Best Current Account advice

Mikeyleec

Hi all.

I'll try and keep this to the point, and hopefully someone might be able to help...

• I currecntly have a Graduate Bank Account with Lloyds TSB.
• The overdraft limit is 2k, which I am close to, however I do have savings.
• I earn roughly 24k a year, which I have £1,400 entering my account each month and the reason I want to switch accounts is because I am paying overdraft interest p/m.

So, what I'm looking for is to hopefully to switch accounts to a bank that will hopefully not charge for using an overdraft facility. I know this is rare, otherwise my other option is to save up and clear the overdraft. Any how, if anyone has advice on switching to an account which has an overdraft facility with next to no charges for use of it, that would be much appreciated.

Mikeyleec

Bump
Bump
Bump

Gromitt

Wouldn't it make more sense to use your savings to pay off the overdraft, so your interest will be less?

DreamerV

If you are close to 2k in overdraft, and only have 1400 coming in, does that mean you never have a positive balance?

If the above is the case I'd save to pay off at least around £600 to make sure you balance reaches positive balance now and again. Overdrafts are repayable on demand, and it's best not to live in your overdraft. Personally I'd think about saving up to pay it off in full - it just loses you money, unless you have a cheap overdraft facility where you can take the money and use it to fund an account that pays higher net interest.

I just opened a First Direct Account with £250 free overdraft (you can have another £250 but it's not free). They can impose a charge after a year for the following year but they would let you know in advance.

I would think on 1.4k net monthly, if you have no other debts (apart from student loans) and do not have dependents, that you would be able to put at least a couple of hundred each month towards the debt (unless you are living in the South - I sometimes forget how cheap Scotland and the North of England is in comparison to London and surrounding areas).

Mikeyleec

I have roughly £500 in my savings account, (this is after paying for a three week holiday to Asia) I've looked around and noticed that the Santander 123, and normal current account offer the first four months at interest free. I will look into switching there.

I have been paying off other debts, and I hope that this year I can clear the overdraft. I will be able to save and then pay it off with savings I'm sure.

Mikeyleec

DreamerV wrote: »

I just opened a First Direct Account with £250 free overdraft (you can have another £250 but it's not free). They can impose a charge after a year for the following year but they would let you know in advance.

I looked at that the First Account one, they offer an 8% savings account as well. Once the overdraft is cleared I will be looking into this more.

DreamerV

Mikeyleec wrote: »

I looked at that the First Account one, they offer an 8% savings account as well. Once the overdraft is cleared I will be looking into this more.

I have just opened one of those 8% Reg Savers and am in my 1st month. Just remember if you save the max (£3600) and you don't earn on the money not yet invested (e.g. it's still with your employer waiting to get paid to you as wages) then it's the equivalent interest of about 4.33% if you'd put in a lump sum of £3600. It's still great, but perhaps not as great as it looks at first. If you do sign up, you can get a referral through someone (not necessarily me, although feel free) and split their £50 bonus, and if you put in £1500 a month and switch dds to it, then you get another £100 bonus (for the current account). And the staff answer the phone in about 3 or 4 rings Anyhow I'm sure you will look into it further nearer the time.

dixon-bainbridge

Mikeyleec wrote: »

I have roughly £500 in my savings account, (this is after paying for a three week holiday to Asia)

I hope this doesn't sound harsh but I think you need to have a change of priorities and a look at how you budget your money rather than a change of bank account. Surely you could have used the money in your savings to pay off your overdraft rather than going on a 3 week holiday to Asia? - a holiday is lovely but surely paying your debts is the priority.

Have you considered opening a 0% purchases credit card? You could use this to spend on while using your salary to pay off the overdraft. Once that is paid off you can then tackle the credit card debt which you can move again to another 0% BT card if need be - just a suggestion.

mgdavid

dixon-bainbridge wrote: »

I hope this doesn't sound harsh but I think you need to have a change of priorities and a look at how you budget your money rather than a change of bank account. Surely you could have used the money in your savings to pay off your overdraft rather than going on a 3 week holiday to Asia? - a holiday is lovely but surely paying your debts is the priority.

Have you considered opening a 0% purchases credit card? You could use this to spend on while using your salary to pay off the overdraft. Once that is paid off you can then tackle the credit card debt which you can move again to another 0% BT card if need be - just a suggestion.

:yeah that:
especially the first paragraph - every word of it.

You could try an evening class in economics and business too; why on earth do you think a bank would give you an account with a free overdraft if your history is that you always owe them a grand on average?