Overdraft and paying large interest every month, what should I do?

yellow_bear

I have an overdraft of £1500 on my hsbc account and am being charged with about £25 every month interest and nothing coming off the balance! I'm paying it off at about £15 a month so it's just getting bigger and bigger!

I'm confused as to what to do about it, it was a graduate account but it doesn't seem to be anymore and i'm not sure how I didn't notice that change! (mind I am not the most understanding of bank letters, I get confused and so leave the letter to read later, really stupid but my dyslexia really makes it hard to understand all this bank stuff!).

Does any body have any idea what I can do?
I Graduated July 2006 so i'm in my third year since graduation.

I have today done a balance transfer to a long term low interest credit card from another credit card I had and I thought I could transfer an overdraft to this one too, didn't realise I couldn't!

I'm in a right muddle, stressed, worried and confused,
not even sure i've posted this message in the right section,
can anybody help?
Thanks!
Claire

ShelfStacker_3

Get the Virgin Money 0% card. This WILL let you BT from the overdraft.

YorkshireBoy

If the OP can only afford to pay £15 per month off the overdraft, where is the £25 per month Virgin minimum payment going to come from?

The answer, I'm afraid, is to earn more and/or spend less...and budget.

CLAPTON

you need to understand the details fo your financail position and to learn to budget

try this
http://www.makesenseofcards.com/soacalc.html

and post up the result.

if dyslexia is a serious problem that affects your ability to deal with financial issues then you need to develop coping strategies...
use cash and don't use CC or loans or overdrafts, get help from trusted family members...

pinkpig08

Hi,
We are transferring our bank account to Alliance and Leicester. The overdraft rate is 0% for 12 months, then 50p per day up to a maximum of £5 per month after that. It'll give you a good chance to clear the overdraft, but will then also reduce your interest payments on any amount you haven't cleared.

opinions4u

Claire, this is the way the world works. Borrow money = pay it back with interest.

Why are you only paying £15 a month? Is it that you don't work?

What is your overdraft limit? If you are paying less capital off than interest is charged then sooner or later you will exceed your limit and get clobbered for some very nasty charges.

You are right to be concerned about the situation, but you need to take control of it rather than worry about it.

1) Can you pay more off each month in order to start bringing down the debt?

2) Can you spend less each month and use the savings to bring down the debt further?

If you can answer yes to both these options, then do them!

If you are working in a relatively secure job, and believe that you can genuinely manage your finances better, then it may be worth looking at the credit card / switching current account options.

If there is any hint of risk that you will just build up more debt on cards / alternative accounts don't touch them with a bargepole until you can trust yourself.

For me, manage your finances better for 6 months, get the debt down a little on your overdraft and then review your options. If your family give you cash for Christmas, consider reducing your debt with it rather than a trip to Selfridges sales!