overdraft

totallybroke_2

hi all

any ideas on how i can decrease my overdraft. my bank will only let me make adjustments when my account is in credit but my overdraft is £1900 and my wages are no where near this

curlytop12

totallybroke wrote: »

hi all

any ideas on how i can decrease my overdraft. my bank will only let me make adjustments when my account is in credit but my overdraft is £1900 and my wages are no where near this

got rid of my £800 OD like this:

opened separate bank account,with a bank not connected to original one ( in case of setting-off)

put salary into new account,and all DD's to go out of that account.
left old account with -£800 balance and set up standing order to pay £xx each month until OD paid off.

hope that made sense!!

Tixy

Huh - I'd complain to your bank to be honest.

You are saying they won't let you change your overdraft limit from say £1900 to £1600 until you are at a point where you are not overdrawn at all?

Thats ridiculous - have you been in branch to talk to them about this? Its not just that thats how it works via online banking but they can do it whenever?

If going in branch doesn't work I'd write a letter of complaint about not being responsible lenders.

happy_bunny_2

I've done this too and am paying a 2k OD off slowly.

Some would advise against this, as they could just cancel the whole lot when they notice no salary paid in and if you can't pay in 30 days you get a default.

On the other hand, they could cancel it just after you get paid, keep all your cash and you are stuffed for the month.

Some banks expect 10% of the OD to be paid in every month, some more. Maybe best to check your banks T&Cs,

Good luck

Poosmate

ODs are a mare to pay down. I was doing ok last year (not sure how I was manging it but there you go) then had a really bad run of bad luck and ended up back to the limit again. I never go over the limit but just don't seem to be able to get back into whatever I was doing last year when it was reducing.

I'm trying something new this year. I've left the OD acct exactly as it is but instead of using it for my daily spends I am now using my mortgage current account for day to day spends (I give myself pocket money each week which pays food, petrol, lunch, whatever else I fancy). On the day before payday I'll pay off my mortgage current account from my OD which means I only pay high interest on a larger balance for one day. Obviously my mortgage current account is on very low interest but my regular payment into it more than covers the interest on it already. So the one off payment the day before payday pays it off and the regular payment pays it down.

Works in theory anyway but if you're going to use cheaper credit to get out of it you have to be strong enough to pay what you've spent so you don't get even more into debt or just transfer it (albeit to a cheaper interest rate but it becomes secured debt - not good!).

Poo

CashRequired

The overdraft was probably my most challenging debt. Definitely a tricky one, because i was -1500 at the end of every month, when i got paid it went back to about £50 cr.

I basically saved money in my savings account each month, then when i reached 1500 i paid it off.

Poosmate

CashRequired wrote: »

The overdraft was probably my most challenging debt. Definitely a tricky one, because i was -1500 at the end of every month, when i got paid it went back to about £50 cr.

I basically saved money in my savings account each month, then when i reached 1500 i paid it off.

Yeah I think failing my current plan, that's the only other way I'll be able to pay off my OD. I've tried putting smaller amounts in (like the odd £50 or £100) but it never seems to work out. I think you have to have enough to pay it off completely too.

Another thing to watch if you want to reduce you OD limit is some banks may charge you for the pleasure! I'm with HSBC and they do a review each year and ask if you want to change it. I believe they will change it free at review time but if you need to up it or lower it any other time they'd charge £25.

Poo

CashRequired

Yeah the yearly review thing they insist you pay some kind of "arrangement fee", which is just annoying. I'm with HSBC and they didn't charge me for getting rid of my OD when I closed it a few months ago.

I think what some people do is open up another current account and have their wages paid into it. Then each month pay off some of the overdraft in the old account. That's another method i've read on the forum before. That saves living in the red so to speak, sort of treating it like a credit card or another debt.

mrsb83_2

Stopping your salary from going into that account could trigger a review and possible recall of the overdraft. If you're not in default with the bank, I'd try to keep the account running.

I saved £ in a separate savings account and transferred it back to my current account when I hit £500. I did this 4 times to clear my £2k overdraft. Because I budget, having the extra money in my current account threw me off, and I liked seeing the savings balance go up. You will pay more in OD interest this way, but for me it was worth it.

Newbie2012_3

HELP! I am in a similar situation. I was thinking maybe my only way is to move to a different bank with some of my in goings so I can hopefully build up some money as at the moment I have nothing and am £3K over drawn....it has just spiralled out of control since being made redundant. I am now a full time mum with only a very small amount of money coming in each month....any ideas or is the 'getting another bank account' the only thing/ best idea?

rdchick

I am in the same boat as Newbie2012. I have a massive £3K overdraft but have a good relationship (if such a thing exists!) and I am worried by transfering my wages etc to another account I will upset Halifax and they will take it away from me and demand it all back in one go

I think my best bet is using my account still but putting some into savings and then when I am up to something like £500 I can bring it down and start again... what do you reckon?!