Getting rid of big overdraft

heppy23

I've got a £4000 overdraft on my halifax current account.

It's my main account where my wages go in and all my standing orders and direct debits come out of.

The overdraft runs out next April.

What I had hoped to do was reduce it by £500 every couple of months but Halifax don't want to offer me more than a £1200 overdraft at the moment.

On my online banking I can see what overdraft they would give me - up until recently it was £3500 and it dropped to £1200.

I went into my local branch and they said that £1200 was all they could offer me and to keep an eye on the figure on the online banking in case it goes back up.

They suggested opening another current account to transfer money for daily spends which I did but I am now thinking of transferring money for daily spends to my egg money card now that faster payments is working from halifax to egg.

I can put by about £300 per month towards the overdraft. Logic would say leave it in the overdraft account so I incur less interest but I think I would be better off putting into a savings account where I won't touch it.

I want to try and build up a lump sum to pay into the account a month before the overdraft runs out.

Other idea is to move all banking out of the account and just pay in a fixed amount per week to bring it down. Downside of that is that I would pay more interest (as by crediting £1000 per month the OD is cheaper) and also I suspect Halifax would be less likely to offer a smaller OD if the account appears semi dormant.

Any thoughts?

whatatwit

Why not keep reducing your overdraft now.
When it is up for review, will you have the funds available to get it down to the new figure of £1200?

Also, how much of it do you use now.

I think that by showing willing and reducing it voluntarily, they might reconsider the limit at the review.

GeorgeUK

Can you transfer any of it to a 0% creditcard - the "super balance transfer" type?

heppy23

whatatwit wrote: »

Why not keep reducing your overdraft now.
When it is up for review, will you have the funds available to get it down to the new figure of £1200?

Also, how much of it do you use now.

I think that by showing willing and reducing it voluntarily, they might reconsider the limit at the review.

I am £3700 overdrawn at the moment so in theory if I had £2500 to pay in I could reduce limit and everyone would be happy for a year!

It's up for review in April. I reckon it will be at £2500 by then which leaves a shortfall.

Makes sense about being seen to reduce it, if I keep paying money in then hopefully they might offer a new OD bigger than £1200 in the meantime.

heppy23

GeorgeUK wrote: »

Can you transfer any of it to a 0% creditcard - the "super balance transfer" type?

Am thinking about that but want to leave that for a few months as I have credit card debt too.

whatatwit

So, does your account ever get into credit? That was one of the reasons my bank used for dropping my OD.

Have you done yourself an SOA, to see where the money goes and how much you should have as a surplus?

Also, if like me, the money vanishes, then try keeping a spending diary.

heppy23

I am thinking about it but I've only just paid off a mint card so i want to have a "rest" for a couple of months before I apply for a new card.

American_Dreamer_2

The correct thing to do IMHO is the super balance transfer.

GeorgeUK

Here's a list of cards that do a super balance transfer.
http://www.stoozing.com/sbt.php

You'll also need to be careful that the card issuer is not the same as you can't transfer to another card if the issuer is the same.
http://www.stoozing.com/cards.htm

You can have about 3 credit checks in a 6 month period before your credit score is affected, so this should be the deciding factor as to whether you try for another credit card or not. Also with the mint card, don't close the account as you may be offered a deal as an existing customer - 0% APR for 6 months or low interest life of balance. This may be of use when you try to shift some of your credit card debt as there is usually not a credit check as an existing customer so you won't need to worry about that aspect of it.

jimpix12

OP< the Halifax's automated overdraft calculator is ridiculous. I have a £2000 overdraft now, and whenever I sign in to increase it on their website, it says they can offer me only £1200 at this time. I was ideally after £2500 for those "just in case" moments.

So anyway I signed in today and it says I'm allowed... wait for it... £9,500 overdraft.

:-S

I want to take £2500 to maybe £3000, not £9,500. Is there a downside to having unused overdraft? I will not every (hopefully!!) max it out, but seeing as we're in rough economic times and I *could* lose my job, who knows? Any advice appreciated.

mr_pickles_2

spunko2010 wrote: »

Is there a downside to having unused overdraft?

I used to have a £50.00 OD with Lloyds TSB and they took it away from me as I had not used it in 18months. I said that as it was a free OD, it did not cost me or them any money, but they said that they want to see me using it!