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Expensive account overdraft: down with the overdraft facility, out of the overdraft facility

2022-11-05T13:36:38.594Z


Overdrawing your account costs money, and yet more and more people are doing it: in 2021, the number of bank customers in the overdraft facility increased by 17 percent – ​​to 6.6 million. How to avoid or get out of expensive interest rates: a guide.


Enlarge image

Withdraw money from ATMs: over large parts of the past decade, overdraft interest rates have been much higher in this country than in Austria, for example

Photo: Angelika Warmuth / dpa

It's getting tight financially for a lot of people right now.

The first noticeable sign: Towards the end of the month you keep slipping into the overdraft facility.

High energy bills are likely to push this further in the coming months.

The dispo is practical as long as it is only used on a daily basis.

Otherwise it will quickly become expensive.

And now, of all times, it has become even more expensive.

Many customers are worse off and banks are better off.

But expensive overdraft interest can be avoided.

For eight years there was silence on the dispo front.

The majority of banks made good money from the overdraft facility, the margins, i.e. the difference between the interest rates that the banks pay their customers for call money and fixed-term deposits and the interest that they charge their customers in the overdraft facility, had risen to ten percent after the financial crisis .

And they stayed there for a long time.

An attempt by consumer protection groups to prescribe maximum margins came to nothing in 2014.

The only result: Since 2016, the banks have had to offer an assistance talk to customers who have been stuck in the overdraft facility for more than half a year (§504a BGB).


However, a survey of seven major banks, savings banks and Volksbanks this week revealed that there is not the slightest idea whether and with what success such consultations take place - no figures.

Incidentally, neither did the Bafin financial supervisory authority, which was also surveyed.

One wonders what this legal requirement actually achieves.

The matter is annoying in any case, because the interest rates in this country have been much higher for large parts of the past decade than in Austria, for example.

Increasing Numbers

Now interest rates are rising drastically, as is overdraft interest.

Therefore, the debate is coming back as to whether the level is still appropriate.

Rightly so.

In 2021 alone, the number of bank customers in the overdraft facility increased by 17 percent – ​​to 6.6 million.

And it keeps rising fast.

And once again, a number of credit institutions are allowing the interest rates for the overdraft facility to rise faster than those for the savings account.

While customers are worried about their financial future, Deutsche Bank, for example, is celebrating the best quarterly result in a decade.

She has increased the overdraft facility for her millions of customers from an already unabashed 10.9 to 11.7 percent.

She is not alone in this.

Postbank, as a subsidiary of Deutsche Bank, also increased by one and three quarters of a percent to 11 percent.

Competitor Commerzbank goes from 9.75 percent to eleven percent, the online subsidiary Comdirect from 6.5 to 7.75 percent.

And the actually cheap online bank DKB, a subsidiary of Bayerische Landesbank, will charge its customers 9.9 percent in the future, two and a half percent more than in the spring.

Volksbanks and savings banks are also increasing occasionally, depending on the institution, they have the cheapest, but also the highest interest rates.

According to surveys by the financial portal Biallo, the Volks- und Raiffeisenbank in the Bavarian town of Landsberg-Ammersee demands a peak of 14.3 percent.

Politically, this is even registered at the other end of the republic: In fact, in a quite unusual step, the black-green state government in Schleswig-Holstein, together with the SPD and the SSW, have decided to introduce a "statutory regulation nationwide to limit interest on overdraft facilities ... to Basis of a reference interest rate« on the way.

The networking of consumer politicians has apparently improved in the meantime.

All state consumer ministries had already requested something similar in 2021.

If you were to use the new ECB key interest rate of two percent as a reference interest rate that is transparent for every customer and allow a five percent surcharge, the overdraft facility should not exceed seven percent according to such logic.

In the banking industry itself, the 3-month Euribor is often used for such reference interest rates.

This is the very similar rate at which banks lend money to each other.

What you can do

Waiting for political decisions, especially when it comes to dispo, has not proven itself (see 2014).

As a customer, you should therefore first go a different way.

Of course, the best way in times like these is to avoid the overdraft facility entirely by stepping on the brakes on spending: Get back about a hundred from the car insurance for 2022 and save another hundred for the coming year, for example.

Or delay purchases until the account is balanced again.

Compare prices properly and use price search engines when shopping for Christmas presents.

Or borrow money from friends and family before going to the overdraft facility.

Of course, that's always a bit tricky.

It therefore makes sense to always write a small letter so that everyone knows what has been agreed.

If you are already knee-deep in planning, you need a two-part strategy:

  • Part 1:

    Reduce spending and increase income enough to stay out of the debt loop.

  • Part 2:

    Significantly reduce the costs for the overdraft facility.

Only if you have used more than 75 percent of your overdraft facility continuously for six months does the bank have to advise you and make you a better offer in a personal meeting.

With 3000 euros net and three monthly salaries, you would then have almost 7000 euros in the overdraft facility and would pay 700 euros or more in interest over the year.

The easiest way would then be to switch to another bank with a lower interest rate, if you only had to pay seven percent instead of ten percent, the interest burden drops to 490 euros.

But this is not so easy.

First of all, the old bank is not obliged to inform you about better offers from the competition, even in such a consultation.

In addition, the other bank may not grant you an overdraft facility of 7,000 euros.

If your exercise in Part 1 has shown that you can repay some of the overdraft facility every month, then you should switch to a so-called framework loan or an installment loan.

The credit line is offered, for example, by Volkswagen Bank or ING.

The interest rates for such credit lines are significantly cheaper, at Volkswagen in the first year under three percent and then 6.65 percent, at ING almost six percent.

The burden for the 7000 euros in the overdraft facility falls to 210 euros.

You can also take out an installment loan instead of a credit line.

There are often still less than five percent interest per year.

But beware: You must then be able to pay the agreed installments month after month, because it does not make sense to use an installment loan with five percent interest on the one hand and then immediately get back into the overdraft facility to pay off the installments.

Before seriously looking for the right and cheap installment loan, you should definitely get your Schufa in shape first and only then start comparing the loan offers.

Because only with an error-free, good and clean Schufa scoring you get the cheapest loan that is possible.

And that makes it a lot easier to crawl out of the mud again.

Source: spiegel

All business articles on 2022-11-05

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