Overdraft charges

hmc

Hi all hope it's right to post here
I have an agreed overdraft limit
I have no credit or store cards it is the only thing I've ever used
I'm trying really hard this ur to clear it/ lower it,but I'm being charged £36 mth for it and that money would be wittling away at lowering it!
I'm on a very tight budget but have lowered quite a few things this month like car insurance,pet insurance and dog food,finishing what I owe mum, so hoping to creep it down.
Martin suggests a 0% credit card? But I couldn't meet the repayments I'm sure
This is natwest whom I e always been with but does this sound high charges?

eskbanker

Difficult to say when you don't say how much you owe but repayments on a 0% credit card may be less than £36 per month - worth looking into, not least because overdrafts are repayable on demand and so aren't a very secure (or cost-effective) way of managing long-term debt.

hmc

Sorry it floats between 1700 and 2000

eskbanker

£36 per month sounds about right then, based on the figures at http://personal.natwest.com/personal/current-accounts/overdrafts/Compare-Overdraft-Costs.html

If you can get a money transfer 0% card with the likes of MBNA or Fluid (see http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs) then the minimum monthly repayment would be £25 during the 0% period, which would hopefully allow you to start making inroads into the debt itself.

hmc

Thanks
But £25 a month wouldn't pay it back in 2 yrs then wouldn't I b worse off
Thanks again just not sure how it all works

CLAPTON

hmc wrote: »

Thanks
But £25 a month wouldn't pay it back in 2 yrs then wouldn't I b worse off
Thanks again just not sure how it all works

You can pay more than 25 per month : that is the minimum allowed

if you want to pay 2000 off in 24 months then the minimum payment would be 84 per month without any interest or charges
a better option than paying 35 per month in OD charge and payign none of the capital back.

hmc

Thanks But I can't afford 84 a month I don't think

molerat

You need to post your SOA on the DFW board then. The only way to reduce the debt is to pay more off. Reducing what you spend, selling things and working more hours / jobs may be the only way forward. http://forums.moneysavingexpert.com/forumdisplay.php?f=76

eskbanker

Clapton could see what I was getting at - if you have a 0% card then whatever you pay to it reduces your debt by that amount, whether it's £25, £36, £84 or whatever, whereas continuing with just making interest payments on an overdraft won't actually address your debt at all!

You mention in your opening post about reducing outgoings, including no longer making payments to mum, so going forward you should have more money to throw at the debt to make meaningful progress, rather than just £36 per month to keep it from getting any worse. Are you happy just "hoping to creep it down" or really wanting to get out of debt in a reasonable timescale?

hmc

Thankyou
I understand a bit more now im working all the hrs I can I've just taken a few more on
So we tighten our belts even more and pay off as much as I can each month
Already told son there's no few days holiday this yr I do want to clear it I hate paying the bank for the privilege