That’s a really odd theoretical.
Spending all available money + £20.01 on day 1
Leaving it for the month. £15.50
Here’s something a bit more realistic and just as OMG?
Use your overdraft 4 days a month? That’s £24 a year.
Compared to traditional APR
15%, £200, 4 days a month = £3.95
But - one adequately covers the bank’s fee for managing accounts.
This is what I mean though. It is hypothetical until people have it an start using it. It is a completely optional feature and users don’t have to take it, if they do request one they know exactly what they are in for. As for transparency I am not sure how they could be more so.
Personally I don’t think it is the best deal so please don’t think I am trying to defend Monzo just because. I would, like others, want a larger free buffer. A tiered fee depending on overdraft amount. But this is currently the only revenue stream for Monzo and I want them to be around long enough to innovate and hopefully reduce user fees in future.
For for a first go, sure i am happy with it. Could be much worse and let’s see how it improves.
I’ll just leave you with this -
From the CMA’s 2015 retail banking financial performance report.
Over how many days per month @alexs?
Could you break down the maths for that please? That doesn’t sound right to me.
I’m not 100% sure but we do know that
Thinkmoney’s survey found that 21 per cent of respondents admitted to being in their overdraft less than a week after payday, while 13 per cent slipped into it just a day after getting paid.
So not so odd. Slightly depressing.
People need to transfer overdraft away to something more manageable and separated once they have an income again.
cough Loans or credit cards would be better than an overdraft, but people see cheap. cough
Payday loans are far too short - 1 to 3 periods from the first result on Google.
If someone can put down an alternative that would be financially viable for Monzo I’m sure they’d look at it.
We don’t know the exact running costs of Monzo. We have an idea but not the true figures.
There’s no question about that.
So I guess we’ll have to wait & see whether users care about that % or this one
or not at all..tbc 
I mean that if users can see the £’s & pence cost of borrowing the money for a short time & value the other benefits that Monzo offer, perhaps they’ll still use Monzo’s overdrafts. That seems to be what Monzo are assuming so we’ll have to wait & see whether that prediction turns out to be correct or not.
We know that Monzo’s not going to win any (or many) price comparisons but (hopefully) that’s not the point.
I guess we have a different definition of fair 
after all, it’s subjective so there are lots of opinions about what it means. But to sum up, this pricing doesn’t concern me, for the reasons I’ve explained in this thread.
Ultimately this comes down to supply & demand, if this pricing is reasonable then users will borrow from Monzo, if it’s not then they’ll have to change their pricing.
As I say we can continue debating the value of a Monzo overdraft vs others but I think we are missing a more important conversation.
Are some people wanting overdrafts at Monzo so they can move debt over from their existing banks?
I am linking all my comments above to a new Monzo user that may initially have no overdraft functionality and starting/continuing with a positive balance. This may mean leaving a negative overdraft/balance where it is and planning a way to eliminate it (small monthly reductions to £0 or other lending means).
If people do CASS in the future and have an overdraft then it’ll be a big consideration for them I would have thought.
Barclays, Santander, TSB if under 12 days, Lloyd’s & Halifax if over £350…
For a non-apr based overdraft, it’s competitive.
Why does it often boil down to “If you don’t like it take a hike?”
It doesn’t, Monzo will see take user’s feedback on board, as well as checking whether people / how people are using the overdrafts & adjust the pricing in response.
Not at all (I wouldn’t even say my wording is referring to anything like that). I’m saying users don’t have to take up the overdraft if the don’t want to.
Listening and reading the thoughts and aspirations of the CEO for Monzo it appears to me that he wants to empower people to take control of their financial lives. He wants Monzo to help, obviously whilst staying afloat but not gouging people.
Whilst the sorts of people who are desperate enough to pay 1000% + APR to pay day loan operators may never have heard of Monzo, it would IMHO be in keeping with the stated aims of Monzo be much better to charge on a % basis. The technology surely exists to calculate a likely charge if previous behaviour and spending is maintained.
There’s a danger that this discussion’s going to go around in circles here. You’re not the only person who thinks this so can I suggest that you reply to user’s who’ve responded to that idea (there’s a few posts that mention percentages towards the beginning of the discussion) & explained why it might not be the best approach, rather than simply repeating the suggestion again? If you want to show your support for an idea, you can just like the post which makes it easier for the team to see how many people think it’s helpful.
I’m not having a go & I know it’s a long thread to read, I’m just keen to avoid users with different viewpoints repeating the same ideas again here.
It does seem that you in particular seem obsessed with a neat and tidy forum. I will curtail my discussion on this subject.