Stepping down an overdraft?

James-F

I've recently had a pay rise at work which has left me in the nice position that I have enough left over at the end of the month that my £1300 OD is going down by £50-£100 each month.

Now, I'm a realist and I know if I try to wait until the OD is gone and then cancel it, something or other will come up and I will end up needing to use it. As such I want to remove that possibility.

As far as I can see it, I have 2 options:
1. Step the OD down every couple of months
Cons:
It will (I assume?) add an entry on my credit report each time I do this
Assumes that Barclays will agree to drop the OD - I'm given to understand that its treated as a new request for an OD. I've had this one for years, from back when they came free with cereal, so I doubt I'm actually eligible for say, a £1000 OD nowadays.

2. Take out a loan:
Cons
Will cost me more in interest
Less control - with the above method, the only commitment I'm under is the one I set myself

Now, I should clarify so that I'm not wasting anyone’s time - I'm not struggling for money, the interest on the OD is less than £15 a month. As such, I won't be selling the car or taking a second job - basically anything that is more inconvenient that spending £15 a month isn't worth it.

So, after that long winded post, I guess my question boils down to this: Are there any alternative options I'm missing? Am I right in my assumptions about stepping down an overdraft? Are there any other cons I need to be aware of?

opinions4u

Self discipline. That's the best option.

An overdraft limit is not a spending target. It is a reassuring buffer that is only to be used as a last resort.

Carry on reducing the debt and don't let it rise again.

SneaksyWhippet

What about spending on a 0% credit card rather than the account with the OD until your OD is cleared and any remaining debt you have is at 0%. This will save you £15 per month. Keep your OD account above £0 and use your extra £50-100 per month to clear the credit card balance before the 0% rate ends. Then after that...try to be disciplined and stay out of the overdraft!