Switch Service, no overdraft!

sundevil_rachael

Hi all,

It has been a while since I have been on here but was hoping you lovely people could give a little advice.

I am trying to tackle my money problems, not problems as such but my credit cards need tackled. Long story short I thought I was being clever closing a Mastercard with a £13,000 limit with a £3000 balance to another card I had. Reducing my borrowing capacity but the down shot has been I am now nearly at borrowing capacity - I thought I was being clever - obviously it has went against me. They don't see it as me reducing available credit but more than I am now nearly maxed when I wasn't even at 50% capacity before! I did not even think there was an issue until Barclaycard suddenly took £2000 off my limit. A card I have had for 15 years, so that was a bit of a surprise as never missed a payment.

Anyway I applied to Nationwide for a new current account, Santander have taken off the travel insurance benefits and the Nationwide account would cancel out my need for breakdown cover, mobile phone cover etc!:T:T

So I applied and was accepted - yay - except they have not offered an over draft due to their 'lending criteria'. Obviously I can close the account, it is pointless opening it if I cannot switch my account. I have an over draft of £800 with santander and I am in in for half the month. My salary is reasonable as ae my outgoings.

Should I just abandon all hope with Nationwide or would there be some merit in explaining to them that I am not looking to take on new borrowing but merely switching borrowing I am not looking to take on new borrowing but obviously at the point they approve you online they don't know that, is it is did online before it asks if your looking to switch further on in the application.

I have tried calling them but it seems I need to wait until I have account numbers which will take 5 working days plus. I am not too patient and worried I am opening an account which charges £10 a month I won't be using! :rotfl:

Archi_Bald

Nationwide will probably want you as a customer (i.e. see how you handle your account) for about 6 months before they grant you any overdraft. There is no guarantee they will give you as much as you want, particularly not whilst your CRA files show outstanding overdrafts at other banks.

Overdrafts are an expensive way to borrow money. You might be better off applying for a loan. How much are you paying for your overdraft? How much would you pay for a loan?

Also, are you aware that overdrafts can be called in with literally no notice?

sundevil_rachael

I am aware that overdrafts can be called in at any point but thankfully I think the bank are quite happy to make the money they make from it (£15-20 a month) given I have never went out with it. I have had an overdraft since being a student 20 years ago and used it off and on, never had it recalled. Don't know anyone else that has too, maybe we have just been lucky.

A loan for £800 - I am not sure I would consider that to be honest. Maybe that is a lot of money but it wouldn't be an amount I would consider taking a loan out for. If my credit has became an issue which Barclays and Nationwide actions indicate then I am not sure a loan would be a clever idea.

I would be using the switching service which closes your old bank account so therefore I would be merely transfering my o/d to them. I know it is not as straightforward as that but when I changed bank 5 years previously that is exactly what Santander did.

I guess I just call them and ask, if they can't I close it as no point juggling two accounts sadly.

Archi_Bald

sundevil_rachael wrote: »

I would be using the switching service which closes your old bank account so therefore I would be merely transfering my o/d to them.

There is zero guarantee that the new bank would assume the overdraft amount & limit you had at your old account. If they did, you were very lucky.

Pleased you are aware that overdrafts can be called in at any time. Not sure I understand why you wouldn't want to take out a loan instead of an overdraft, because a loan is very likely to cost you a fraction of an overdraft. Unless you are thinking of living in your overdraft for a prolonged period of time - which sounds like an incredibly bad idea to me.

If all you use your overdraft for is £15-£20, why can't you create a £15 - £20 a £100 - £200 one for yourself, btw? Or better still, a larger one?

EDIT: sorry, I think I may have misunderstood the £15-£20 a month. If it is the charge for your overdraft, what is it in terms of APR %?

sundevil_rachael

Sorry I meant they make £15-£20 a month from me in charges, I use about £600-£700 depending on the month and usually from the middle of the month. I don't live in it, my wages take me into the green every month.

I have never taken out a loan other than a mortgage, so I don't really want to start now that is all. Given they are not willing to offer me an overdraft I don't really think I would be succesfull for a loan amount for such a little amount either.

If they don't want to match it then fair enough. I will just plod on with Santander. I am not sure I was very lucky it was matched before, the whole point of banks wanting to get new customers and encourage you to close your old current account is surely to snare you as a customer and make money. Therefore they would want to offer like for like or realise you might not switch.

opinions4u

Have you checked your credit file?

noh

Do you have any savings?

Archi_Bald

sundevil_rachael wrote: »

Sorry I meant they make £15-£20 a month from me in charges, I use about £600-£700 depending on the month and usually from the middle of the month.

£15 a month (£180 p.a.) for £600 equates to 30% APR.
£20 a month (£240 p.a.) for £700 equates to 34% APR.
A loan for £1K is presently available for under 7% APR - i.e. it would cost you no more than £70 p.a.. Less than half of what you are paying now.

sundevil_rachael wrote: »

I don't live in it, my wages take me into the green every month.

You live in your overdraft for part of the month.

sundevil_rachael wrote: »

I have never taken out a loan other than a mortgage, so I don't really want to start now that is all.

You may never have taken out a thing called a loan but you have a permanent debt, in form of your overdraft, for which you are paying a ridiculous amount of money.

Of course, you would have to pay a loan back regularly, thereby reducing your debt to zero - but that should be your plan, anyway. So your other alternative is to reduce the amount of overdraft you use gradually to zero over the space of the next 6-12 months.

BTW, what would you do if the bank decided to call in your overdraft?

sundevil_rachael

Archi_Bald wrote: »

BTW, what would you do if the bank decided to call in your overdraft?

I'd be very surprised, pay them their money and shuffle myself back to my still active Bank Of Scotland account!

You mentioned this already and I responded then. I have perhaps been unusually lucky that I have never had this happen nor know anyone who has. Maybe it happens a lot in your experience but I am unsure why the bank would do this when they are making money! If they did, such is life and I would move.

sundevil_rachael

opinions4u wrote: »

Have you checked your credit file?

Not for a while, I probably should! I live in a part of Scotland which expresses it's flat numbers non post office standard which not only causes headaches with companies but also in getting my credit report which I can never get online and always have to get through the post.

With hindsight I have moved in the last six months, not yet on the voters roll and just changed mobile phone contract. I should be surprised I got the account when I think about it.

sundevil_rachael

noh wrote: »

Do you have any savings?

Not to cover the over draft. I am just going to speak to Nationwide and see what they say. If they won't match it and then close the Santander account (through the switching service) then I just close the account in the 14 day cooling off period and keep paying for travel insurance and car breakdown.

I had hoped someone might have had similar experience that is all.

Thanks