Overdrafts

klfairy

Between us, my partner and I owe just short of £10k. We each have an overdraft and a credit card (my debt is £3800, his is the remainder).

I'm happily paying off my credit card with no troubles, and he's now sorting his out after a few months of his head in the sand while out of work. We're also paying off his overdraft.

I want to tackle my overdraft. I'm with Halifax and have been almost permanently in it for about 6 or 7 years. I have a £2k overdraft, get paid which takes me almost up to 0, then by the end of the month I'm back where I started.

What's the best way of sorting out an overdraft? I once spoke to Halifax about them reducing it by a fixed amount each month, but apparently the only way that would happen was if I phoned them every month to do it. I loathe speaking to them (endless menu system) so never did it.

We earlier discussed getting a loan to consolidate and pay everything off, but I have some missed payments on old credit cards (early 2008) and I think that's what caused the rejection.

So, any suggestions please? I'm not worried about the credit cards, but I do think 7 years of the same overdraft is beyond a joke and I really should tackle it!

happy_bunny_2

Hi,

You could write to them to reduce it each month, can't see how they could ignore that. Cost you a stamp but save talking to people you don't want to.

Other than that, you could open an account at another bank for your wages then just make a payment each month to clear the OD (cut your card up obviously). Risky if the account has to have a minimum amount paid in every month as they may cancel your OD and demand payment within 30 days and you are stuffed. Nothing to stop them doing that anyhow mind, as they are repayable on demand.

HTH

klfairy

Thanks.

They don't really want me to pay them back, I suppose. They make a nice £1 a day from me almost every day, whether I'm overdrawn by £10 or £2000. Doesn't feel like much incentive to cut it back really.

mildredalien

I don't know why overdrafts seem so much worse than credit cards... it's all the same really, borrowed money. The way I see it, how you tackle your OD depends on how high the interest rate is. Is it higher than your CCs? If not, then pretend it's a CC that you are going to pay off last, focus on the most expensive debts first. If it is, then figure out how much you want to pay towards it each month and you'll either have to suffer the phone calls or be REALLY strict with yourself on not spending what's left in there!

klfairy

I've just checked the t&c for the account and there isn't an interest charge as such. It's just a flat fee of £1 a day.

MrsTinks

OK trying to use APR calculators is a nightmare - APR aside - you are paying about 18% a year on 2000 but you're not reducing it so if you think about it... 5 years or so... you'd have paid 100% of what you have borrowed... not a great rate really

Curr946

Why not try for a super balance transfer card, virgin have a 20 month 0% card that will allow you transfer the funds to your account. If you paid £100 a month towards it you would clear it buy the time the 0% ended, though your really only paying an extra £70 when you take into about your overdraft fees.