Arranged to reduce Overdraft, question?

CameronLFC

Hi there,

I'm not sure which forum to post in, so I apologise if this is in the incorrect section.

Basically, I have a 220 pound overdraft with Nationwide. my job is very seasonal, so I get paid around 400 in the winter, so I always end up back in my overdraft after paying all my bills. I got a letter telling me that they're going to reduce my overdraft back to zero, which'll make it really hard for this first month. I managed to get them to reduce it by 50 pound each month.

My question is: Will the money in the £50 zone be taken away when the money is reduced, or will it just push up the available funds?

For example, if I'm at -50 funds, and they reduce it by 50, will it push the available balance to 50, or will they just take the 50 pound and leave me with 0?

If they just take the money, i'll be taking a 50 quid hit every month, right? Luckily the spring is coming, so my hours will just about double.

Thanks for reading,

- CameronLFC :beer:

PS. I realise that they are able to take the overdraft whenever they want, but I can't imagine how horrible it would have been to be someone who's got like 3000 overdraft and they want it paid back in 14 days.

sourcrates

Hi,

Surely you must have other income ?

You can't live on £400 a year ???

CameronLFC

No, it's 400 pound a month, sorry, and that's just in the winter. I live at home so I only have a certain amount of bills really. I'm just asking about the overdraft reduction cos I'm not sure

sourcrates

CameronLFC wrote: »

No, it's 400 pound a month, sorry, and that's just in the winter. I live at home so I only have a certain amount of bills really. I'm just asking about the overdraft reduction cos I'm not sure

Get yourself a new basic bank account with no borrowing facility.
There is no credit check for a basic account usually.

You can open them online in minutes (depends on the bank).

Transfer your wages into the new account.

Stop using the old account with the OD, then offer to pay the OD off at a rate you can afford.

Then budget correctly so you live within your means.

Only way to do it.

WorriedFTB_2

Did they make you aware that it will be defauted on your credit score as an AP arranged payment .
I had that problem few years ago and it hunts me ....
Yes they will reduce the last £50 to 0

CameronLFC

Yeah, they did tell me that, but I couldn't afford to lose 220 from my account in one big chunk.

Thanks for your help

midnitegremlin

To answer the OP's Question.

It's not "your" money in the overdraft, it is their money. So make sure you have paid back the money before the overdraft is reduce.

Eg, if it's now say a £300 overdraft you MUST make sure that you are overdrawn by a very maximum of only £250 BEFORE they reduce your overdraft by the £50 again.

As others have said, it's probably wise to get another account and see this as paying back a short term loan.

andyfromotley

you need to know on what day they are going to reduce it each month 9probably the 1st) and make sure that on that date you have at least £50 more in your account than your OD limit as illustrated above.