Please Help! Student Account with £3000 overdraft - £2 A DAY charges from August!!

Studentspender

Please could someone help/advise me on what to do with my Halifax Student Current Account which is currently £3000 overdrawn!

I graduated last year so therefore knew that Halifax were going to start charging me for my overdraft around about now, but having got a letter through saying that the charges were going to be £2 A DAY from August for overdrafts over £2500 I am really unsure what to do as I cannot pay £60 a month for my overdraft!

I obviously want to change bank where the charges for overdrafts are smaller, but who will even accept me with a £3000 o/d?? I aim to pay off £1000 by August hopefully (which means the charge would reduce to £1 a day - but still dont want to pay £30/£31 a month!) so if anyone could give me some advice on what to do for now then I would be very grateful indeed....

Many Thanks!

Lokolo

Unlikely to get a full overdraft for that amount unless you have a very good credit rating and a good income.

Also, £1 a day on £2,000 works out at around 18.25%, which is the same rate as most overdrafts, so the charges would be the same at that amount, so moving the £2,000 overdraft would be pointless. It maybe worth moving when you get to say £1,000 left. You are more likely to get the overdraft and the charges would then be cheaper.

Studentspender

Thanks Lokolo, so basically, I have to put up with the charges until I reach £1000.

My sisters overdraft with Lloyds TSB is £2000 as her interest is only about £11 a month???

Also, when my o/d is £2000, could I move it to a A&L current account, which is 0% for a year, or would that be unlikely that I could move the whole £2000??

Hope that makes sense.

BigAndy_79

In my experience A&L are rather tight with their overdraft lending. I would very much doubt that they would give you that straight off.
Getting a credit card with a balance transfer option that permits transferring from a bank account could be something to look at for yourself...

Lokolo

Studentspender wrote: »

Thanks Lokolo, so basically, I have to put up with the charges until I reach £1000.

My sisters overdraft with Lloyds TSB is £2000 as her interest is only about £11 a month???

Also, when my o/d is £2000, could I move it to a A&L current account, which is 0% for a year, or would that be unlikely that I could move the whole £2000??

Hope that makes sense.

http://www.lloydstsb.com/rates_and_charges/current_account_rates_curr_page.asp

Without wanting to say your sister is wrong, their site says otherwise. £2,000 is a 1.45% a month, which is £29 a month.

Studentspender

Ok, where would I even start looking for a Credit Card with a balance transfer option that permits transferring from a bank account with a small interest rate?

(Sorry I'm useless, hence having a £3000 overdraft!)

Lokolo

http://www.moneysavingexpert.com/cards/balance-transfer-credit-cards#longterm

Try this.

Sharon87

I feel sorry for all the students on Halifax overdrafts as the new charge is ridiculous and isn't what they signed up for.

OP can'r you get a graduate overdraft with Halifax or won't they let you? If not can you move to another bank with graduate overdraft facilities, this means it will still be interest free the first year after graduating, and it gets reduced steadily every year. I'm with HSBC and the first £1000 (out of £1500) is interest free, I'm in the final year of interest free now.

This could be an option, even if it's not all the remaining £2000, then you can steadily pay off the remaining balance. Or can you do what I did and go 'mum, my overdraft's charging me £1 a day'... 'mum: i'll lend you the money' I'm not a scrounger, but I got refused for a credit card with interest free portion

Sharon87

Also, don't forget to upgrade it to a Reward Account so if you pay £1000 in a month (can be £100 transferred in and out 10 times ) then you get £5 Reward, so this will help towards paying their fees!!

Studentspender

Thanks Sharon87! This is most definitely NOT what I signed up for!

Having looked at other graduate accounts the maximum o/d facility is £2000, so hopefully if I pay off £1000 before August I can switch to a different graduate account...looks like I will just have to wait until I can actually do that! OR, look for credit card to whack it all onto???

ALOT of Students/Graduates are going to get stung by this, and I dont want to be one of them!!!

rachelo83

Studentspender wrote: »

Thanks Sharon87! This is most definitely NOT what I signed up for!

Having looked at other graduate accounts the maximum o/d facility is £2000, so hopefully if I pay off £1000 before August I can switch to a different graduate account...looks like I will just have to wait until I can actually do that! OR, look for credit card to whack it all onto???

ALOT of Students/Graduates are going to get stung by this, and I dont want to be one of them!!!

I recently had this letter too, and I think it is absolutely shocking that no graduate account is being offered.

I would recommend doing what I did, Virgin Money have an offer where you can transfer into a current account and then the balance is interest free until July 2011 (4% charge for transfer). So I've done that, and given the card to my mum so I can't use it otherwise. I applied online and was instantly accepted and you have to pay a minimum of £25 per month off which I think is good because then you are actually reducing it more than some others where the minimum is just £5.

Hope this helps, although one thing I will say is I will be ending my 14 year relationship with Halifax once I sort this all out.