Stuck In Overdraft

YorkshireBoy

DarylHume wrote: »

pay £25 minimum every month

Why not pay £40-42 per month (by either downgrading the URCA or moving your banking elsewhere)? That'll leave just £200 or so after 31 months...but with your other efforts I'd expect the entire £1,500 will be cleared well before the end of the MBNA introductory period.

Albert_Tatlock_2

Are you also going to bin the Halifax account which you're paying £15/month for?

As an example, Santander 123 will give you up to 3% Interest and will also pay Cashback on Direct Debits such as the Elec/Gas and Phone that you mention (providing you pay in minimum £500/month - not clear if you do from the post so far)

You can turn this thing around and have your banking make you money rather than the £42/month it's costing at present!

Thrugelmir

Convert the overdraft into a loan. Merely rolling debt over doesn't provide a solution. Just delays the inevitable.

DarylHume

Albert_Tatlock wrote: »

Are you also going to bin the Halifax account which you're paying £15/month for?

As an example, Santander 123 will give you up to 3% Interest and will also pay Cashback on Direct Debits such as the Elec/Gas and Phone that you mention (providing you pay in minimum £500/month - not clear if you do from the post so far)

You can turn this thing around and have your banking make you money rather than the £42/month it's costing at present!

That is certainly my intention and your suggestion is great, did not realise that it was possible to earn cash back for direct debits! Will investigate further on MSE

p.s Do have more than £500 coming in, and having checked and assuming my calculations were correct, I will earn £5.17 cash back on the Santander123 account, minus the 123 account fee of £2...epic!

PeacefulWaters

DarylHume wrote: »

That is certainly my intention and your suggestion is great, did not realise that it was possible to earn cash back for direct debits! Will investigate further on MSE

p.s Do have more than £500 coming in, and having checked and assuming my calculations were correct, I will earn £5.17 cash back on the Santander123 account, minus the 123 account fee of £2...epic!

If you could keep yourself in credit and fund with £750 a month (paying two direct debits) you'd earn a fiver a month with a Halifax Reward account without the £2 fee.

If you move your current account elsewhere but leave your overdraft with Halifax you will need to jeep funding the Halifax account. Otherwise they'll withdraw the overdraft facility and start charging you £5 a day.

Tread carefully and keep working the debt down.

JDawg_2

1) convert the UR current account into a bank account. This means you will lose the various insurances etc. you get with the UR account, but it will save you £15/month.

2) Open up a new bank account at a different bank (not Halifax/Bank of Scotland).

3) Set up two monthly direct debits on the new account, and tell your employer to pay into the new account.

4) Apply to have this new account "switched" to your existing Halifax account.

The benefit of this is that not only will you get the £100 switch bonus (the offer is open to existing customers), your existing overdraft will be made interest-free for 6 months.

If you can get the full OD cleared within 6 months, then convert back to the UR if you want the insurances (for £10/month) or the reward if not (pays you £5/month), or move the account elsewhere. But you need to completely avoid the overdraft if you stay with Halifax, as it will cost you.

See the Halifax website for the full T&Cs

If you do all the above, you should save £100 + £15 x 6 + ~£31 x 6 = ~£376 from doing this.

I've assumed that you are earning more than £750pcm net, and that you have not received a switch offer from Halifax since Jan 2012. Otherwise this method will not work.

innovate

JDawg wrote: »

I've assumed that you are earning more than £750pcm net,

You do not need to earn £750 a month, you just have to pay in £750 a month. Big difference.