When did it become normal to have an overdraft

Dave101t

im 26 and would never consider an overdraft. it gives banks the power to screw with your finances if they want to, like direct debits give utilities the ability to change payments.
keep well away and just use a credit card if you have to

melancholly

i still have a graduate interest free overdraft, which i am slowly paying off... but since i pay no interest, i'm making sure i will have it down to zero when the interest will be payable, but in the meantime putting some money into savings instead of paying it all off. anyone who thinks students at uni since fees started shouldn't need an overdraft is naive and unfair (just look at the mess the SLC has made of payments this year as an example of how an overdraft can be vital).

that said, the change in accepting debt in the last 30 years isn't all down to university and the attitude isn't only present in people being charged in the last 10 years to go there (or indeed only in those who went to uni). that's a bit more difficult to explain!

opinions4u

I do think that there's a big difference between student related overdraft debt and those in paid employment who utilise overdrafts as an alternative to good budgeting (e.g. "I'm always overdrawn and it never comes down" or "My overdraft is going up every month").

The bracketed examples, unchecked, have the potential to end up in severe financial difficulties.

Person_one

I have an unused overdraft as a backup. Its a hangover from university, I paid it all off when I started working but never actually had the facility removed.

I absolutely needed it while at uni, like many of the people I knew I was from an upper working/lower middle class family whose parents made just above the threshold for a lot of the help available but certainly not enough to fully support me studying in London! I worked part time but the overdraft was essential towards the end of each term before the next loan installment was paid in.

My partner's student overdraft is still interest free so he took it all and put it in ISA where unfortunately it isn't earning a great deal of interest at the moment but I can see the logic in that decision. He was concerned that the fact that he had technically been at the limit of his overdraft for years would affect us getting a mortgage but it wasn't an issue at all.

margaretclare

Paul_Herring wrote: »

It's 'normal' enough, such that an OD is sometimes seen as a right, usually seen as a feature of a current account, and they are in common use.

Which fits the description of 'normal' for most people.

Being in 'common' use is not the same as being 'normal'.

*Chattie*

margaretclare wrote: »

It isn't 'normal'.

been 'normal' enough on my bank account for years

£100 interest free and £1,000 authorised.

Paul_Herring

margaretclare wrote: »

Being in 'common' use is not the same as being 'normal'.

In general, perhaps not. In this instance, though, it is.

Unless you'd consider the fact that having an OD is somehow 'ab-normal?'

kriss_boy

Paul_Herring wrote: »

I take it you're not with Halifax then?

Unfortunately I am so we are moving money about to ensure all our accounts are sufficient to cushion rainy days that could have possible pushed us into the red.

In saying that though, the A&L offer a 0% overdraft so I've opened an account with them in order get my hands on their cash and stick it in a savings account.

oxenryd

agsnu wrote: »

Indeed, there's nothing stopping anyone commenting on anything. But when people have no idea what they're talking about, it's perfectly legitimate to call them out on it and point out that they're not really qualified to comment because their perspective is skewed.

It's not that I have no idea what I'm talking about, I just have a different view/experience/circumstances to yours, as you said yourself. I never said my opinion is the right one, it's just mine.

gfplux

Hello all,
As the original poster I have had the benefit of reading as of now 50 replies.
I see that many people are introduced to overdrafts when at Uni and keep the habit afterwards.
I am interested in the many comments that suggest due to errors and mistakes with DD and others that it is useful keeping the overdraft as a buffer.
May I ask:-
Does everyone check there statements every month line by line?
and
Who makes these errors you, the utility or the Bank.
thanks