What's your opinion? Being overdrawn.....

georgiasmum

I was bragging to my work colleagues about becoming debt free recently and have been helping another (on the sly) who is in serious £££ trouble with the advice I have gained on this site and the subject of overdrafts came up.

They were telling me that they 'live in their overdraft', 'my overdraft isn't covered by my salary' etc etc and they weren't concerned at all. In fact they mocked me mercilessly because I have £500 o/d only. I feel guilty if I use it and my salary more than covers it but it does help in unexpected disasters and it is competitive (imo)

What do you think? Are you worried by your overdraft? Am I I mad to be worried about it if I use mine? One lady actually said that 'they' (Halifax) wouldn't want me as a customer for much longer if they didn't start making more money out of me....

immoral_angeluk

georgiasmum wrote:

I was bragging to my work colleagues about becoming debt free recently and have been helping another (on the sly) who is in serious £££ trouble with the advice I have gained on this site and the subject of overdrafts came up.

They were telling me that they 'live in their overdraft', 'my overdraft isn't covered by my salary' etc etc and they weren't concerned at all. In fact they mocked me mercilessly because I have £500 o/d only. I feel guilty if I use it and my salary more than covers it but it does help in unexpected disasters and it is competitive (imo)

What do you think? Are you worried by your overdraft? Am I I mad to be worried about it if I use mine? One lady actually said that 'they' (Halifax) wouldn't want me as a customer for much longer if they didn't start making more money out of me....

We don't have one, full stop. We were offered and refused. Every month our money goes in and is ours, not the banks, and we've never been in the red. After all an overdraft is just another debt, but directly linked to your bank account so you have less control of what you pay into it.

Jolinar

Personally I don't have an OD anymore, but I wouldn't worry about what others think. People can't believe I don't have a credit card and ask how I manage to which I reply, by living within my means and using savings for emergencies

As for the Halifax not making money out of you, they get to use your money when you pay it in every month to make money out of you, so again the person is question is talking rubbish.

The only time to worry about an OD is when you have no chance of paying it back IMO.

GettingThingsDone

Hi - I used to live in my overdraft(s) too, until I had my LBM!

I too have one £500 o/d facility that I don't use, but keep in case of emergency. My first step was to get out of the overdraft trap - I think the negative psychology of seeing my account always in the red meant I didn't bother paying much attention to my financial affairs.

Now, I plan and try to control my spending so that anything left over at the end of the month is mine!!! It seems to be working, but this is my first proper month of being a DFW...

furndire

Well done to you for being debt free.
Wait for a couple of years, and then see what position your "friends" are in. At least you can sleep at night.
Take no notice of the others, they are totally irresponsible, you know that, I know that, and the rest of the people on this forum know that.
Wait until interest rates go up a little bit more then see how they manage.
Point out to them that what they are paying in interest would probably pay for a holiday, each year.
No-one knows what is round the corner, loss of job, illness etc., starting a family, etc. That is when reality hits most people.
I would think that before too long, the banks will be reining in some of these overdrafts, as they realise that people are getting in above their heads, then they will offer the loans - next senario, overdrafts back up to limits again, and then begins the spiral down.
Ignore them - you know you are right - some people are just too thick to bother telling.

climbgirl

It doesn't matter if your salary covers it - it's not your money and at some point you're going to have to pay it back to the bank. And use that month's salary for living! So yes, it's very definitely a debt.

I never go in overdraft, I have a £200 one set up on my account but that's because I cut very close to the line some months and I want to avoid any default charges if I did happen to go over. Hasn't happened yet, but I treat it as my safety net and hope it never has to be used!

Sammz

I live in my overdraft but it's only £100 (and free) and they could take it away and I'd not miss it.

Avogirly

I don't have an overdraft on any of my accounts. I agree that it is another debt and I really don't need any more debts at the moment!!!!!

tinkerbell212

I have an overdraft but purely for emergencies, ie, if a payment has not gone through correctly. I hardly ever use it, if I do it is maybe for a few pound and I feel very guilty about it. I do have a credit card (which doesn't fill me with pride) and am working very hard on paying it off. I do think that having debts, overdrafts, loans en credit cards are a bit of a culture in this country.

AMILLIONDOLLARS

In days gone by I use to operate a £1,800 o/d facility and actually used all of it every month:eek: :eek:, I'm now down to £497 and hope to pay off all of it by the end of the year:j , I must admit I still have a limit of £1,500 which I think of as my personal challenge not to use, but plans are afoot to reduce this by 50% at the beginning of next year!!

All in all its a mugs game, when I think of it I could use that £497 to pay toward reducing one of my credit cards:o !! Now that a serious thought:cool: !!


AMD

joanne0620

I have £500 overdraft and have only in the past 3-4 months finally stopped living in it and being constantly overdrawn, it's good to know that I could use it for emergencies if absolutely desperate but would not dream of using it otherwise.