Help! Overdraft & Bank info needed!

prodigalyouth

Hi Guys,

Not sure if I’m iposting in the right section but I need a bit of help.

I have an current account with Abbey and a 1800 pound overdraft. For what seems like a millenia I have been ‘living’ in the overdraft. Everymonth I get paid and it replenishes the overdraft, which means by the end of the month I’m back in it after paying mortgage and other bills off.

Really just fustrated and want to know what the impact would be if I was to open another account and moved my wages and all direct debits to the new account?

The plan is to slowly pay off the overdraft, Is this something I would need to let the banks know? Would they penalise for this?

Any help/info would be greatly appreciated.. I just need to break out of this circle.

Thanks

P

Mark_In_Hampshire

I'd suspect that in the Ts and Cs of your overdraft there might well be a clause which stipulates that the overdraft is made available on the basis that your salary or regular credit is made to the account.

If you were to do what you suggest it might be fine for a month or two, then you may find you get a letter telling you that your overdraft is about to be withdrawn due to the breach of Ts and Cs and you'd then have to find the cash to pay it back immediately.

A loan is probably the cheaper and more sensible option.

Consumerist

If you have a good credit record, have you considered a 0% balance transfer on a credit card. Would this reduce your monthly bank charges for the overdraft ? You can currently get over a year of free overdraft on some cards at an up-front cost of around 3% of the amount transferred. Look here.

The inference of what you have said is that you may be living beyond your means or very close. So your first consideration should be to try to reduce your expenditure or increase your income, if that is possible.

You may be better off posting this question on the Debt-free Wanabee forum where you will be more likely to get helpful advice to sort yourself out.

You can also get some help using the Cards & Loans button at the top of the page.

Hope this helps.

paulmcerlean

The worst thing you could do would be to move to another account leaving the 1800 overdraft un funded.

They will pull it in, meaning you'll have to pay for it all in a lump or they will trash your credit file. Not what you want.

paulmcerlean

The worst thing you could do would be to move to another account leaving the 1800 overdraft un funded.

They will pull it in, meaning you'll have to pay for it all in a lump or they will trash your credit file. Not what you want.

opinions4u

1) Keep the account open and keep funding it - or they will call the overdraft in.

2) Set yourself a personal goal of reducing the overdraft bit by bit - e.g. if your limit is £1,800, then next month don't go over £1,700; the month after £1,60 etc. Be really firm with yourself about this.

3) Go to the Debt-free Wannabe part of the forum for ideas on how to spend less money (or earn more money).

At some point in the past you have spent more than you earn.

At the moment you are spending everything that you earn.

In future you need to spend less than you earn.

- don't go in coffee shops. In fact, avoid most shops!
- take homemade sandwiches to work for lunch.
- only do a food shop after you've eaten.
- reduce your social life a little.

I'd try to avoid consolidation loans and credit cards, because if you don't address your spending patterns you'll just end up with loan and overdraft instead of an overdraft!

mummytotwo_3

A little tip, if you are intent on moving your salary etc to another account, then you will need to pay 5% of the outstanding balance in every month, so on a £1800 overdaft it would be £90 plus the interest charge every month, this will keep them happy for a while.

hth

prodigalyouth

Cheers guys for youer help..its really appreciated..bring on the hiatus for binge spending.