Dumb blonde seeks banking advice...

cluelessjen

Hi

My graduate account with HSBC has come to an end after 3 years, but unfortunately I am not (as I'm sure HSBC would like me to be) in a high flying career.

In fact the opposite applies and I am a struggling actress with an overdraft to show for it. I'm currently £1200 overdrawn on this account with a £1250 limit - ouch.

The lovely glossy literature I received today explains that my account will be switched to a standard current account on the 15th July and any overdrawft I have (haha) will be charged at the typical rate of 18.3% EAR variable*

I have two questions:

1. What does this mean? Obviously more expense, but how serious is it?
2. What can I do about it?

Surely I can't switch accounts with a totally obliterated overdraft? Any other advice would be most appreciated.

Thank you, please excuse my ignorance - useless with money!

Jen

RichyRich

1. For every £100 of debt you have you will be charged circa £18.30 per year for it.

2. You can switch accounts. Alliance & Leicester offer a 0% interest free overdraft for 12 months, and something like 5.9% afterwards. Or you could take a loan to pay off your overdraft, or transfer it to a 0% credit card and pay it off that way.

Banks love people to have overdrafts - they make a fortune out of them.

Martin's "Best Current Accounts" article should help.

Good luck!

Rich x

cluelessjen

Hi Richy - thanks for the advice

I called A & L today but unfortunately to quality for the Premier Account with interest free overdraft you have to guarrantee £500 of funds into the account per month.

Due to the nature of my job, sometimes this is possible, other times no chance! Do you know of any other accounts that offer interest free or low interest overdrafts that might be suitable for me?

Apologies if this sounds really lazy - i just figure I might as well ask the expert before I go down a rat hole...

Many thanks

Jenny

cluelessjen

Oops! Didn't see the 'Best Current Accounts' bit. Will check it out now...

KTF

A&L wont match your overdraft unless you have been in credit a few times over the past few months.

Other banks do offer lower overdrafts but whether they will offer you one/match it will depend on your circumstances so you would have to speak to them once you have done your research.

JohalaReewi

cluelessjen wrote: »

Hi Richy - thanks for the advice

I called A & L today but unfortunately to quality for the Premier Account with interest free overdraft you have to guarrantee £500 of funds into the account per month.

There is nothing to stop you paying in £500 and taking it out next month then paying it in again as the £500 for the next month. So as long as you have got £500 to play with you can keep taking it out and paying it in to meet the requirement.