Do you really need an Overdraft??

Thrugelmir

GTR_King wrote: »

Do you really need an Overdraft....

Better off building an emergency fund for occasions when unexpected bills have to be paid for.

tom222

I have a £100 overdraft on my Halifax purely for just on the off chance I forget about a payment and go over by accident. Don't think I've ever used it though.

planteria

having a small overdraft facility in place can help if you overlook something.. but i don't want one on the majority of my accounts. just small facilities on my HSBC and Barclays accounts.

gingerdad

it all depends how complicated your situation is. We have over drafts on our two main accounts only tend to use the free £250.00 from first direct each month to keep a bit extra in our other chraging accounts.

horses for courses, also use free credit cards and have serveral 000's in various other savings and current accounts trying to earn the best interest and lowest costs.

at 25 you'll have plenty of life experiences to come that may change your position.

sweetilemon

I think it's handy for a bill paying account so if something comes out on an unexpected date fees are not incurred. I would only use it to prevent charges and pay the money in when I revived notification via text msg from my bank. I would prefer to use credit cards as short term 'borrowing', paying off at the end of the month. As a student I lived in my overdraft and left my money in savings as the OD was interest free and savings were a good %.

takman

I think having an overdraft is only really needed if your not really good at fiancial planning and budgeting.
But a better solution would be to have a TSB account with £2000 in it and treat that as "zero" and only spend amounts above it. This means that your earning 5% interest on all the money and if you do go below £2000 then it's still your money and you don't have to pay any fees.
If you do not have a spare £2000 then when you next get paid you can spend everything you normally would on a credit card and leave the money on the TSB account. This means that your earning interest on the money then you can pay off the credit card every month with you wages. This means that you will never go overdrawn because you have all the money you spent on your credit card sitting in your account as a buffer.

So really there is no need for an overdraft.

GTR_King

Thanks for all the advice....

If I did get an overdraft will only be for £100/£300 max for emergencies/cover....

Will have it on my main account (Barclays)

chuckley

if you do get one, have it on your bill paying account like someone said above, rather than the one you get paid in.

GTR_King

ok thanks for the advice will think about it...

but only want small O.D on my main account

grumbler

Sharon87 wrote: »

If you have enough balance available... available balance ...
You do need the available balance .... If you don't have enough balance....

Hope that makes sense?

It does if it's "available limit" or "available to spend", not "available balance".