Stuck In Overdraft

DarylHume

Hi All

I'm after some advise if you could be so kind.

I have a bank account with Halifax and , after having a £2000 overdraft have been able to reduce this to £1500
The account fee is £15 per month and I'm also paying £1 per day arranged over draft fee, so on average paying £40 - 42 per month to Halifax

I have just applied, and called Nationwide to try and get the Flexdirect account (0 overdraft fee's for 12 months) but unfortunately they were only willing to offer an overdraft of £750

On the off chance, I then rang Halifax asking them to match the Nationwide offer, but they said they cant do that

I have been taking steps to reduce my outgoings, and MSE has been helpful as have changed my energy supplier. I have also changed my mobile tariff to the lowest available, so the last bit of 'wasted money' seems to be the overdraft fees

Any thoughts or suggestions on other accounts / banks that would be willing to work with my requirements?

Many Thanks
Daryl

YorkshireBoy

3 approaches:

Earn more
Spend less
Restructure the debt

Seems like you're trying to spend less, so what about the other two?...

Can you increase your income?

How about trying for an MBNA credit card. 0% for circa 30 months on money transfers into your current account. There's a 4% one-off fee payable. Even if you only get a £1K credit limit, assuming you've taken Nationwide up on their offer, job sorted...isn't it?

Another restructuring approach is to spend less time in your overdraft each month at Halifax. How about pushing your bills back later in the month? Be careful with interest bearing debt such as mortgage, loans, etc...but do look at utilities etc. Maybe a credit card would help here. Spend on that and then settle at the end of the month, ideally the day before payday using the overdraft facility.

grumbler

What are you paying £15 fee for?

YorkshireBoy

grumbler wrote: »

What are you paying £15 fee for?

The Ultimate Reward account (at a guess)?

grumbler

Then the question arises what benefits are really needed and whether it's worth paying £180 p.a. for them.

Cyrus

I second the MBNA 0% credit card approach, take the hit of the 4% transfer fee and pay the balance off over the next 30 months not having to worry about any kind of interest.

YorkshireBoy

Cyrus wrote: »

I second the MBNA 0% credit card approach, take the hit of the 4% transfer fee and pay the balance off over the next 30 months not having to worry about any kind of interest.

I didn't mention it above, but this card will require a £25 per month minimum payment...so OP's outgoings won't reduce dramatically (but will actually clear their debt, not simply leave them standing still).

DarylHume

Many thanks for the replies

Re the idea of pushing my direct debits back, cant believe I didn't think of this myself! I have always religiously paid my DD the 1st of the month so i knew what cash I had left to play with. Will definitely look into this

Re the MBNA card, this is where I start to look clueless. Never owned a credit card, so assuming I got one:
- how do I transfer my OD onto the card?
- do I then literally leave the card active (but unused for any other purpose) and make regular monthly payments to reduce the balance to nil?
- When the OD is transferred to the card, is it as simple as applying for the Nationwide account, transferring my DD and that's that?

YorkshireBoy

DarylHume wrote: »

- how do I transfer my OD onto the card?
- do I then literally leave the card active (but unused for any other purpose) and make regular monthly payments to reduce the balance to nil?
- When the OD is transferred to the card, is it as simple as applying for the Nationwide account, transferring my DD and that's that?

In order...

- http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs

- Yes

- Yes (if that's what you want to do). If you know someone else with a Nationwide account they can refer you for the account and you both get £50 once you switch). Details here...http://www.nationwide.co.uk/products/current-accounts/landing-page/recommend-a-friend

grumbler

DarylHume wrote: »

how do I transfer my OD onto the card?

The CC pays money to your current account: Money Transfers

- do I then literally leave the card active (but unused for any other purpose) and make regular monthly payments to reduce the balance to nil?

Yes

DarylHume

Many thanks again YorkshireBoy and grumbler!! Absolute legends, the help and advice has been fantastic

To avoid the whole wasted money issue (i.e interest or OD charges) from looking at other options, the best way to proceed, is:

take the MBNA card
transfer the full £1500 OD to the card at 0%
pay £25 minimum every month
move the balance to a different card before 0% period ends

Without your help , unlikely I would have discovered this solution :beer: