Need help!!!

jo-82

I really dont understand how banking works (im only 24) so no wonder Im in debt! Can anyone help please?

* How does an overdraft work ours is 350?

* We have a platinum account - do i get charged extra for this ( lloyds tsb) and whats the differencebetween platinum account and a basic one? (hubby already had platinum -joint account)

joughtib

Basically, your overdraft is money you can access, but you may get charged for the privilege of using it (The platinum account - see below)

Platinum account. Costs £15 per month, and for that you get Worldwide Travel Insurance for you/spouse and family, or winter sports cover. AA Breakdown Cover (Roadside Assistance/Home Start and Relay). Mobile Phone insurance, Sentinel Car Protection, and a £250 Interest Free overdraft.

angchris

unless you are using any of these benefits for your £15 a month i strongly advise you to make an appointment with lloyds and ask to open up a basic account. i had the lloyds tsb gold card at £10 a month with cheque book and a visa card, i dropped to lloyds basic account and i still have those facilities for free. go ahead and save yourself £15 a month its worth it in my opinion.

dudleyboy

At 24 you really should know how banking works!!

An overdraft is like a buffer on your account that should only be used in emergencies. It's pretty handy to have just in case you have an expensive month and you've got a few days left until pay day. Rather than having zilch in your account and no money to access, the overdraft provides a safety net until your pay arrives. The downside is that ODs are quite expensive (high APRs / interest rate) so it can cost you more money in the long run. Better to just use it as an emergency and ignore it because if you start counting it as your own money, as the banks will hope you do (to make more money out of you!), you'll head down the slippery debt slope. Don't become reliant on it! It's for emergencies only!

As for you bank account - don't be blinded by marketing rubbish like "Platinum" or "Gold" account - you're essentially paying money to the bank each month for services that you'll never use (such as those mentioned by joughtib). A normal, fee-free, current account is all you need! Check out Martin's bank account article here:

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1109610116,88950,

It's easy to switch from your existing bank account to a new one and they do all the hard work for you (like transferring Direct Debits and Standing Orders).

Hope that helps. Best of luck.