Halifax want me to repay my overdraft

kmh88

Hi

I have an overdraft on my ultimate reward account (which I pay a monthly fee for) with Halifax of £1,950.

My salary is paid into this account each month but covers my monthly living so I am always at my limit at the end of the month, but don't tend to go over it.

Because of this I pay fees of £1 a day for each day I am overdrawn, not ideal but needs must. I have received a letter today which says that my planned overdraft arrangement will come to an end on 13th June.

I called Halifax straight away and asked how this is going to work and was told to call them on 14th June and see if I could have the overdraft reapplied, if it does not automatically renew. They could not give me ant more information than this.

Given that if they decide they won't reapply it I need to find £1,950 over the next few weeks I could have done with a bit more advice.

Has this ever happened to anyone? I'm ver worried about it.

Thanks

Pard_2

Can you not apply but for a 0 percent credit card and balance transfer it?...just as a safe option
£30 a month overdraft is still relatively expensive

grumbler

kmh88 wrote: »

...Has this ever happened to anyone?

Overdrafts are intended for a short-time borrowing and are repayable on demand. Obviously, banks don't like customers staying month after month near their limit with no means of repaying the debt.

The_pc_tech

Pard wrote: »

Can you not apply but for a 0 percent credit card and balance transfer it?...just as a safe option
£30 a month overdraft is still relatively expensive

You can't balance transfer an overdraft, what you are talking about is a money transfer, I know MBNA do this on their cards as do Barclaycard I think but not sure of any others that do.

The OP really needs to try and cut down their spending to get out of living on their OD, I went through a stage of doing this myself and it used to scare me when it came up to review time which in my case was January.

matttye

grumbler wrote: »

Overdrafts are intended for a short-time borrowing and are repayable on demand. Obviously, banks don't like customers staying month after month near their limit with no means of repaying the debt.

Sounds like something banks would love, interest paradise! But given that Halifax charges a flat fee I can see why they wouldn't like it.

MoneySaverLog

The_pc_tech wrote: »

You can't balance transfer an overdraft, what you are talking about is a money transfer, I know MBNA do this on their cards as do Barclaycard I think but not sure of any others that do.

The OP really needs to try and cut down their spending to get out of living on their OD, I went through a stage of doing this myself and it used to scare me when it came up to review time which in my case was January.

Not directly but you could do the money transfer on one card. Then find a card that will do 0% APR balance transfer and then transfer again to that one

JuicyJesus

matttye wrote: »

Sounds like something banks would love, interest paradise! But given that Halifax charges a flat fee I can see why they wouldn't like it.

The OP would need to be at their limit for nearly 5 and a half years for Halifax to make back the money they'd lose from the customer defaulting, which is why they've taken the action they have. And that's assuming that that's all profit - a standard overdraft interest rate on that amount would be about £30 anyway, so that's most likely not the case.

There's also the issue that people who are that far into their limit have an unfortunate tendency to switch their salary away and abandon the account, which leads to the fees mounting up and creating a bigger debt. This instead gets !!!!!! in gear towards repaying the debt.

Gromitt

matttye wrote: »

Sounds like something banks would love, interest paradise! But given that Halifax charges a flat fee I can see why they wouldn't like it.

£30/month on an overdraft of 2K is about 18%, about right for overdraft interest, not really giving anything away.

I think they are more concerned that the customer is going to walk in one day and say "I can't afford to pay the fees any longer, I'm defaulting".

JuicyJesus

Gromitt wrote: »

I think they are more concerned that the customer is going to walk in one day and say "I can't afford to pay the fees any longer, I'm defaulting".

Like I said, they often now don't even bother walking in, they just move their direct debits and credits over to a new account and flick the old bank the Vs.

opinions4u

kmh88 wrote: »

I have an overdraft on my ultimate reward account (which I pay a monthly fee for) with Halifax of £1,950.

Unfortunately your monthly fee is not a guarantee of never ending credit.

My salary is paid into this account each month but covers my monthly living so I am always at my limit at the end of the month, but don't tend to go over it.

You don't tend to? Or you do occasionally? If the latter I'd suggest you are now finding out an additional consequence on top of the odd £5 a day charge.

Because of this I pay fees of £1 a day for each day I am overdrawn, not ideal but needs must. I have received a letter today which says that my planned overdraft arrangement will come to an end on 13th June.

I called Halifax straight away and asked how this is going to work and was told to call them on 14th June and see if I could have the overdraft reapplied, if it does not automatically renew. They could not give me ant more information than this.

It looks like the decision is made. They want their money back. While you are probably best advised to check again before the overdraft ceases you will soon be in a position where you are in breach of the T&CS of your account.

Given that if they decide they won't reapply it I need to find £1,950 over the next few weeks I could have done with a bit more advice.

The advice is simple. Pay it all back or re-contact them when the facility is finally removed. I'm not quite sure what you were expecting.

Has this ever happened to anyone? I'm ver worried about it.

It's not uncommon. An overdraft is repayable on demand. At some point you've spent nearly £2k more than you've earned and are not showing any inclination towards paying it back.

If you don't meet their deadline you will damage your credit file. So if you can raise the cash to repay the overdraft (loan, credit card super balance transfer etc) this will benefit you.

If you can't, you will need to come to some arrangement with them to reduce the balance. That process starts on 14th June.

Whichever route you go down you need to overhaul your finances. Start spending less than you earn and start reducing your debts.

1. Go to https://www.makesenseofcards.co.uk

2. Complete a statement of affairs.

3. Work out what non-essential spending you have and eradicate it now. Often things like Sky and an expensive phone deal an swallow up £100 a month. Making your own sandwiches instead of paying £3.50 a day can save a wedge. Cutting out the Starbucks coffee and replacing it with tap water saved a mate of mine £80 a month.

4. Post your SOA on the Debt-free Wannabe board and ask for help.

5. Sell stuff. eBay, Music Magpie etc. Use the cash raised to reduce your debt.