Can anyone offer me some advice to get rid of my graduate overdraft?

lottyburns

Here's my situation. I graduated from University two years ago and have a Lloyds graduate account. I don't have any debt (apart from the student loan but i'm ignoring that...) but have a £2000 over draft which I live off. I am always at the bottom end of it and want to get rid of it. However, when I get paid, I spend it all because it is there and max out my overdraft.

I want to be able pay back a bit per month which I cannot touch or have a different account which I don't touch. Im starting to incur interest.

I am starting a new job this month and will be earning £20,000. I am good at saving but it has to be somewhere different to the money I spend.

I considered getting a 0% cashback credit card, as i'd like to increase my credit rating (which is quite good I think) and earn some money and i'm sure I could pay off the £2000 in one year. But credit cards scare me a little!

Anyone got any ideas?:money:

Mikeone

I'd perhaps suggest opening a separate bank account into which your salary will be paid and which you will use as your main current account.

Devise a realistic budget to live on and work out how much you can devote to paying off the overdraft each month. Set up a standing order from your new account to your Graduate account each month (probably close to payday for convenience) and watch the OD drop month by month.

Get rid of all debit cards/chequebooks etc from the OD account (to avoid temptation to use it) and regard it as dormant.

Any spare money can be transferred to the OD as and when you can afford it, and the OD will disappear more quickly.

I really wish I had done this when I graduated.

Good luck!

lizzie_b

I graduated 3 years ago and I did this about 12 months ago, as yet (due to not earning very much) I havent been able to clear much of the graduate overdraft. But the PMA it brings by not living in negative figures has made it alot easier to focus on what I'm spending and where I can make savings.

Hope this helps you too. xxxx

downnotout

Can you not go in to your local branch and reduce your overdraft each month by say 50 or 100 pounds?

wendz86

I paid off mine by saving money in a sepearte account , a bit from each pay and also some that I earnt from surveys etc.I found it easier saving it seperately as meant i didnt keep going into it again.