Switching current account while still in red on overdraft?

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Emma45622
Emma45622 Posts: 18 Forumite
in Budgeting & bank accounts
Hi all,

I hope this is in the right place.
I've have been thinking of switching our current account for a while now and using the cash back offer towards paying off our debt.
The issue I have is we still go into our overdraft every month (it is a slow process reducing it down until we no longer need to use it) so I am wondering if there is a sensible way to switch or if I need to wait until we have paid down our overdraft?

Thanks in advance.

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  • meer53
    meer53 Posts: 10,217 Forumite
    First Post First Anniversary Combo Breaker
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    Either switch once you no longer use the overdraft or make sure the new account has an overdraft facility before you switch. Overdrafts are not guaranteed when making a new application.
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Name Dropper First Post First Anniversary
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    Don't switch this current account. Switch another one you're not using the overdraft facility on.

    If you haven't got one, get one.

    Sometimes you have to think outside the box.
  • Emma45622
    Emma45622 Posts: 18 Forumite
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    Excellent idea YorkshireBoy thank you. I've got an old Barclays account I don't use anymore I could switch.
  • badger09
    badger09 Posts: 11,206 Forumite
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    Emma45622 wrote: »
    Excellent idea YorkshireBoy thank you. I've got an old Barclays account I don't use anymore I could switch.

    Most switch incentives specify that the account being switched must have a number of direct debits. Just make sure that your old Barclays account has the necessary DDs set up. Probably safest to wait until they have actually paid out before starting the switch.

    As always, check the T&Cs carefully;)
  • Emma45622
    Emma45622 Posts: 18 Forumite
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    Thanks badger09 will do!
  • pinkdalek
    pinkdalek Posts: 1,355 Forumite
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    If the bank you are switching to can offer you the same overdraft or even more you can switch and they can clear the overdraft for you if the account will be overdrawn when you switch. They debit your account to take you overdrawn with them to clear what you owe with the old bank (make sure you include any outstanding charges when asking the bank to send the amount)

    Also make sure the overdraft charges on the new account are not worse than the existing as in long term it could take longer to clear off the overdraft.

    Don't forget some offer switching incentives so you could use this to pay off the debt.

    If you switch and the account on the old bank is still in debt they will continue to chase you for the funds and also could hold back any credits paid to the old account eg salary.
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