Overdraft reduced ?

[oncemoreuntothebeachdearfriends]

I caught sight of an e-mail to DH from his bank telling him they were reducing his OD limit from £1,000 "to help him ..." & I didn't see any more.
What does this really mean ? Has he been using it very heavily?
We don't share finances

It might not be. My bank has just cancelled my overdraft from next month, I use it every month and it’s the only way they make money from me. I never go over the limit but I’m self employed and money comes in sporadically over the month. There’s no reason for them to have cancelled mine but they said they were doing that with all small overdraft facilities.

seems mad to me, it’s literally the only way they make money from me

A bank can take OD away at anytime, it's usually done if he uses it regularly up to his limit.

I had similar. NatWest emailed me and said they would be reducing my overdraft (I regularly go into it). I was given a date this would happen. Then I had another email saying they saw I needed it, so the reduction was cancelled.

I had mine reduced from £1000 to £500 a few years ago. I very rarely go into it so I didn’t really take it to mean anything other than a standard reviews of accounts etc.

I've had mine reduced because I wasn't using it. I don't think you can read anything into it.

Mine has just been reduced from £5k to £1k simply because I haven't used it in over ten years and therefore have no record of being able to pay it back - hence the reduction in the banks risk (according to the letter I got).

They have to account for the liability in their balance sheet so it might be for that reason.

But banks also make money from lending against money in your current and savings accounts and from transaction fees on card payments.

However a credit card is a far better way of managing cash flow as done right it's free or even profitable and banks, unlike MN see credit card use as responsible financial management while overdrafts are bad.

Could well be back doing their housekeeping.

I had mine removed as I never used it and when I spoke to them about it they said they would just need a phone call to put it back, something about reducing the risk of someone emptying the entire account.That was about 15 years ago.

My Mum had hers cancelled as she was always at her absolute maximum limit and never reduced that. They removed it to force to her negotiate her paying back the money she owed the bank. Harsh but I could see why they did it.

I agree with @Bjorkdidit that a credit card is probably a better way to manage money but that comes with a warning about spending what you don't have. We have a points reward card and use it for everything we can but it is paid in full automatically every month.

Interesting that the bank has just cancelled the overdraft!