Bank - telling us to repay overdraft

Harry_Flashman

Pretty much what I did when Santander announced they weren't continuing with my overdraft (despite several phone call to them explaining that no way could I pay £950 back straight away).

So I simply got another account at a different bank and changed my wage to be paid into that. Now we can arrange an accpetable way to pay it back without them holding me to ransom.

jamesd

medion wrote: »

The o/d is under £2k and each month there is c£3.5k paid in.

It appears that from their point of view they would regard this as you routinely having around £2k less money than you need, not being able to manage your affairs well enough to eliminate this and requiring their assistance to prompt you to do so. That's because overdrafts are really for temporary use rather than routine use, so from their point of view it would make sense to view it as mismanagement. Other credit providers are also likely to view it in this way.

If you're able to, then a 0% for purchases card or balance transfer card would be the cheapest way to go to eliminate the use of the overdraft, putting on the card enough of your regular spending to eliminate the times when your current account balance goes negative.

medion wrote: »

To make it worse they have offered our daughter (who only works part time and is not a homeowner) a credit facility of more than 3x her irregular income!!

Getting unsecured up to about half of before tax annual income is likely to be reasonably easy for those with good credit records. More for students.

AnonymousForObviousReason

As mentioned it maybe worth looking at getting rid of your overdraft anyway.

Doing some rough figures you're giving to the bank on average £36 each year on your overdraft (assuming 50p per day). This is about the same as borrowing £2,000 at 3.35% each year (but you only use of the money for 1/5 of the year).

By moving to another bank that offers you interest free overdrafts (or putting it on an interest free credit card), if you can clear the debt in a year (£167 a month - less £6 as won't be paying bank charges) you'll be making the same as £2000 in a 3% ISA (or 5% as a high tax payer) a year each year. Also if there is an emergency will be able dip into your overdraft, which you can't do now. Even clearing it over two years will help.

These are rough sums please do your own and feel free to correct.