Does your bank have your interest?
Self-employed people love their overdrafts. We kind of see it as target to keep under. “I’m good this week, I’m under the 25.” K that is. In the red. Until you experience the horror of having your referral fees, unauthorized overdraft interest and common or garden overdraft interest added up right in front of you. Oh my God. But I am telling you, that young fella did me a favour. He was new in his job as my account manager, the 6th I had in as many months since my steady manager of 6 years left. From the bank’s point of view, he was way off target. We had been running at a steady 25,000 OD for about two years, having stabilised our business somewhat, using the negative 25,000, as i say, a target. This gave our bank a steady revenue of interest and fees, and no need to harass us because even though we were in overdraft, we were maintaining an even keel.
Enter (thank God) young fella. Delighted to be given his first business account, he called us in for a get to know you chat. He pulled up our file, showed us the chart and sang like a canary about how much uneccessary revenue we were giving his bank. Within the hour, he had organised our overdraft into a much lower interest term loan, killing the bank’s cash cow. So now instead of the -25,000 target, we had an easier one. ZERO. I cannot remember young fella’s name, as he was despatched with speed, i assume for having the customer’s best interest at heart, and not in the bank.
My point is, we got lucky. Years on, I would never be in that position, as I look at my profit and loss every week, and there plain as day are my figures - how much in referral fees, term loan interest, ordinary bank charges, overdraft interest, and the killer, unauthorized overdraft interest. Don’t leave it to chance. Know your figures, bring them to the bank and discuss how to reduce them.
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