Advice on my girlfriends monthly overdraft charges

TechyTim

Hello,

As you will see I've just registered with this forum to ask my question - I've been a lurker for years.

It's a pretty straight forward query but my girlfriend tells me theres nothing she can do but won't tell me everything and I don't like seeing her get ripped off.

She's with a building society since she is unable to open an account with a bank due to a poor credit rating from her early 20's and also, I presume, because she keeps going in to her overdraft.

At the moment she has no surpless money, she is getting paid, her bills come out - sending her in to her overdraft - and then she gets charged £30 for the pleasure, £1 per day. If it wasn't for this £30 she would be going in to her overdraft in the first place and therefore able to put a little bit away.

She tells me this has been the case since last year, I recon its cost her almost £300 to date.

If anyone has any suggestions I'd be greatful.
Tim

bengal-stripe

A number of banks have gone over to charge an agreed overdraft not by the interest occurred on the daily balance but by a flat rate of £0.50 or £1.00 for every day the overdraft is used (frequently capped to a certain number of days per month).

If your girlfriends building society has the rule of charging a quid for up to 30 days, then your girlfriend has two choices: either not to use the overdraft or change to another bank which is cheaper and/or might not have gone over to flat charges (yet).

TechyTim

Hi Bengal-stripe,

Thanks for you reply. The problem is she can't get a bank account because of her credit rating...

I wonder whether an old fashioned approach would work, going in and speaking to the account manager. I can only but try I guess.

Tim

noh

The simple fact is she is spending more than she earns. She has to spend less.
If as you say it is only the £30 monthly charge that pushes her over her limit then she needs to spend £30 less a month and she will not be in her overdraft ie spend £1 less a day.

I suspect there is more to it than she is prepared to tell you especially as she appears to have a past history of poor money management.

GlamGirlie

she can get a basic account, this may help her to exercise control as well as reducing costs. And over time her credit rating will repair; as it is, she is damaging it more and more each month.

meer53

TechyTim wrote: »

Hi Bengal-stripe,

Thanks for you reply. The problem is she can't get a bank account because of her credit rating...

I wonder whether an old fashioned approach would work, going in and speaking to the account manager. I can only but try I guess.

Tim

Is she prepared to go in and see the manager ? Because they won't discuss it with you.

TechyTim

Noh, I agree, it's difficult to really say much as the exact details are unknown - it's pretty fustrating for me as I want to help but I've had to resort to this! Unfortunately she admits she is paying for poor money management in her youth!

GlamGirlie, thanks for this, what exactly do you mean by a basic account and I presume you mean for her to try and put some money in this month by month to start improving her credit rating.

Meer53, I was hoping they'd not discuss her situation but just give me an idea whether they would consider even a discussion with her at all or simply hide behind corporate policy.

Thanks all so much for this, I'm very impressed and very grateful for the ideas and suggestions you are putting my way.

MonkeyMad

If I understand correctly it is only the charges that are putting her in overdraft and they are not mounting (from which I would infer her income exactly matches [actual spending +£30] can you just lend her £30 to avoid this months charges, which would end the cycle entirely?

Failing that need to save £30 elsewhere which could mean a month of beans?

TechyTim

MonkeyMad wrote: »

Can you just lend her £30 to aviod this months charges?

I had already thought of this...but unless I get her bank details, she will not take any money off me! She's just not used to letting others help and very very stubbourn...and I don't give in, perhaps not the best combination!

sulkisu

If it's only £30 that is needed, are you saying that there is no way that she can cut her monthly spending by £30 or raise an additional £30 from somewhere? Take packed lunches to work, not go out, cut down smoking/drinking, buy a little less food shopping, sell something on ebay or at cash converters! Without knowing her income and expenditure it's hard to advise her, but if she's working full-time, even earning minimum wage, she must be able to make a saving somewhere.

GlamGirlie

A basic account is offered by most banks & building societies and is one where the applicant's credit rating is not checked at the outset. Thus it is suitable for those with poor/bad credit, CCJs, bankruptcy etc.

It will not offer an overdraft, nor a credit card, but is a normal current account in that wages can be paid in, and Direct Debits etc paid out.