How do I get out of my overdraft?

Catriona_P

Hi everyone,

I've posted before about my debts and my financially-controlling husband (our finances are separate, we split bills 50/50, I pay for most things for our 1 yr old, I earn slightly less but I want to keep our money apart). Since my original post in January I've managed to cut-down various household costs and on that front I'm doing well.

I'd like a bit of advice on what to do about my overdraft. I have a Barclays account and am always in it, almost up to my limit of £2.4k by payday, and my monthly wages are only £1,384. My monthly overdraft fees are somewhere between £24-30 a month. I've read about shifting debt to other current accounts or credit cards in an attempt to clear them but I'm unsure about where to go from here, what would be the best route etc. I also have a credit card debt at Barclays which is £700 but I'm paying that off £100 a month.

Can anybody advise me please? Thanks.

camuk81

Which has the highest apr the overdraft or the card and are the charges over limit charges for going over?

Tixy

Before you consider trying to shift the debt elsewhere you need to work out how much you can afford to pay off the debt each month.

In fact I'd look at how much you can afford in total to pay off both the credit card and the overdraft each month as your starting point.

Catriona_P

The overdraft rate is 19.3% and yes these are charges for being in an overdraft at all, I don't use the Barclays personal reserve. The rate for the credit card is 18.9% I think.

I usually pay £150 a month on my credit card but nothing to bring down the overdraft and that's probably the max I can pay back at the minute . I realise the rate on my overdraft is higher but I figured I could manage it all a bit better if I paid my credit card off first...

What's the best course of action at this point?

rising_from_the_ashes

If the OD is costing you more then I'd put more money towards this (although there's not a huge amount in it) - what about a more 50/50 split ... but you have to be rigid about making sure you actually do this with the OD.

I found my OD the hardest thing to clear of everything and had it way past clearing everything else - probably (for me) as it wasn't a payment that was made IYKWIM

Have you done an up to date SOA (budget) recently to see what's left (or should be) each month? Found out where money "disappears" to etc?

Catriona_P

Yeah I think the OD is definitely the hardest thing - no matter how hard I try, it just seems to stay the same! I don't know how, I keep a tight budget these days, or I try to but the cost of essentials keeps going up and wages don't, as we all know.

I do have an up-to-date SOA (ish) from the end of January I posted but can't put up a link here! I think I need to do a new one although little has changed since then. I'm being as strict as I can in the hope that the more I pay off, the easier it'll get, but it doesn't feel like it is.

DVardysShadow

Catriona_P wrote: »

.... I do have an up-to-date SOA (ish) from the end of January I posted but can't put up a link here! I think I need to do a new one

January SoA http://forums.moneysavingexpert.com/showpost.php?p=50160261&postcount=1

cottonhead

On a serious note, is your husband controlling in that he doenst like to overspend or controlling in limiting your money / making you pay for more than you can afford ?( you dont have to say of course - just have a think to yourself) If its the latter I would have a closer look. You state that you earn less but pay for most of your childs things, plus half the bills. Maybe thats why you are always up to your overdraft ? Could you not sit down and rethink the way you deal with the finances ? Perhaps do it as a percentage of earnings so your husband contributes a bit more because he is paid more and work out a budget for your child and ensure he contributes half. Thats only fair. If you feel you have to manage rather than speak up ( I have been in that situation ) then not only does your debt increase, so does your stress !
Re the overdraft I guess just cut down on all that you can and decide on a set amount you can decrease it by each month. I phoned the bank and asked them to automatically decrease it on the 1st of every month. Doenst have to be by loads but at least that way you know its going in the right direction and the temptation to dip back into your overdraft has been removed. Then obviously the more it reduces the less charges and the more you can pay off it until its gone. Good luck.

Catriona_P

Thanks so much DVardysShadow for posting my SOA for me

cottonhead - I think he's controlling in both aspects. He hates spending money unless he thinks its on something 'worthy' (and then its no expense spared), but the more I think about it the more I think he likes me being tied financially as it means I can't leave him. Our relationship is not good right now. But I might be doing him a disservice. After I posted in January we did sit down and put together our first real budget, and for a while he did make a bit of an effort to pay slightly more, but his interest is waning now and he's still refusing to budge on the child benefit payments.

Last year I did ring the bank about bringing my overdraft down by £100 a month. They were really unhelpful and the guy I spoke to was bordering on aggressive - he tried to force a high interest loan down my throat as my 'only' option. I told him I wasn't interested and his response was that he'd ring again in 6 months to see if my circumstances had changed. I havn't heard since and I'm reluctant to ring again or go into the local branch in case this happens again - I think I might break down if I do.

Don't really know what else to say

On the plus side I sold £25 of baby stuff on Ebay today which should help me stay afloat until payday next wednesday

AlwaysWorking

Catriona_P wrote: »

Last year I did ring the bank about bringing my overdraft down by £100 a month. They were really unhelpful

I tried the same thing recently with my bank but was told that each time they lowered my overdraft I would be credit scored and that it was a bad idea. I opened another bank account and have gotten my wages transferred there. I am then putting money into my overdrawn account each month in an effort to pay it off.

If only we'd always been this sensible with money....:o

Catriona_P

AlwaysWorking wrote: »

I tried the same thing recently with my bank but was told that each time they lowered my overdraft I would be credit scored and that it was a bad idea. I opened another bank account and have gotten my wages transferred there. I am then putting money into my overdrawn account each month in an effort to pay it off.

If only we'd always been this sensible with money....:o

That was part of my original question - is it worth doing this by opening another account? Is it working for you?

I actually have another Barclays current account lying empty (havn't used it for years, tried many times to get it closed but the paperwork always goes 'missing'). Would it be worth transferring my wages to that account and paying off a bit every month on the overdrawn account?

This lunchtime I sat down with the budget planner I've had for myself since last July and worked out if my outgoings for the categories I use (baby, food, bills etc) have gone down since I started putting it together. None of my outgoings have gone down. I'm so depressed about this I could cry.