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NatWest Student Account

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Hi, I have a NatWest student account and have just graduated so today I went to ask to increase my overdraft to £2000 but they said I had low account activity so it was declined but they have referr… Read More
brillangel Avatar
8y, 9m agoPosted 8 years, 9 months ago
Hi,
I have a NatWest student account and have just graduated so today I went to ask to increase my overdraft to £2000 but they said I had low account activity so it was declined but they have referred it for me. So I have to wait and see what happens but when I rung up yesterday to their customer service team they asked if I wanted to get the NatWest credit card and I said yes and they will send the details in the post. So really the question is if they reject my overdraft request would that affect my credit rating and the chances of me getting the credit card, and if I was rejected for the credit card would that affect credit rating?

Thanks for the help in advance!
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brillangel Avatar
8y, 9m agoPosted 8 years, 9 months ago
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1 Like #1
Generally having a credit card and using it sensibly. ie. never missing a payment, is actually good for your credit rating. What would not do your credit rating any good is applying for a larger overdraft and a credit card all at the same time. It appears you are trying to obtain alot of credit in a short space of time.

Good luck!
#2
bankofmumndad
Generally having a credit card and using it sensibly. ie. never missing a payment, is actually good for your credit rating. What would not do your credit rating any good is applying for a larger overdraft and a credit card all at the same time. It appears you are trying to obtain alot of credit in a short space of time.

Good luck!


Oh I see I wondered why the woman offered me the credit card while knowing I wanted to get an overdraft. So really it would be sensible to put off getting the credit card at the moment! I only wanted the credit card to protect myself when purchasing online!

Thanks for the reply!
1 Like #3
The way it works is this:-

The bank does not like overdraft and prefers credit card. The reason is that for a £2000 loan on the overdraft they make much more money using the credit card system, for essentially the same commercial risk for you as individual (i.e. same credit rating).

For the overdraft , if approved , they make say 12% APR. For the credit card they make 3%+ on the sales transaction + say, 20% APR on the outstanding balance + one month or so of the sales transaction amount as interest.

So when you are a banker you want the credit card rating system to push the borrower to more expensive schemes as the person's risk rating is effectively the same.

And the "low account activity" means that the Bank believes that you are a loss making customer and they need to pay expenses and make some income for their shareholders. The more financial activities there are the more money that they make, as every activity leads to some income for the bank. Similarly the financial people always create and force activity in the stock markets, the more buying and selling , the more stock market activities there are the more money that they can earn as every time money changes hand a x% is earned, so for, say £1 of hard earned money, every time, say, they make 0.5p which is tiny, but if the activity is 100 times , half of your money is gone.
#4
If at all possible don't apply for the card. However if you do, the best advice is to always pay at least the minimum payment on time but clear in full if at all possible. Credit cards are the loved by Banks, they throw them at you for one reason only......... They know we find it hard to control ourselves, hence they make an absolute fortune!!!!!!
#5
splender
The way it works is this:-

The bank does not like overdraft and prefers credit card. The reason is that for a £2000 loan on the overdraft they make much more money using the credit card system, for essentially the same commercial risk for you as individual (i.e. same credit rating).

For the overdraft , if approved , they make say 12% APR. For the credit card they make 3%+ on the sales transaction + say, 20% APR on the outstanding balance + one month or so of the sales transaction amount as interest.

So when you are a banker you want the credit card rating system to push the borrower to more expensive schemes as the person's risk rating is effectively the same.

And the "low account activity" means that the Bank believes that you are a loss making customer and they need to pay expenses and make some income for their shareholders. The more financial activities there are the more money that they make, as every activity leads to some income for the bank. Similarly the financial people always create and force activity in the stock markets, the more buying and selling , the more stock market activities there are the more money that they can earn as every time money changes hand a x% is earned, so for, say £1 of hard earned money, every time, say, they make 0.5p which is tiny, but if the activity is 100 times , half of your money is gone.


yeah thats true because with my account the overdraft is interest free until 3 years time. also the account has had activity but it would have only been to withdraw money :oops: guess they are not best please about that. so if they do decline the overdraft request would that mean it would affect my credit rating?
#6
bankofmumndad
If at all possible don't apply for the card. However if you do, the best advice is to always pay at least the minimum payment on time but clear in full if at all possible. Credit cards are the loved by Banks, they throw them at you for one reason only......... They know we find it hard to control ourselves, hence they make an absolute fortune!!!!!!


I totally agree with you thats why I never set out to get one until they asked me and I couldn't say no and thought it may boost my credit rating. But they said I get one month to decide and send the form back I guess I will just not send it back just in case I can't control myself :giggle:
#7
Finally, overdraft is an old banking product, like all old banking products the more modern innovative products are higher value add and make more money for the bank. In supermarket jargon the old products are like raw meat and new products like credit card are like the ready meals. The profit margin on the ready meal, of course, is much more, but it is far more convenient. Credit card is far superior in portability and ease of use. Cash from an overdraft is easy to use too but carries the risk of walking about with it.

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