Halifax are giving me 2 weeks to pay off my £1,800 overdraft!

kaylz39

Hi Everyone,

So like most people my age (I think) I seem to live in my overdraft. I got it 5 years ago when I was a student, it was only around £500 back then but Halifax kindly increased it each year for me. Most of the time I didn't even realise, but managed to spend it!

So last week I received a latter off them basically saying 'we've reviewed your financial status and have decided to withdraw your overdraft from the 4th of August'. To be honest I half thought it was an idle threat so called them and they are indeed removing it completely.

So they've given me just under 2 weeks to pay back £1,800. I get paid tomorrow and my wage will just about cover the overdraft, leaving me with very little to live off in the month of August. I know in the long run they're doing me a favour but I've got a holiday to pay for tomorrow (£700) :0

I know they're well within their rights to do this (she told me many times) but I was so annoyed that they can do this to someone! I asked if there was an option to repay it back each month but she said it would go through debt management (I'm going for a mortgage in a month or so, so knew this wasn't a good idea). She also advised to open a credit card?! I just cant believe in this current climate they would basically encourage people to get into even more debt.

Oh and if I do go into my overdraft again, they'll charge me £5 a day!

My Mam opened this bank account when I was born, so 25 years ago. All my money goes is and out of it and I've never caused them bother. So I'm almost tempted to change bank accounts, after all with no overdraft they're supplying me with no other services the likes of Santander, Barclays could offer me!!!

Anyone else had a similar experience?

dt3887

if they have

'we've reviews your financial status

and decided to withdraw your OD, i would guess who are in some sort of financial difficulty, or not in the best finincial position? if this is the case, what are your chances of actually getting that mortgage?

kaylz39

Well I've actually thought about the wording of this and I really don't understand how they've decided on this.

I'm on an above average wage & pay my bills on time. In the past I had a number of store cards which I always paid on time. I recently consolidated them onto 1 interest free card around 4 months ago- the balance on this is now £1,500 and I have no other debt (I did have a mobile phone which the contract ended in June so I only use my work mobile now).

I have about 4 direct debits which leaves me with around £800 each month- half of which goes into an online savings account. Fair enough, I have a major shoe addiction but everything is paid on time.

Regarding the mortgage we had one agreed in principle (I think that's what it's called) 4 weeks ago- just trying to find the right house.

I asked the lady I spoke to the same question, but she said she couldn't tell me the reason why.

guesswho2000

kaylz39 wrote: »

Hi Everyone,

So like most people my age (I think) I seem to live in my overdraft. I got it 5 years ago when I was a student, it was only around £500 back then but Halifax kindly increased it each year for me. Most of the time I didn't even realise, but managed to spend it!

So last week I received a latter off them basically saying 'we've reviews your financial status ans have decided to withdraw your overdraft from the 4th of August'. To be honest I half thought it was an idle threat so called them and they are indeed removing it completely.

Is there anything in your financial life which could have triggered this? Have you defaulted elsewhere, missed payments, not paid money into that account? These may be reasons they've done this.

I always try not to be overdrawn at all, simply because they can ask for repayment on demand - a credit card or loan cannot do this, they're more flexible.

kaylz39 wrote: »

I asked if there was an option to repay it back each month but she said it would go through debt management (I'm going for a mortgage in a month or so, so knew this wasn't a good idea).

Correct, if it gets marked as AP (arrangement to pay) on your credit file, mortgage lenders are likely to look at this negatively (even though you are trying to pay it back).

kaylz39 wrote: »

She also advised to open a credit card?! I just cant believe in this current climate they would basically encourage people to get into even more debt.

This might actually be a good idea, if you do your spending on that and use the cash to repay the overdraft; if you get a 0% card then it might even work out cheaper.

kaylz39 wrote: »

My Mam opened this bank account when I was born, so 25 years ago. All my money goes is and out of it and I've never caused them bother. So I'm almost tempted to change bank accounts, after all with no overdraft they're supplying me with no other services the likes of Santander, Barclays could offer

Similarly, opening another current might be a good move - they may offer you the overdraft Halifax have withdrawn.

Both of those options (CC or new CA) may well be out of the question depending on your answer to point one; if your credit history is marked in some way that is.

guesswho2000

kaylz39 wrote: »

Regarding the mortgage we had one agreed in principle (I think that's what it's called) 4 weeks ago- just trying to find the right house.

Also, don't rest your hopes on this, the AIP is, quite often, not worth the paper it's printed on - they may make their decision without consulting CRAs, which they will definitely consult for full application - if something is amiss there, then it'll be a decline.

Have you checked your report with Equifax, Experian and Callcredit? I'd suggest this is your first step

kaylz39

guesswho2000 wrote: »

Both of those options (CC or new CA) may well be out of the question depending on your answer to point one; if your credit history is marked in some way that is.

I have worked really hard to get my store cards etc down and have 1 credit card now & I really dont want to increase on this.

I probably have missed payments before i.e. mobile phone bills but it would have been a long time ago. Before I had my OD increased or had a new phone contract.

I cant see why this would all of a sudden effect me?

kaylz39

guesswho2000 wrote: »

Also, don't rest your hopes on this, the AIP is, quite often, not worth the paper it's printed on - they may make their decision without consulting CRAs, which they will definitely consult for full application - if something is amiss there, then it'll be a decline.

Have you checked your report with Equifax, Experian and Callcredit? I'd suggest this is your first step

Oh god, I'm nervous now!

My Husband is very good with money as he has his own business- so I fully expect him to be carrying me for alot of this.

I haven't checked my credit file as I don't want anything to effect getting future credit. As its running another credit check will they not look at it as if I was applying for MORE credit?!

pinkteapot

kaylz39 wrote: »

I have about 4 direct debits which leaves me with around £800 each month- half of which goes into an online savings account.

Can you withdraw money from your savings account to cover the overdraft?

You said in your first post that they are encouraging you to get into more debt by taking out a credit card. They're not though. Not if you get a credit card and then spend on it what you used to spend using your overdraft. You'll get into the same amount of debt next month as you were going to anyway, just using a card instead of an overdraft...

Checking your own credit score won't count as a 'credit check' so do it now. If you've any missed payments (including mobile phones) in the last six years then it could affect your mortgage application. If you do get turned down for the first mortgage you apply for, ask them why and then post on the Mortgages & Endowments board for advice on lenders you can try.

kaylz39

pinkteapot wrote: »

Can you withdraw money from your savings account to cover the overdraft?

You said in your first post that they are encouraging you to get into more debt by taking out a credit card. They're not though. Not if you get a credit card and then spend on it what you used to spend using your overdraft. You'll get into the same amount of debt next month as you were going to anyway, just using a card instead of an overdraft...

Checking your own credit score won't count as a 'credit check' so do it now. If you've any missed payments (including mobile phones) in the last six years then it could affect your mortgage application. If you do get turned down for the first mortgage you apply for, ask them why and then post on the Mortgages & Endowments board for advice on lenders you can try.

Thank you for this.

I just thought applying for another credit card would be a bad move.

They money I have in savings has virtually gone now, have to pay off the holiday tomorrow, had a ridiculous vet bill to pay & the hen weekend I mentioned! It wasn't a huge amount, but was a start.

I'm going to apply for my credit file now, does it explain to you what is good and what is bad?

guesswho2000

kaylz39 wrote: »

Oh god, I'm nervous now!

My Husband is very good with money as he has his own business- so I fully expect him to be carrying me for alot of this.

I haven't checked my credit file as I don't want anything to effect getting future credit. As its running another credit check will they not look at it as if I was applying for MORE credit?!

Sorry didn't mean to worry you as long as your history is ok then you should be fine, it could be something as simple as Halifax changing their lending policy!

To put it into perspective, Nationwide gave me a mortgage but won't put an overdraft on my Flexaccount, NatWest allowed me to have a £6,000 overdraft limit and £7,650 credit card limit over two cards. Each lender has their own criteria.

It could be something as silly as them seeing a reduction in the amount you owe, leaving more available credit, giving you the potential to go on a massive spending spree!

Checking your credit file will have no effect on your rating, although if you're applying for a mortgage I'd be careful - one search won't hurt - but don't make any applications after you've made your full mortgage application until after you've completed on the purchase. :beer:

kaylz39

guesswho2000 wrote: »

Sorry didn't mean to worry you

No, don't worry about it! It was probably a waste of time having this done then, just incase we don't find anything we like at this time. I'm just so wary about applying for credit now, I just know lenders are scrutinising everything people do and declining on the simplest of things!