Using Student Account Overdrafts

callum9999

HSBC just gave me an account with a £500 overdraft. If I just withdraw it all, is that likely to make HSBC reluctant to give me an increase as I'm abusing it?

olly300

Why do you want to withdraw it all?

Overdrafts aren't free money the bank can recall them at any time. So if they see you are not using the account but owe them money they will ask for the money back.

callum9999

olly300 wrote: »

Why do you want to withdraw it all?

Overdrafts aren't free money the bank can recall them at any time. So if they see you are not using the account but owe them money they will ask for the money back.

I'm not going to yet, I was just thinking about using the overdraft on that account from now on for day-to-day spending. (I have savings so I won't be going into debt I can't pay off).

I guess I should have double checked - but I didn't see anywhere that said it had to be my main account.

Lokolo

If you don't have student loan going in of course they will be reluctant to give you anymore. They will also withdraw the overdraft with no notice if you abuse it.

ses6jwg

I believe it is known as deficit banking.

I've done a bit of it, and it works, but be aware it can be damaging to your credit score.

callum9999

Lokolo wrote: »

If you don't have student loan going in of course they will be reluctant to give you anymore. They will also withdraw the overdraft with no notice if you abuse it.

I will get my student loads paid in there but that won't be for a while (I don't start until October).

I'll give it a miss then. The only reason I got it was to show I had over £x amount to the Australian government so if its going to affect whether I get increases or not (just thought I'd ask as with credit cards its the other way around - you need to max them to get the increases) its not worth it.

olly300

callum9999 wrote: »

I will get my student loads paid in there but that won't be for a while (I don't start until October).

I'll give it a miss then. The only reason I got it was to show I had over £x amount to the Australian government so if its going to affect whether I get increases or not (just thought I'd ask as with credit cards its the other way around - you need to max them to get the increases) its not worth it.

Not correct with credit cards.

I've never been near my max but have got my credit limit increased on all my cards. The thing that got my increases tends to be me borrowing on a 0% for a few months then paying the balance off in full, or just using the card for smallish purchases.

atypical

ses6jwg wrote: »

I've done a bit of it, and it works, but be aware it can be damaging to your credit score.

I've never heard that it damages your credit score, could you explain please? If you're using the credit available to you responsibly why would it have a detrimental effect?

[Deleted User]

Credit accounts are shown on your credit report - this also shows how much you owe, and how much credit you have available to you.

If you are within the terms and conditions of the account, this will also be shown, so should not have a damaging effect - certainly not in the future, although lenders will take everything on the report into account when assessing togive you credit, or not.

callum9999

olly300 wrote: »

Not correct with credit cards.

I've never been near my max but have got my credit limit increased on all my cards. The thing that got my increases tends to be me borrowing on a 0% for a few months then paying the balance off in full, or just using the card for smallish purchases.

Well its correct with my credit cards (and has been confirmed by both providers). As an 18 year old with no permanent employment, there is no way I could possibly get a 0% card!