I know I'm a pain but can someone please do the maths for me?

pnq06

Sorry for more q's

But I've just got off the phone to the bank after realising that my overdraft is costing £34.99 pm (also managed to get an excess fee of £30.00 waivered after threatening court action ).
They have told me that I am entitled to an account where the first £500 of an overdraft is interest free- thing is my overdraft is £2700.00 and costs £34.99 pm and this account will cost £15.00 pm, It also has other advantages which I'll never use such as travel insurance, mobile phone insurance, car breakdown cover but I could make use of the house insurance which I currently pay £8.97 pm for.

So question is- Is it really worth it?

I'm no good with numbers

Thanks :beer:

shell_girl

What would the rate be on the overdraft after the first £500?

lynzpower

Basically from what I can see they are charging you 15 quid but the interest on the account costs 35.

therefore if you take it you will save 20.00 per month.

Yes, youll also have all those other insurances included I expect however the excesses will be massive they always tend to be on the freebie ones.

tyllwyd

You would pay £15pm effectively to borrow £500 - what is the monthly interest going to be for the other £2200?

Also, you don't mention your plan for repaying the £2700. Are you borrowing it indefinitely, or are you factoring in reducing the balance by a monthly amount to get it repaid over a certain time limit?

pnq06

Thanks for the speedy replies!!!

I can't see a percentage of what the overdraft charge will be after the first £500 but it does say that it would be worth £119 a year... Although I have just seen that it will go up to £25 per month after 3 months- She didn't mention that on the phone :mad:

Guess it doesn't seem so worth it now does it?

pnq06

tyllwyd wrote: »

You would pay £15pm effectively to borrow £500 - what is the monthly interest going to be for the other £2200?

Also, you don't mention your plan for repaying the £2700. Are you borrowing it indefinitely, or are you factoring in reducing the balance by a monthly amount to get it repaid over a certain time limit?

Unfortunately we only pay in £1198.00 pm and every penny of thats accounted for so its an ongoing thing until I can get back to work next year after having my baby and hopefully claw our way out then!!!!

I do have an ongoing loan but am too scared to ring up in case I get talked into something

rog2

I seem to have 'lost' my post, but, from what I read - your Bank is really not trying to do YOU any favours. If they were really interested, they could have discussed ways of 'freezing interest and charges' on the WHOLE overdraft, in exchange for an agreement on reducing it over, say, one year, whilst STILL allowing you to use the account.
Instead, they seem quite happy to try and 'fob' you off with incentives that you probably won't use and expect you to, miraculously, start operating your account within a £500 overdraft limit.
If I was you, pnq, I would be tempted to open an account at another, non-related bank, have everything paid into the new account, and treat your overdraft as a debt - paying token payments, until you can afford to clear it.

pnq06

rog2 wrote: »

If I was you, pnq, I would be tempted to open an account at another, non-related bank, have everything paid into the new account, and treat your overdraft as a debt - paying token payments, until you can afford to clear it.

Is it as easy as it sounds?

So I transfer all my DD and SO over to a new account and occasionally pay in a bit of money to clear the overdraft in what would become my 'old account'.
But I would need to be meeting the charges for having the overdraft (£34.99pm) so anything that I add to that would be clearing it???

Oh its just so darn confusing!!!

dancingfairy

Doesn't Martin's article tell you the best article if your overdrawn? Basically you need to know what the overdraft rate is above the £500. If you had a seperate bank account and treated the overdraft like a debt you would have to pay £34.99 a month before you were knocking the balance down so pay in £40 (say) and £5.01 would pay off your debt.
Have you got any other debts? what are the situations with these if you have- are you making min payments etc. If your credit rating is good you could maybe apply for a credit card and put the debt on there and pay it off each month- obviously this would only work if the interest on the card was less than on the overdraft -something to consider. If you are making token payments to other debts then you could do a similar thing on your overdraft (obviously making sure you have a new account).
Perhaps pop up your SOA and we can see if there's any way to cut back and will give us an idea of the best way forward.

pnq06

Couldn't really make sense of Martin's info

I think my credit rating must be ok though cos the bank tried to offer me a credit card on the phone

We do have a loan that we pay £214 pm and the apr etc. is currently the best around so maybe I should try and increase it by £3000 to pay off my overdraft?

My current SOA is-

Income-
Partners wage- £1198.00
Tax credit's £0.00 (overpayment!)

Outgoings-
Rent- £385.00
Council Tax- £92.00
Nationwide loan- £214.17
CSA- £178.00
TV licence- £10.95
Gym- £20.00
House insurance- £8.91
Internet- £25.00
Sky- £15.00
BT- £13.41
Orange Mobile- £31.00 (Lowered it today& they won't budge anymore!)
Powergen- £89.00
Water- £20.00
Overdraft interest- £30.00 (approx)

So we're left with under £100 to do food shopping, travel fares, baby stuff etc. although this is a lot better than a couple of months ago!!!

pnq06

albertross wrote: »

Can't you get internet from sky.

£25 for internet is ott nowadays

Someone's gonna say it, so gym.. do you use it?

All sort of bundle deals for TV/phone/mobile/internet around

This is where my problems start as we're in contract with Sky, Tesco (Internet) & Orange. I have tried to reduce packages etc. but we're on the lowest with sky, to downgrade on the internet will not benefit us, and I begged and pleaded with orange today and the best they where willing to do was change my package from £51.00 down to £31.00.

I agree about the gym but its my partner who goes and his defence is that he has to shave his own hair now days and eat lunch that his mum donates everyday and its not like its virgin or fitness first where the rates are extortinate and he has been going at least 3 times a week since January :rolleyes: I think he means its his 1 luxery :rolleyes: