Overdraft

shezam

Hi all,

I had a £300 overdraft with Santander which was currently maxed out. Never had anything going into that account but decided last month to pay it off.

Question is, now its paid off in full, should I ask them to close the account? Trying to build up a better credit rating. Not sure whether to close the account, or keep it open but never use it. What would you do?

Thanks
Sx

DarnIt_3

If you have not kept the account in order, or you are no longer paying a regular payment in, you may well find your overdraft is revoked. It is better to close it rather than they take it away and then you are left with £300 to pay than to keep it open, it may do more harm than good.

I would suggest a credit builder card for helping with your credit score.

shezam

Hi Darnit.

I have already paid my overdraft back. I was a bit scared of them asking for it so paid it off in full last month! Quite proud of myself for doing that!

The question is what do I do now? Since there is no money going into the account, no transactions coming out. I can't even remember the pin number for my card. Not sure if its best to keep it open or just close the account.

shezam

**** bumpity bump ****

rdchick

Hello

well done for paying it back I would have a look at your credit report and see how much credit you have available to you. Do you have other sources of credit like a credit card, loan or phone contract on your report? if your available credit is really high that can look just as bad as having everything maxed out, so it's a bit of a balance.

xxx

DS4215

Is there anything you could use the account for? - perhaps put some in each month to save up. If you have forgotten the pin number for the card you will still be able to get money at the counter, but this will make you less likely to spend it. Just £20 a month will give you a decent amount for Christmas presents for example...

Tixy

I would close it. If you want an account to try to improve your credit rating then overdrafts are rarely the best way - usually a credit card would be preferable showing you using and paying off the debt.

You haven't said what other credit accounts you have on your credit file - if you already have other accounts such as credit cards I cann't see there is anything to be gained from keeping it open (from a credit file point of view).

Well done for paying it off before they recalled it.

shezam

Hey thanks all for the replies.

Only other debt I have is a Hallifax Credit Card with £800 on it, interest free untill April 2012. I think I will set up a wee Standing order to the overdraft account and sort out some savings. One thing I don't have but have always wanted! The fact I can't remember the pin number should make it easier for me to save & not spend. Thanks everyone!

Sx

timbstoke

It depends entirely on your situation and mindset. I have quite a poor credit rating now, so when I've paid off my overdraft, I'm going to keep it because credit is going to be harder to come by now, so it's worthwhile keeping what I've already got available. If you can get another overdraft quite easily, there's probably little point in keeping this one on standby.

jimtrent

well done mate, it takes a bit of self restraint doesn't it? Worth it though to avoid the charges that silly people like me incur!

cassidy0111

shezam wrote: »

Hey thanks all for the replies.

Only other debt I have is a Hallifax Credit Card with £800 on it, interest free untill April 2012. I think I will set up a wee Standing order to the overdraft account and sort out some savings. One thing I don't have but have always wanted! The fact I can't remember the pin number should make it easier for me to save & not spend. Thanks everyone!

Sx

Does the account pay a decent rate of interest? I get 3% Instant Access with ING. It took me 10minutes to set this up and I use the money I save to pay my car insurance and tax. Its only 3% but it is still free money I guess.