Halifax have put me in an awkward position

Dan0956

current debt...

-2300 at barclays (pay £15 a month charges)

-2000 at halifax account 1 (pay £30 under new system of £1 a day under £2500 overdrawn)

-2000 at halifax account 2 (pay £30 under new system of £1 a day under £2500 overdrawn)


so im 6300 overdrawn and pretty much down to the wire each month. Ive got halifax reward cards now so i`ll get my wages in account 1 and pay it to account 2 after a day so thats £5+£5 from them.

Now i find out online they are willing to extend my £2000 OD for each account to £2900, so i can in affect have £1800 just like that, (but stretching my debt to £8200

Thing is, im thinking.... i could extend each one by £500 as i wont be paying any extra in od charges (2000 and 2500 is the same) and put that £1000 into a savings account and make a better of money on it.

Thats my theory but it just seems easier said than done..... do i trust myself to keeep the 1k in savings, is it worth the hassle? etc.. etc..

As i see it, i can extend my OD to an extra £1000 and put that into savings, for nothing, but then i`ll have the tag of being £7300 OD as oppose to £6300 although technically 1k will be in savings, hmm decisions.

Dan0956

So my best way to save money is to get that £60 a month charges halved and the quickest way to do that is to pay off one my halifax accounts overdrawft.

Now im thinking get the £500 in one of the accounts and im £1500 closer to clearing one of the OD

onlypaddy

bear in mind that when you go over the £2500 limit on each of the halifax accounts, the charges go up to £2 a day

to have debts at this level you are living beyond your means. my advice would be to start budgeting - post on the Debt Free Wannabe board to get some more expert advice on cutting your debt levels before they start to cripple you.

Paul_Herring

Dan0956 wrote: »

[...]so im 6300 overdrawn and pretty much down to the wire each month.
[...]
Thing is, im thinking.... i could extend each one by £500 as i wont be paying any extra in od charges (2000 and 2500 is the same) and put that £1000 into a savings account and make a better of money on it.

You're in not inconsiderable debt. The last thing you should be thinking of at the moment is stoozing, let alone saving (and you'd be paying a LOT more in the daily charges than you could possibly ever hope to achieve on the interest on £1,000.)

You'd be better off trying to get (and keep) the total overdraft on your Halifax accounts to under £2,500, and closing one of them.

scottishblondie

At current interest rates 1k would be earning virtually nothing in a savings account. It would be much more sensible, as you suggested in your second post, to work as hard as possible at reducing your debt with the Halifax to one overdraft.

There is little point in extending one of the overdrafts by £500 and transferring the debt until you can afford to pay off the remaining £1500 from the other, especially if you are worried about being able to resist using this extra spending ability. I'd suggest the DFW board for help on clearing this debt as quickly as you can.

LeeSouthEast

Not to mention overdrafts can be cancelled at any time and have payment demanded in full within in 30 days. Far, far better to work out how to repay what you owe to get back into the black without taking on more debt.

Dan0956

Ive worked out what i think is a sensible solution, what do you think.......

Account 1 is 2k overdrawn
Account 2 is 2k overdrawn

so im paying £60 charges a month.

So my solution....... extend account 1 to £2500 OD which i`ll still only pay £1 a day

with the extra £500 and the £1000 i have in savings, find another £500 (ask mum nicely) then i`ll pay off account 2 to a zero balance and NOT USE IT meaning....... i`ll only have one charge of £30 a month for being £2500 overdrawn.

And with my halifax reward account now in place, i will defo get £5 each month and maybe £10 if i transfer between accounts !!

so i`ll end up with £20 a month overall charges as oppose to £60, this of course depends on that £500 from my mum

if that makes sense, thoughts?

oh if if i cant get £500 from my mum i`ll get it from next months wages

mac2009

I agree with the other posters. No point wasting your time considering strategies to make a couple of quid here and there. Take drastic action to reduce your debt level and stop wasting time fiddling while Rome burns.

Mikeyorks

Why don't you look at the responses on your basically identical thread from just 3 days ago ??

http://forums.moneysavingexpert.com/showthread.html?t=2181503&highlight=

Dan0956

mac2009, You dont think my plan of action to save £40 a month is a good idea?

Dan0956

mikey, because i didnt have the stratagey i just posted now on that other thread