Switching accounts whilst overdrawn

mippy

After years of poor money management and a rubbish credit rating, I'm now spending less, paying off debts and finding that not only are credit limits increasing without me asking (thanks to throwing money at my credit card balance until it goes away) but institutions which previously would not offer me a bank account now will. Hooray!

So I am thinking of switching from Santander to First Direct. The problem is that I have an overdraft in my Everyday Current Account of £1750. I plan to pay this off after my credit card balance is gone, but what worries me is whether the cost of having this overdraft will increase if my salary is no longer being paid into this account (eg. if my salary gets paid into a First Direct account and I transfer money in each month until it's all paid off).

In the past, they charged an interest rate-based fee rather than a fixed overdraft fee (which is currently £1 a day capped at 20 days). They said then on the statements that you had to credit a minimum amount into your account each month to benefit from this 'preferential APR'. But since they switched from this to a daily fee, I can't find any information about needing to pay in a minimum amount each month. I've searched the website but all it's telling me is how much they charge in terms of monthly fees which isn't helpful.

(I do note that First Direct will offer me a £250 fee-free overdraft if I want to take it on signing up, but I'm not sure having an overdraft at two different banks is a good idea!)

So basically I am wondering whether the cost of my overdraft will increase if I get my salary paid into a different account. I'd prefer it not to cost more whilst I'm paying it off, but at the same time a whole string of issues with Santander have made me want to switch for years now. Any advice?

mippy

Oh, and yes, I know that is a massive overdraft. Hence wondering about the best way of getting rid of it. I asked Santander if they could arrange to reduce it by a fixed amount each month, and they said only if it was in some kind of collections process. So at the moment it seems easier to me to transfer all the money to pay it off back into the account, reducing the likelihood that I'll accidentally spend it instead (I have bipolar disorder and so there are periods where I'm not entirely organised when it comes to budgeting - so it's a big deal for me to get to the point where I can start making these types of changes!)