Informal overdraft woes - help!

lobsta100

Hi

I had got us into a much more manageable situation where I had budgeted and stopped using credit cards for everyday spending, transferring all debts onto a 0% balance card.

I don't know whats happened this month but I hadn't looked at the current account for about 2 weeks and I just checked and we are over £2,000 overdrawn! We have a formal overdraft limit of £1,700.

Am I correct that every day we are over the formal limit we are being charged?? We breached the limit on 21st March and I dont get paid (my pay will be just over £2,000) until 31st March.

I dont know what to do. On top of this we manage to have £300 due on the card that I thought we didnt really use anymore.... I know that for the next week any spending will have to be on the credit card, but can anyone offer any advice how to deal with the next week until I am paid?

Is there any way to stop being charged for every day we are over the overdraft limit?

Thanks for your help

Mags_cat

lobsta100 wrote: »

Am I correct that every day we are over the formal limit we are being charged?? We breached the limit on 21st March and I dont get paid (my pay will be just over £2,000) until 31st March.

That depends on the bank. You'll need to check the Ts&Cs of your particular account to get the details.

If this is the first time you've exceeded your overdraft limit and you can sort it out quickly it *might* be worth a phone call to your bank to ask whether they would consider waiving or reducing the fees. You can but ask.

Otherwise, it would definately be worth getting some advice from the wonderful people here - have a look at this post and fill in and post the SOA to get some more advice.

BigCraigJohn

Open a new account tomorrow with a different and unrelated bank and consider this effectively a lost cause until you can afford to get right on top of it. Most banks have some sort of fairness policy where they wont add charges if its there charges that take you over again and they are usually required to give notice.
For example you got £50 over 1 month and they tell you they will add £60 charges in 14 days you pay in £55 to get back under the limit, this then takes you back over the limit, they shouldnt charge you again and I believe these charges at this point are disputable with the FOS.
Best thing I ever did was just stop servicing the charge every month and open a new account.

Byatt

Hi lobsta (love that name!), there's no harm talking to your bank (no guarantee they will budge as I know to my cost), but can you ask for a temporary increase in your O/D so you are not paying any extra charges? Don't know if people will think this is a good idea or if it's possible (although I have done it in the past, it didn't work for me recently). But there's no harm in asking. Say you want it for just a week until you are paid.

Next, list essential spending/bills for the next week and see where you can reduce/juggle.

Then, most importantly start a spending diary now. I have a little note book I use. Once it is in black & white it's amazing to find out non essential spending!! I also check my account on line every day. I know that's not always easy and sometimes we don't want to see just how bad things are, but taking control is empowering.

Next, go through your store cupboards/freezer and see what you can use for the next week without spending anything except on essentials such as milk.

Who used the credit card? And is the £300 the total or what you need to repay?

mildredalien

It depends on your bank - I'm with HSBC and they stack up fees for every outgoing that takes you over your limit (I think - it certainly hasn't been a daily charge), but don't put the charges on immediately - they'll put them on midway through the next month. When I've gone over the limit it has meant tightening my belt the next month to make sure I can cover the fees but at least that's workable.

You could speak to your bank and tell them you are in financial difficulty, and ask if they could they extend your overdraft temporarily to avoid any further charges if there is more due out of your account over the next week. Worth a try! Make sure it's temporary though.... Also, is your credit card minimum payment £300 or is that the balance you usually pay off in full? It's not the best idea to spend on a credit card, but if you would be able to pay it off shortly then it might be a better option than racking up a ton of fees for the overdraft.

I'd really recommend checking your bank account regularly Before christmas last year I thought I was doing so well budgeting and not overspending, then I just stopped checking what I was taking out and how much I had left - ended up around £150 over my overdraft by the end of the month, oops.

NeverAgain_2

Definitely worth asking the bank.

Apart from anything else, it shows you are on top of your situation which is an absolute pre-requisite for any future borrowing.

I would go to the branch - if there is such a thing - and look the spotty young man who is laughingly described as the manager (bit of sarcasm there for that idiot further up the thread) in the eye.

Much harder for anyone to refuse face-to-face, particularly if you are on form and the words come out well.

Powers have been steadily taken away from branch staff, but they should till be able to deal with a low-value current account overdraft without having to 'ask head office'.

lobsta100

Hey everyone

Thanks so much for your replies!

My account is with HSBC. I may try calling them, the trouble is I only recently increased the formal o/draft limit from £1,500 to £1,700 so asking them to waive fees fot now being over £2,000o/d may not go down so well!

The credit card debt is the total amount due on the card, not the minimum payment. I had effectively cleared it a couple of months ago and had stopped using it altogether, but then we had some emergency repairs that had to be done and we had to pay when we didnt have enough money in the current account.

I think I will need to do a spending diary. I will need to get my wife to do this especially as she does all the food/ supermarket shopping.

When I last did an SOA and budget, I was feeling so much better and cut back on lots of things, but since then feel I have slipped a bit!

Thanks again for the advice.