Clearing overdraft / changing banks?

JoshyBoy_2

Hi all

I have three accounts with TSB.

I started out with a Platinum account, which has now got an overdraft of £1,250. (It was initially a classic account but it’s been upgraded to accommodate such an overdraft).

I also have a current account with zero balance (I opened another account to get some savings in, which I managed to do).

I also have an E Savings account. Opened simply to get better interest from the money saved in the current account. I have roughly £1,000 savings in my E Savings account. I dip in and out and put back on pay day every month.

The point in this post is I ultimately want to close the account with the £1,250 and have my wages / outgoings in the current account. How would be best to achieve this?

I’m currently paying £17.00 for the platinum account, then a further £16 per month on over draft usage and interest.

How easy / difficult would it be to transfer this account to a current account to at least avoid the account fee?

How easy / difficult would it be to transfer this account to another bank who may be able to offer a better fee / easier way to clear the over draft.

Ideally I’d like the account closed and to pay TSB say £50 p/m until I’ve paid back the £1,250.00. Is this possible, is it possible with another bank?

I'd like to have just two accounts, one current account with no fees for the privilege and my current e savings account.

Thanks

Tixy

How much interest do you earn on the esaver? is it more than the £16 you are paying in overdraft fees/interest? If not then it would make more sense to stop moving the money between the 2 and just reduce the overdraft balance to £250 (and ensure you don't spend more than this).

To answer the questions, should be very easy for tsb to downgrade the platinum account to a standard bank account.

Should be pretty easy to move your current banking to another bank using the new switching service, although if you don't have much in the way of DDs etc set up it also should be easy to do this yourself.

Whether a new bank would offer you an overdraft and what size would depend on how they assess your credit application. However if you want to pay TSB the £1250 gradually then it sounds like you don't actually need an overdraft with the new bank.

Ideally I’d like the account closed and to pay TSB say £50 p/m until I’ve paid back the £1,250.00. Is this possible, is it possible with another bank?

You can very easily set up a standing order from a new bank account to your existing tsb bank account. Though you will still be subject to interest/charges on the tsb bank account until it is paid off..

However tsb can recall your overdraft at any time. If they choose to recall your overdraft, either at the next annual review or due to a lack of activity on the account then you would be required to pay the remaining overdraft balance within 14days or it could be marked on your credit file. Additionally once recalled and unpaid for more than 14days they could offset funds in the esaver to pay off the overdraft.

FinanciallyUnsavvy

I agree with Tixy. Shove your savings in your main account and reduce the bulk of your overdraft - I very much doubt you're making as much interest on it than you're paying out in OD fees. Paying my overdraft off was the best feeling, after being "in the red" for years, having a permanent positive sum in my bank account is incredible. Do whatever you can go get there ASAP!

Lots of people will suggest opening up new bank accounts then just paying an amount every month to the overdraft, same as any other bill. I never changed banks as it would be too simple to "forget" about the overdraft. Seeing my balance go up and up every month was such motivation.

Good luck.