go back to the start.
Are you charged for a Starling overdraft if you have enough money in goals?
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so you keep your £500 in your goal and Starling with an arranged overdraft “give” you an extra £500 to spend, which they don’t charge you for because you have £500 in your goal to cover the overdraft ?
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The overdraft is not “free”, it is still at 15% but it is on available balance and if you have that money in your account your available balance takes that into account. The goals are part of your acount, they are not transferred out to a third party institution.
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yes I understand that - its not charged interest because you have an equal amount in goals
No. Because that money is in your account so you are not overdrawn on that account.
It would be a different situation in a bank like bunq where their Goals or pots have a unique account number so are technically a different account and not part of the primary account.
Monzo pots and Starling goals are both part of your account, not separate accounts, and therefore should (as Starling do) be taken into account.
so you get to keep your £500 in your goal earning 0.25% and Starling give you the facility to spend another £500 at no cost because you have £500 in a goal ???
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In my view, that’s encouraging people to use their overdraft.
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Unless they go to Account Management > Overdraft and it tells you how much its costs MTD… 
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I think this is true for when you regularly have money coming in, or are close to pay day, but do you think that once you’re paying the fee without being able to pay it off until pay day that there’s no disincentive to borrow more than you need? As either way it’s a penalty for being in the overdraft, regardless of the amount.
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So… Who’s taking Monzo to court to find out 
. Shotgun not me 
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but if you spend that £500 overdraft you are not getting 0.25 interest on the amount in your goal! the interest is on the account and by spending the £500 be it from inside a goal or outside from an overdraft it means you have reduced your balance by £500 so you can’t get interest on a £500 that is no longer there! You have spent it!
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