A & L 0% overdraft question?

cheghead

I have just opened up a new A&L premier account (to get the £100 free deal). There is a 12 month interest free overdraft. (I have never used my overdraft on my previous bank account).

Would it be OK to transfer all of the A&L overdraft limit in to a savings account and then pay the ammount back before the 0% period ends? Being permenantly in the red for a year would this affect my credit rating or is there any other reason NOT to do this?:huh:

exel1966

Yes you do can exactly that.

Your overdraft can be seen by other financial companies who look at your credit report, but providing you don't have credit problems elsewhere or an unusually high amount of credit elsewhere it generally isn't a major issue.

Do it !

YorkshireBoy

cheghead wrote: »

Would it be OK to transfer all of the A&L overdraft limit in to a savings account and then pay the ammount back before the 0% period ends?

Perfectly OK.

Because they only charge 50p/day (max £5 per month) from the second year onwards, it's also possible to make money on an ongoing basis *if* your overdraft facility is large enough*. The cost will be £60/year so providing you can earn this net of tax elsewhere then continue to stooz the overdraft.

Being permenantly in the red for a year would this affect my credit rating or is there any other reason NOT to do this?:huh:

Your credit file will show the debt, but if your circumstances are otherwise good (ie reasonable salary) then it shouldn't be too much of a problem.


* Halifax have just offered me a £10K overdraft facility so I'm about to try and get A&L to match this on my existing account (if not I'll close and re-apply). Should make me around £450-500 a year.

cheghead

Only got less than £500 on credit card (0% of course) so think I'll try and bump up the overdraft limit from A&L to get the most I can.

Thanks for replies:money:

exel1966

YorkshireBoy wrote: »

* Halifax have just offered me a £10K overdraft facility so I'm about to try and get A&L to match this on my existing account (if not I'll close and re-apply). Should make me around £450-500 a year.

Good luck, that's a nice little stooz. My OH has an available O/D with Halifax of £13.5K and I've been trying to persuade her to try A&L for a match but it's like :wall: !!!

Chris_N_3

How have people got on so far with getting A&L to match existing overdraft limits? I am hoping they will match the £2000 limit on my Natwest graduate account (which is no longer interest free). I hardly ever use the facility with Natwest, but am hoping to use it to pay in money to my new Co-op Bank account to get the £100 of them too, then might do a bit of stoozing.

vbrindle

YorkshireBoy wrote: »

Your credit file will show the debt, but if your circumstances are otherwise good (ie reasonable salary) then it shouldn't be too much of a problem.

I'm confused. My current account doesn't show on my credit file. Is it because I've had it so long?

YorkshireBoy

vbrindle wrote: »

I'm confused. My current account doesn't show on my credit file. Is it because I've had it so long?

Possibly. My 28 year-old current account doesn't show either. I think the cut-off was 1998 (coinciding with the DPA revamp), although some people have reported accounts opened after this date still do not show.

It's a strange setup though, because I have a £250 overdraft facility with FD yet they've told both Experian and Equifax I don't have an overdraft facility because they've reported it at £0.

Grade_A_Reject

Glad I found this thread as I was about to start a new one along a similar vein. I've just switched my current account to First Direct (£100 thank you very much). This leaves me with a zero balance on my A&L account and a £3000 available overdraft. So, do I close the account or stooze the £3000 overdraft given that it will only cost me £60 a year to do so.

I recall some clause in the A&L current account conditions about £500 a month having to be paid into the account. My salary is now going into the FD account.

How long could I get away with keeping the A&L account at £3k overdrawn and would I need to cycle £500 through it each month to keep the o/d facility or would they withdraw it at some point anyway once they noticed my salary isn't going in there anymore?

YorkshireBoy

You should be able to make around £150 net of basic rate tax per year from stoozing the £3K, giving a net return of £90.

Then again, if you closed the account and re-applied again in 3 months you'd get all the benefits again, including 8.5% AER (if you wanted it) and another £50 from Quidco et al. If the £100 switching offer was still on, that's the icing on the cake because you'd be £60 up...plus they'd waive the £5 per month charge for using the overdraft in the first year again if you went that way rather than using it for the 8.5% AER.

The £500 can come from anywhere, and is necessary to avoid the £5 per month underfunding fee. Although it's not a pre-requisite for the overdraft facility, a lack of funding may trigger a review/removal on demand of said facility.

vbrindle

Could you not transfer £500 from the other account every month?

I've been wondering myself as I have a current with an overdraft and wondering if it's worth opening the A & L one but because I'm worried I won't get the same o/d amount I could become stuck.

So I'm thinking that maybe I could transfer £500 or more to the A&L one from my current one.

Has anyone else done this?

*edit* Looks like Yorkshireboy answered my question as I was typing it