Budgeting with Overdraft

James1980

Hi All,

I am trying to get myself out of large overdraft to hopefully help in regards to house purchase at some point in the future..

but I was wondering.

Are you best to reduce your overdraft when you get see a little light between what you need and the overdraft max. or should you try and budget it more mentally and keep the overdraft at its full amount but try and get out of it with proper will power

Own_My_Own

James1980 wrote: »

Hi All,



but I was wondering.

Are you best to reduce your overdraft when you get see a little light between what you need and the overdraft max. or should you try and budget it more mentally and keep the overdraft at its full amount but try and get out of it with proper will power

I have in idea what you mean.

James1980

you mean NO idea right

Ok for example.

£1000 overdraft.
£800 spent on it.

Should I call the bank and get them to reduce it to £800... and then in after each pay day, reduce it by another £200 until its gone.

or am I best to keep the Overdraft at £1000, and then just make sure i make sure I do not go back into it after a few pay days and getting out of it?

innovate

If you need the help of the bank to get out of the overdraft, then get them to reduce your limit. Though there have been reports that some banks won't do that, and some (all?) will do a full credit check if you apply for a changed limit.

If you want to save for a house, don't you have enough incentive not to spend money that isn't yours? And that costs you a fortune every month? It's not compulsory to max your overdraft, or even to use it at all.

Own_My_Own

Yes I meant no :rotfl:

You are better off keeping the overdraft at £1000 and budgeting.

You would hate to reduce it then find your washing machine breaks and you have nowhere to get the cash for a new one.

I have an overdraft that is just there incase. I don't use it but feel more comfortable knowing it is there.

By not using it you will proof to your self you can budget . If you can't do it then think about reducing it.

If you need help budgeting post a SOA on here and get some advice on it.

Niv

Dont do it James it will screw up your credit rating.

James1980

Niv wrote: »

Dont do it James it will screw up your credit rating.

Dont do what part?

the reducing the overdraft everytime i get a little lower. or just dont do it in general, keep the debt and keep on spending lol.

YNWA also

Own_My_Own

James1980 wrote: »

Dont do what part?

the reducing the overdraft everytime i get a little lower. or just dont do it in general, keep the debt and keep on spending lol.

YNWA also

On a credit check it doesn't say that you asked to decrease the overdraft. It just shows amounts being withdrawn from you. Which would then look like the bank withdrew them because you couldn't handle the debt.

CLAPTON

Very confusing to use the word 'overdraft' to mean both the overdraft facility limit and the fact of owing money to the bank.

In general it's a bad idea to reduce your overdraft limit but an excellent idea to reduce you actual overdraft.

Firstly if you reduce your limit to very close to the actual usage you may accidentally go over the agreed limit and incur charges
Secondly, although it depends upon the bank, the bank may re-assess you when you ask for a lower limit and decide you no longer qualify for any OD.

James1980

thanks for all the helpful information, think will pass on asking for it to be reduced and will just work on it and not let it get back where it once was.. and if the bank decides to withdraw the facility when i get back to the where it should be then so be it, mission complete

opinions4u

I think I must be on drugs.