What to do re: bank account

aymz1983

Hello

I have become more and more disappointed in my current bank and I am completely fed up with it all. I have their mobile banking app and it corresponds to my actual banking about 50% of the time. Same for online banking, I can check it, and further down the line the statements reflect a different scenario. I have a few accounts with this bank - basic account, savings account and my main account which is their student account (with £2000 overdraft).

So I have opened up a new, simple account with another provider. I can close down the savings and basic account with my current provider but I'm stuck with the student one due to the overdraft. I'm unsure what is the best way to proceed with this.

I have the overdraft until I graduate (next year) and then I think I have a year before I have to start repaying it back. But I don't want to leave it that long if I can help it.

What would happen if:
- I want to close it? Does the o/d need to be paid back in entirety or would they accept x per month?
- Left it open but stopped all monies going in bar x amount to reduce the o/d each month?

or is it something I just have to stick with? I don't want to get into formal defaults with them, the last thing on my credit file drops off in 2020 and I don't want to have a default from current bank until 2021/22!
Although, they obviously report to the CRA's that I am using it (and stay within the limit) so once the o/d is paid back would that stay as settled for 6 years or would they just not report it if I don't go into the overdraft at all? I'd like to possibly look at mortgages from 2020 once the last default on my file drops off, hence why I don't need another one but would a five/six year normal settled account be ok?

Thank you

DandelionPatrol

Do not 'close' it - this is most likely to bring them to looking at it as a default.

In your situation, I would try to run it as a normal account, with some money going in and a little bit going out, to keep it below the radar, so that the overdraft is getting wiped - and I would not close the other accounts with the same provider. Taking any savings out of the savings account may come up on their radar if you still have the overdraft.

Remember that overdrafts can be recalled in full with no notice, though in practice you get 28 days to clear it

Sazzie23

So long as you are seen to be reducing the debt -overdraft - each month I don't think it would be seen as a problem. Just keep the account quietly turning over with enough to clear the OD charges and a little bit extra each month, then the occasional amount in to cover some purchase you can plan for and won't push the OD up.


What might happen is that the bank start reducing your OD facility as you drop the outstanding balance, that is a good thing on your credit file, in fact if you clear a bit you could ask the bank to reduce it, however that might alert them to what you are doing and as the OP above says it might cause them to look at a recall of OD or default.

DandelionPatrol

Sazzie23 wrote: »

What might happen is that the bank start reducing your OD facility as you drop the outstanding balance, that is a good thing on your credit file, in fact if you clear a bit you could ask the bank to reduce it, however that might alert them to what you are doing and as the OP above says it might cause them to look at a recall of OD or default.

I have never known anyone reduce their own overdraft limit, except here, where people with money problems who do not trust themselves with money seem to do it. In my book, it would be an indicator of financial problems and I think it is just the sort of thing which might prompt a bank to take a closer look.

By all means reduce the limit once you are squeaky clean on all your accounts with that bank. But not before.

bexster1975

I would just say, I never had money problems but as a student I was fully into a £2000 overdraft. I did indeed cut my overdraft myself monthly to enable me to clear the overdraft. Rather than an indication of a financial issue, hope it would be perceived as sensible organisation and planning. Either way, my bank never made an issue of it.

Just a different experience to add to the conversation

Bexster

DandelionPatrol

bexster1975 wrote: »

I would just say, I never had money problems but as a student I was fully into a £2000 overdraft. I did indeed cut my overdraft myself monthly to enable me to clear the overdraft. Rather than an indication of a financial issue, hope it would be perceived as sensible organisation and planning. Either way, my bank never made an issue of it.

Just a different experience to add to the conversation

Bexster

I take it you mean that you cut the overdraft limit?

In a sense it is sensible organisation and planning. But the substance of that planning is that the overdraft itself goes down. If you are doing that, you don't need interact with anyone at the bank, whereas if you cut the limit, you do.

In this world driven by crazy IT, banks will check credit ratings if you ask for an increased overdraft - which is sensible - but you could also find that the rule is implemented that credit ratings get checked for any change to an overdraft. If you want to fly under the radar, avoid creating events for the IT to react to.

aymz1983

Thanks for the replies.

I might just let it lie and leave money in the account each month so that there is more of the o/d available, and when I have the full o/d available then just close it.

No poor financial workings (at least, not nowadays!) I just really do not like how my banking has come to be with these lot, I've had numerous complaints over the last two years so wish to leave them as quick as I can

thanks again