Switching Accounts - Overdraft

CeePeeBee

Hi Guys,

I've been with Barclays Bank with one account or another for approximately 22 years (since I was 8 or 9).

I have had a few issues with finance recently which has caused me to go over my agreed overdraft limit of £250 and incur charges. So I thought I would go to Barclays and ask them to increase it for a couple of months until things got settled.

They refused. I apparently should have taken advantage of the pre-approved overdraft changes when I was offered them, rather than when I actually needed them.

Anyway, long story short I was looking to switch to Halifax and this is the last straw.

My question is, do I need to get within my overdraft limit (or not in overdraft at all) in order to successfully switch to another Bank Account? I'm guessing yes....which might be an issue currently.

chexum

CeePeeBee wrote: »

They refused. I apparently should have taken advantage of the pre-approved overdraft changes when I was offered them, rather than when I actually needed them.

That's a good way to put it. Remember, the bank is aware of your circumstances, and will not extend your credit lines if they change for the worse. Moving looks just as bad in their eyes as switching (or even losing) jobs - that's against stability.

CeePeeBee wrote: »

My question is, do I need to get within my overdraft limit (or not in overdraft at all) in order to successfully switch to another Bank Account? I'm guessing yes....which might be an issue currently.

It all depends on your credit history. Your current overdraft usage in many cases is not reported, and you can generally open a bunch of credit accounts (bank account with overdraft, credit cards) at the same time. There's no need to "switch" accounts, you can gradually start using another one, and keep an eye on both accounts if you are disciplined enough.

However, if you exceeded the agreed limits, that will usually leave a marker on your credit file, which will make access to credit more difficult short term. If you're past your limits, and have trouble getting back in black, then try to remedy that immediately, and forget about "help" from the banks. If you are really desperate, the most they agree is a temporary relief which will mean you won't get credit for a few years.

Depending on what state your credit file currently is, you may be able to get a new current account with a larger overdraft, and pay back the present one, but don't bet on it. Even if you can remedy it, don't close the old account on a whim - that will leave the last three years of history with the marks on it for all lenders to see for ages.

Better try the debt free wannabee parts of the forums before the charges dwarf your actual usage.

CLAPTON

check your credit files to see what's on them before applying elsewhere

pmduk

I was always taught to assume that a bank only lends money to people who don't need it.

withabix

It is cheaper to plan to be in debt with nearly all banks, as the monthly charges for 'premium' accounts with interest and charge-free overdrafts are almost always less than a single unauthorised overdraft fee.