Overdraft advice please!!

gemhol83

Hi I currently bank with santander and have noticed my capped overdraft is now at £20 a month when it used to be £10.

Im usually about £550-600 overdrawn Max each month and usually in the Red for about 25 days. :-(

So £20 a month seems a lot to be paying for this, am i right in thinking i would be better off with say a current account that charges a rate of say 15.9% or even as much as 20% from what i can gather i would be still be paying £10-15 a month less in overdraft charges??

Thanks your help is much appreciated!
:cool:
xxx

daveyjp

You would be better off paying down the OD. Reduce your limit every month by £50 using Santander online system and live within your new balance each month. In ten months no overdraft.

CLAPTON

well

15.9% APR on £500 for 25 days out of 30 works out as

15.9% /12 x 500 x 25 / 30 = £5.5 per month

but get rid of the OD: it reduces your credit rating as it clearly shows you can't live within your income or are a poor money manager and of course it can be withdrawn at any time

gemhol83

Thanks for the advice. Really useful.
Your right about getting rid of the OD and i never thought of just reducing it down each month by £50 thats great idea and something i will now do.

YorkshireBoy

Being overdrawn for 25 days each month suggests your bills are paid very shortly after payday (assuming monthly salaried?).

Why not move some of them (utilities etc, not interest bearing debt such as credit cards, mortgages, etc) back until just before you're paid?

Also consider using a credit card for essential monthly spend, such as groceries and fuel, to give you some breathing space, ie a 'month in hand', until you can earn more and/or spend less to get out of your current situation.