How to get out of an overdraft?

Seagull_Rob

Apologies if this is not the correct segment in which to write, but I couldn't see any groups on current accounts.

My query to you guys is, how do I get my overdraft down?

I'm with Nationwide and have a Flex-Account. I am 90-95% living in the overdraft throughout the month. I get paid, am then in black by £100 or so, then slowly go down to my overdraft limit which is £1,950. Recently I have paid off two loans, so I was wondering how to get out of this overdraft and live permanently in the black!

My possibilities I suppose are:

1. Transfer banks and pay off Nationwide every month until £0
2. Transfer the debt to a credit card

What do you chaps think is the most sensible approach here?

Thanks very much.

Rob

Rafter

Rob,

Get yourself over to the debt free wannabe board.

Ultimately you have to spend less each month that you have coming in and set yourself a realistic target to get your overdraft down.

If you aren't strong willed enough to do that, and your credit rating is good, you could get a loan or 0% credit card and use that to get your overdraft down, at the same time asking nationwide to reduce your limit to say £500 for emergencies.

The key is to pay off most expensive debt first. So if you already have credit card debt costing you more than your overdraft you should prioritise that.

The key though it setting out your debts and outgoings, working out how much you can realistically save or repay each month and then setting yourself a target and sticking to it.

Good luck.

R.

R_P_W

spend less and/or earn more?

DCFC79

Rob there is a current accounts forum but your best bet if the DFW and post a SOA. You need to cut back on your outgoings to have a chnace of reducing the OD.

StuC75

hold back some of the money each month... even if just £50/100 (so moves 1950/1850/1750... and so on)... just because you have the facility doesnt mean you HAVE TO use it ALL!!

Would avoid the other suggestions as you may..

Bank - end up with another overdraft
Credit Card, you will end up with Credit Card Debt and Back into the overdraft..

need to use this as the fabled 'light bulb moment' (what a cliche!)..

PollyOnAMission

My reply from a recent similar thread:

I was in a smiliar position to you a few months ago: always in my overdraft, almost back to £0 on payday then back into my overdraft again for the following month.

I took out a credit card with 0% on purchases. For a few months I did all the spending I could on this card, repaying just above the minimum each month. I also (now this bit is very important!) started to keep a spending diary, began budgeting better and really cut down on unecessary spending. I also did the usual switching energy suppliers etc, to reduce my monthly bills as much as possible (these had to come out of the current account with overdraft, rather than go on the credit card).

After a few months of this my overdraft was cleared and I was back to £0 BEFORE payday rather than after! My credit card balance was lower than my overdraft had been, because I had really cut my spending.

My debt is now all at 0% and I have set up a direct debit to pay off a chunk each month, so it will be paid for by the time the 0% ends. I no longer use the card and I have maintained my budgeting and spending diary. I do all my day to day spending on a cashback credit card and pay this back in full every month; my budgeting means I can afford the amount from my pay cheque, as well as the payments to the 0% card.

Just before payday I transfer any left over money that month into an instant access ISA; I effectively live "pay cheque to pay cheque", but have started to build up a pot of savings that is getting a reasonable amount of interest.

Once the 0% balance is paid off, I will be transfering the extra money each month to an ISA rather than spending it. I figure that unless I stick to these new habits I will end up back where I started!

Whole thread is here:
https://forums.moneysavingexpert.com/discussion/4069021=

Rakaposhi

I have been doing the same as Polly since May. Its a wonderful feeling to be in control of your finances and watching your savings (rather than debts) growing each month.

If you havent had your lightbulb moment yet, have it soon

27col

Many years ago my brother said to me that he never had any money left over at the end of the month to put into savings. I told him that you don't save what is left at the end of the month, you save an amount at the beginning of the month and spend what is left. He thought that this was a revolutionary idea and tried it out with a reasonable amount of success. The save first concept was certainly his LBM.

boredofbeingathome

One of your other options could be, to open a basic bank account and transfer your monthly spending into that one. Leaving the balance to go off the overdraft each month. Get a spending diary as others have said and with discipline you could see your overdraft go down. I would also look at everything you spend and try and get the best deal you can on all utilities. Get over to Old style board and draw up a budget for groceries, then try each month to better it. Don't be satisfied with how much you save each month, keep on revising deals, etc. Look for cashback deals on all major purchases. I also love the idea of save first. Lots of advice on all the boards. It can be done. Good luck.

Okydoky25

Can you not knock off an amount each month on payday. For example drop the overdraft by £50 each month or what you can afford?

bargainbetty

Call them on payday, and ask them to reduce your overdraft by £100.

During the month, look at your expenditure versus your income, and see how you can reduce your outgoings. Tighten your belt a bit, cut back on luxuries etc and see if you can reach your next pay day without hitting the new OD limit.

Repeat as necessary. Do not take out more debt to settle this debt - just cut back on what you spend.