£5000 overdraft

fozmcfc
fozmcfc Posts: 3,098 Forumite
First Anniversary Combo Breaker PPI Party Pooper Debt-free and Proud!
in Budgeting & bank accounts
Currently my OD with Natwest stands at £5000, in the past 5 or 6 years, I have been into my overdraft by £7 once in January 2009.

I'm thinking the OD amount is ridiculously high considering the above and the fact that I earn about £1900 a month on average.

I guess what I'm really asking is 1/ Is it really high considering my earnings and 2/ should I ask them to reduce it, or is there no real harm in having an OD of this amount.

Thanks

Comments

  • vaporate
    vaporate Posts: 1,955 Forumite
    Just my opinion:

    Reduce it. Why?

    1. less risk of losing large amounts of money to fraud
    2. Less likely to be tempted to get into a spiral of debt.
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  • Bloomberg
    Bloomberg Posts: 665 Forumite
    fozmcfc wrote: »
    Currently my OD with Natwest stands at £5000, in the past 5 or 6 years, I have been into my overdraft by £7 once in January 2009.

    I'm thinking the OD amount is ridiculously high considering the above and the fact that I earn about £1900 a month on average.

    I guess what I'm really asking is 1/ Is it really high considering my earnings and 2/ should I ask them to reduce it, or is there no real harm in having an OD of this amount.

    Thanks

    Considering your monthly income this does seem like a very generous overdraft limit. Like Vaporate says if ever your card was cloned a fraudster would have access to all that extra cash. From what you say a £200 limit would suffice.
    Money is a wise mans religion
  • mclaren32
    mclaren32 Posts: 283 Forumite
    First Post First Anniversary
    fozmcfc wrote: »
    Currently my OD with Natwest stands at £5000, in the past 5 or 6 years, I have been into my overdraft by £7 once in January 2009.

    I'm thinking the OD amount is ridiculously high considering the above and the fact that I earn about £1900 a month on average.

    I guess what I'm really asking is 1/ Is it really high considering my earnings and 2/ should I ask them to reduce it, or is there no real harm in having an OD of this amount.

    Thanks

    You are in a similar position to myself and I like the security of having access to funds at the drop of a hat even though I never go over the interest free part of my o/d, £250.

    If you are sensible with money and monitor your account on a regular basis I see no problem with having a large facility available.
  • simax
    simax Posts: 1,957 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    Also, remember, you cannot just lower an existing limit. They'd cancel your current O/D and would re-credit check you for the new proposed amount.

    If your credit rating has changed, you may find you lose the facility altogether..... just a thought....
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  • kaisersoze_2
    kaisersoze_2 Posts: 307 Forumite
    simax wrote: »
    Also, remember, you cannot just lower an existing limit. They'd cancel your current O/D and would re-credit check you for the new proposed amount.

    If your credit rating has changed, you may find you lose the facility altogether..... just a thought....

    Is this a Natwest thing? I have reduced an overdraft with Halifax online, so long as the account is in credit i can reduce it to whatever i like instantly.

    Why would they credit check you to reduce an overdraft?
  • iereboy
    iereboy Posts: 415 Forumite
    Yeah is that a natwest thing?

    With Lloyds I can reduce my overdraft anytime I like and no credit check is involved at all!
  • stclair
    stclair Posts: 6,844 Forumite
    Name Dropper First Anniversary First Post
    simax wrote: »
    Also, remember, you cannot just lower an existing limit. They'd cancel your current O/D and would re-credit check you for the new proposed amount.

    If your credit rating has changed, you may find you lose the facility altogether..... just a thought....

    I totally agree so you need to be sure your equifax and experian credit reports are okay before making any decisions OP.
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  • fozmcfc
    fozmcfc Posts: 3,098 Forumite
    First Anniversary Combo Breaker PPI Party Pooper Debt-free and Proud!
    Thanks for the advice.

    My credit status is at least good, as I've been able to get 3 0% credit cards over the past 12 months.

    My credit reports show everything to be paid/clear/up to date etc...etc...

    Up until January 2009, I was bad with money, even though I never failed to pay the required minimum at least to all my debts, I still had no savings, but decided enough is enough and to sort myself out.

    Had a great year of saving and shifting debt around to cheaper debt. As per my signature I will clear the 2 credit card balances I have and one of my loans by September.

    Not wishing to tempt fate, but unless I lose my job, I don't foresee myself ever using the O/D and even then, I wouldn't want to go anywhere near £5000.
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