here's my idea...any thoughts?

daveskey69

I bank with HSBC and every month, I am pretty much up to my iverdraft limit or over it, thus incurring heavy charges. I was thinking of setting up a new bank account and having everything paid into that, meaning monthly wages, and all my benfits and tax credits.
This would then start me off on a clean slate, but I would still have the hsbc overdraft.
Does anyone know if hsbc operate a minimum monthly deposit policy?
and could i offer to pay back the overdraft a little at a time?
and should i tell HSBC this is what I want to do.?
They have said they won't increse my overdraft or give me a loan, so they are of no help to me at the moment.
any thoughts?
Cheers
DAVE

JoKay_2

Hi Daveskey, not sure if this answers your question, but we were in a similar position a couple of months ago, though we weren't at our limit and didn't incur charges.

We opened another account (with the same bank) for our spending money to be transferred into, leaving the remainder in the overdraft account to pay our bills and, with the excess, pay off the overdraft month by month.

We've found that by separating our spending money - groceries, petrol, entertainment and general spends - and putting it into an account that doesn't have an overdraft, it has helped us focus on actually keeping to a budget - we spent just under £20 less than we'd budgetted, and paid just over £300 off the overdraft. :j

Just an idea, appreciate it might not work for everybody, but has worked for us!

Good luck!!

daveskey69

thanks for the reply. I am thinking of just having everything that goes into my hsbc account to go into another account. Thus rendering my HSBC account inactive, but with a big overdraft still.
I would then offer to pay back the overdraft at an amount I can afford. But I suspect HSBC would say they need to see a minimu amount goin in each month. This is what I need to find out.
And I want to know if people think I should tell HSBC this is what I intend to do.
cheers

lilian1977

I think the best bet is to do what JoKay does - HSBC will still see the money going in and then you can transfer everything back out minus the money you're paying off the overdraft.

cady

seperating you spending money and debt money is a good idea - if you think you can manage that and pay a little into your OD to pay it off every month, i would set it all up then after everything is out of that account then tell HSBC - just incase they demad the whole lot back or cancel it but i would do it in writing and tell them you have done it due to financial issues ect as speaking to someone on the phone or in branch might not help.

Cady x

daveskey69

so, to clarify, I could either have it all paid in to HSBC and then just transfer it out somewhere else (do they not care how long it stays in the account as long it goes in?) or i could have it all paid in to a new account and still pay some into the account to clear the overdraft, eventually. would they set a limit on this, or would it be what I felt i could afford.
thanks so much for any help.

angelpye

Hi I am not with HSBC but just wanted to say that in the terms to my account I have to use it for my main income - I dont know if this is standard. When I had similar trouble I just spoke to the bank and set up an arrangement that suited us both for the overdraft to be reduced by each month. I now don't notice it and don't go over the limit. Hope that helps.
But I have to add that you need to figure out why you go over each month - have you done a budget using the planner on here. It really helps to see where that overspending goes.

whatatwit

If you want a separate account to manage an overdraft better, then don't do it with the same bank.

You might find that one day, they will remove or reduce your O/D (usually when you've just been paid).

Personally, I would go with your first option and calculate how much you could afford to pay into HSBC each month to clear the O/D.

If you are struggling, then why not post a SOA and see what advice is given as to where you could save a few pounds.

There is a link in Southernscousers post at the top of the board.

daveskey69

but how can i reduce it each month, if i still find myself needing it all the time.?

JoKay_2

My thoughts are that as long as have money going into the account every month, and you're reducing the ovedraft a little at a time, it doesn't matter how long you leave the money in there for.

I'm not sure I'd even tell them what I was planning to do, as it seems that banks are calling in overdrafts quite a lot these days - what would you do if they removed the facility with little notice?

Are you thinking of taking all the money out and paying your bills out of the new account? I would personally caution against this, as it might be possible that you end up in the same position again - not saying you will, but its a possibiity.

I really do think that keeping your spending money separate from bills & debt is invaluable - if you'd like to see my spreadsheet that shows how we're reducing our overdraft, pm me.

daveskey69

okay, so the bank won't mind how long my money stays in the account as long as it goes in there to begin with each month.
I am sure they can't decide where and when i move my money to.
am i right?