Reducing an agreed overdraft

glittercakesxx

right, thanks i didnt know about that

we have had it for 5 years so far and they keep trying to get us to increase to 1250 but i keep declining...god...lol

jimjames

glittercakesxx wrote: »

Thank you for you fast reply

I was just worried I was missing something out and that I would be putting is in a sticky situation or something...
I wish we could do that for the first month but unfortunately with 2 children and only one wage it is difficult with saving to move home and pay of credit cards which need to be done first.

If you are saving to move home does that mean you have a balance in a savings account that you could use to pay off the overdraft? With the rates on savings so low it's a really bad idea paying out interest on overdraft at 20% (?) and only getting back 1% on savings. You'll reach your goal much faster maximising your returns and minimising outgoings

lisa110rry

This has put me in mind of something that happened several years ago ref my banking.

In 2002, I wanted to purchase a personalised number plate for our son (long story but it was in lieu of a promised car when he got a company car), but the money for it was in the US. I didn't know at the time that it might take up to 28 days to transfer my own money to me, so I called my UK bank and asked them to raise my OD limit to a stonking £7500. (This was never used. The transfer came through just in time.)

Years down the line and internet fraud began to be more prevalent so I rang my bank and asked them to lower my OD to £1000 and lo and behold I was told that it would be noted on my credit file. I did it anyway, to be on the safe side.

So lowering your overdraft does cause a note on your credit file - but that's no reason not to get back in credit as soon as you can! Don't pay fees to banks! That's my motto.

firebird082

Just a note to add here that I found it much easier to reduce my overdraft by putting the money 'available for spending' in another account altogether (with a different bank), rather than just trying to spend less while you can still see that tempting leftover money in the overdraft. Worked a treat for me, might be helpful to you also?

colsten

lisa110rry wrote: »

So lowering your overdraft does cause a note on your credit file

It doesn't actually 'cause a note'. What happens on your credit file are two things:

1. a credit search is registered
2. any existing OD limit history will be updated with the new limit

Neither is anything to worry about really.

downhillfast

Depending on how strict you can be with yourself, have you considered paying off the overdraft with a 0% credit card... you could then cancel the OD and set up a direct debit to pay it off each month - and the £6 charges you wouldn't then be paying each month could go towards clearing it too!