Overdraft woes

fortonfour

Hello all,

First-time poster here. I thought I should share with other people the experience I've had and also see if there are alternative options I could try.

So basically, I have a £1900 overdraft with my Natwest account that I can never get out of (earning approx £1600/month and living from one paycheck to the next!). Seeing as Natwest charge high fees for overdraft usage (over £200 a year in my case) I thought I should switch to one that had lower fees. So I was happy when MSE recommend the Nationwide Flex Direct account that offered a fee-free overdraft for 12 months, giving me a respite to get my finances in order.

However, when I applied for the account online I was informed Nationwide weren’t able to offer me an overdraft on my account. It seemed strange seeing as I have a regular monthly income and only one loan that I’m currently paying back each month, and credit score is currently ‘fair’. I thought maybe they couldn’t offer me £1900 that I currently have, but could offer a slightly lower overdraft, so I went into a branch today to double-check. Unfortunately I got the same result, and each time I apply it has a negative effect on my credit score (double boo)

I think it’s worth stating on the MSE ‘Best Bank Accounts’ page that the recommended Nationwide Flex Direct account might not actually give you an overdraft at all. Particularly the line “But switch to the Nationwide FlexDirect* account, and you get a year's 0% overdraft.” should come with a caveat.

I appear to be stuck with a hefty overdraft charging high fees, and seeing as the best way out of it is a dead-end, I’m not sure where to turn (I’m already working on cutting down on spending). If anyone can offer further advice regarding the above, I would be most appreciative!

Archi_Bald

You can post your SOA on the Debt Free Wannabe board, where you are more likely to get some help than here.

Not getting an overdraft if you are a brand-new customer who already has credit elsewhere is a normal thing.

YorkshireBoy

fortonfour wrote: »

I think it’s worth stating on the MSE ‘Best Bank Accounts’ page that the recommended Nationwide Flex Direct account might not actually give you an overdraft at all. Particularly the line “But switch to the Nationwide FlexDirect* account, and you might get a year's 0% overdraft.” should come with a caveat.

Adding the word "might" as I've done above you mean?

Then again, the caveat is on the Nationwide landing page...

*Overdrafts are only open to customers aged 18 or over and are subject to approval.

...so no MSE caveat required?

...I’m not sure where to turn (I’m already working on cutting down on spending). If anyone can offer further advice regarding the above, I would be most appreciative!

There are 3 ways out of debt...

1. Earn more
2. Spend less
3. Restructure the debt, thereby making it cheaper to service

Since you've had a setback with 3, and you're already on with 2, then that just leaves 1...so get second job/better paid job/sell things you don't need.

fortonfour

Thanks I'll give that forum a go!

Ben8282

What you need to understand is that people who live in their overdrafts don't get 0% overdraft offers. You have a £1900 overdraft limit. You earn £1600pm. Your overdraft NEVER gets paid off. Therefore you are using almost all of your overdraft facility each month.


When your overdraft is repaid and has not been used for several months THEN you will get an account with a 0% overdraft for 12 months.

badger09

Ben8282 wrote: »

When your overdraft is repaid and has not been used for several months THEN you [STRIKE]will[/STRIKE] might get an account with a 0% overdraft for 12 months.

fixed that for you

chuckley

You LIVE in your overdraft to a high amount and seem surprised Nationwide refuse to let you rack up another one.

Your issue is you need to fix your finances.

Dobbibill

Now that you have the Nationwide account, put it to good use.

Follow the advice above and post a SOA on the DFW board.

Treat your OD with Natwest as a bill/expense each month. Put together a budget and each month transfer spending money from Natwest to your Nationwide account making sure there is enough left in Natwest for all bills including the fees for the OD and a little extra to start paying it off. It's not going to be fixed overnight and NW probably did you a favour declining the OD as now you will think about paying it off not just moving it or digging yourself in deeper with a 2nd OD

fortonfour

Thanks Dobbibill - using the Natwest account as a bills/expense account makes sense. I'm going to create an SOA and share it on that forum too.

john1002

You will also find that if you pay in your salary for say 3-6 months and check your reserve limit within Internet banking you will probably see a limit in this time frame, it updates every Saturday around mid day. When you see a limit you can apply for an overdraft just below it, so say it shows £250 the go for £225 or £200. Every month or so you should see if increase with no credit search even though they say they will, never have with me.

John