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mac1989

Hi there

I have always had quite a large overdraft that I usually "live in" and I pay the monthly fees every month.

At the moment, my income is around £2400 a month but my outgoings are around £1400.00/£1500.00 (for bills only - not including food). So I usually have around £800.00 or so to play with but that will include petrol/food costs/clothes/going out/holidays/xmas etc.

My overdraft now though is £5,000 and my monthly fees are around £60.00 per month now. I had a large overdraft some years ago but got a redundancy payment and paid them off so I had a nice fresh start but over the last five years it has accumulated again and is now at £5,000. I know that I could pay off £50 at a time but it is so tempting to NOT and keep paying the fees every month.

Now I would really like to do something about it because it does keep me up at night a little. I cannot decide whether to get a credit card (where you can shift an overdraft balance onto it) and commit to that for god knows how many years at around £130 a month (though I am not totally sure my income would allow me to be accepted - because my income is made up of some wages/some benefits/some maintenance payments. My income is actually quite low (from my paid job).

However, my credit rating is very good and is almost at excellent as I printed out a report recently and the only bad thing on there that keeps it a few points away from excellent is the "rolling debt" which I believe is my overdraft. I swear if I manage to pay this off (god knows how long it will take), then I will never have an overdraft again. I feel quite ashamed and guilty over it at times and my family don't know how high the overdraft is.

I am 40 years old with a young child and I work 30 hours a week.

Any help/advise would be received gratefully.

Thank you for the time in reading this.

Former_StepChange_Rachel

mac1989 wrote: »

Hi there

I have always had quite a large overdraft that I usually "live in" and I pay the monthly fees every month.

At the moment, my income is around £2400 a month but my outgoings are around £1400.00/£1500.00 (for bills only - not including food). So I usually have around £800.00 or so to play with but that will include petrol/food costs/clothes/going out/holidays/xmas etc.

My overdraft now though is £5,000 and my monthly fees are around £60.00 per month now. I had a large overdraft some years ago but got a redundancy payment and paid them off so I had a nice fresh start but over the last five years it has accumulated again and is now at £5,000. I know that I could pay off £50 at a time but it is so tempting to NOT and keep paying the fees every month.

Now I would really like to do something about it because it does keep me up at night a little. I cannot decide whether to get a credit card (where you can shift an overdraft balance onto it) and commit to that for god knows how many years at around £130 a month (though I am not totally sure my income would allow me to be accepted - because my income is made up of some wages/some benefits/some maintenance payments. My income is actually quite low (from my paid job).

However, my credit rating is very good and is almost at excellent as I printed out a report recently and the only bad thing on there that keeps it a few points away from excellent is the "rolling debt" which I believe is my overdraft. I swear if I manage to pay this off (god knows how long it will take), then I will never have an overdraft again. I feel quite ashamed and guilty over it at times and my family don't know how high the overdraft is.

I am 40 years old with a young child and I work 30 hours a week.

Any help/advise would be received gratefully.

Thank you for the time in reading this.

Hi there mac1989, thanks for posting.

As you mentioned, it can be quite difficult to pay an overdraft off as it tends to be a ‘money pit’ that you’re living in month to month. This is especially true if you continue to use the bank account the overdraft is attached to.

We would not usually recommend using a credit card to pay off another debt. This is mainly because there may be a temptation to dip back into the overdraft once you’ve paid it off. The situation may be made more difficult however as you’d then have a credit card balance to deal with as well as the overdraft. You can find out more about overdraft debt here: http://www.stepchange.org/Debtinformationandadvice/Typesofdebt/Overdraftdebt.aspx

From what you’ve told us, I think you would benefit from some free and confidential debt advice. We can take a look at your budget and see what you can afford to pay towards this overdraft while still staying on top of your living expenses. We can also explore any possible debt solutions that may be right for you.

Our online advice tool Debt Remedy can help you put together a personal action plan in around 20 minutes: http://www.stepchange.org/Debtremedy.aspx

Alternatively, you can call our Helpline on 0800 138 1111. We’re open Mon – Fri 8am to 8pm and Sat 8am to 4pm.

I hope this helps. Please write again if you have further questions.

Kind regards

Rachel

beckiscoffs

Hello,
I have a few old debts that have b been bought by lowell. Some of these debts uave quadrupled since i first had them, presumably from lates fees etc. Do i have to pay all thos extra money or can i just pay what was originally owed to my creditors? Thanks

tiredwithtwins

Hi,
wondered if I could get some advice please?
after years and years of bad money management I have been getting myself straight financially. My credit score has been good and I haven't had any problems getting any credit for the past few years. I split from my ex a few years ago and he doesn't pay any child support for our 3 teenagers but has them to stop 2 nights a week. I recently changed jobs due to a change in my work contract (I was a sister in the NHS) and a wage dispute so my income has been quite minimal over the past few months leading me to use my Halifax overdraft facitlity (always within the limit and regular payments still going in). I also have 2 credit cards that are pretty much maxed out, and a 10k loan (with the Halifax that I used to buy a car and household items).
before my salary problems/job change I used this excellent site to look at changing bank accounts and applied to switch to first direct. As the switch date approached I realised I was going to struggle to pay off the Halifax overdraft in full so put a hold on the transfer.
the thing is, I completely forgot the date (deferred switch date 30th nov) and was only reminded when I went into my online Halifax account on monday and my account wasn't there! I phoned first direct who were very sympathetic but they said the switch had happened and couldn't be stopped. likewise the Halifax said it was too late.
when I phoned the Halifax, they said I couldn't make any kind of repayment plan on the now-closed overdrawn account until it had been passed to the collections department (which happens if the balance is not cleared within about 30 days) - I cant pay the £1500 overdraft in the next 30 days so this will obviously have a huge impact on my credit score as it will go to the collections dept.
at the age of 48 I was hoping to get most of my debt cleared in the next 12 months (I now work 3 jobs to try and boost my income) with a view to saving for another year to be able to get a deposit together to buy a house (im currently renting and its draining the life out of me).
can anyone advise me on what to do next? I seriously need to avoid a bad credit rating as it will effectively end any plan I have of buying a house, but at this precise moment in time I cant find £1500 to pay off the balance ... am I pretty much doomed?
thank you

mdunbar91

Hi there,

I am 24 and completed university 2 years ago. I have just started getting charged for my student overdraft through Bank of Scotland - £1 a day. I am currently working/traveling overseas and haven't got the money to pay it off, although i should by early next year. Is there a better option other than just gritting my teeth and paying the extra every month?! Its currently sitting at £700..

Thank you for your help!

Strummer22

If you're eligible, try and get a credit card that allows money transfers at 0% interest and a low fee. Search the Moneysavingexpert main site for 'money transfers' and read the guide.

Essentially you'll stop paying £1 a day and just pay a low fee - maybe 2% of the balance - to put the debt on your credit card. 2% of £700 is £14 - and that's all you'll have to pay to clear your overdraft SO LONG as you meet the minimum payments on the credit card and pay off the whole lot before the introductory interest free period ends.

Onmyway2

Hello,
After quite a few years trying to pay off as much as I can off my debts I have now changed tactic and am paying the minimum in order to save enough money to sell my house, pay off the debts and start over.
As I will have to move into rented accommodation for a few years (at least) I decided to do all I could do improve my credit rating ready for any checks they run.
I lowered my Argos (due to be closed in Jan 2016) & Next cards then phone CC1. They agreed to lower my limit by £3k but claimed it may negatively impact my credit score. Is this true? I was about to reduce CC2 by £4k but now I'm unsure of what to do.
I don't want to sell my house and then find no-one will rent to me as I have 2 kids and am way past sofa-surfing age.


Thanks in advance....

Farmerbaz

Hi folks. I need help with understanding a debt I have. Back in 07 I took out a £14000 car finance deal. When my circumstances changed a year later I handed the car back only to be told they had sold the car for a fraction of its worth and I had to pay balance. I ignored this for some time when out of nowhere I was contacted by merit force with whom I made an agreement to repay. Then after a time came Mckenzie hall. A new plan was put in place and all was fine. Then yet another change to idem servicing and a new plan. Which now comes to today. I had a letter from idem telling me that they were now in charge and not Arden credit. I have no idea who Arden are and never had any agreement with them. Am I being taken for a mug. No one seems to be able to tell me what my balance is. Do I really have a dent now and do I need to pay them at all? Any advice would be great. Thank you

Twit01

Help

I've got into a mess and I'm gonna struggle this month to make minimum payments but in March I can sell some shares and that will settle all my unsecured debt - is there anything I can do to minimise the effect on my credit report?

Do late payments effect your credit rating as much as a default? Only I need to get a mortgage in November

paulhughes4983

I have 2 current accounts with santander and halifax. I use one as the account for my monthly wage to go in and this is used to pay my DDs. The other is just there if i happen to put some money in now and again. Would i be better using one for pay and bills then transferring the leftover into the other for my personal spending outside of my regular monthly bills? Does it make a difference? I try to calculate things in a spreadsheet to keep eye on stuff.