Post-graduation account advice

[Deleted User]

Hello all,

Four years ago when I started uni I took the MSE guide's advice and moved from Barclays to the Co-Op for their Student Current Account. Now that the glory days are over, I'm trying to work out my options. Your help would be appreciated once more!

I'm fortunate enough to be in full time employment on a gross salary of £30k/pa. In addition to that I get a travel allowance depending on my proximity to work, which means the amount coming in goes up to £32k/pa with that factored in - covering all my travel costs. As you'd guessed however, I'm up to my neck in student overdraft debt (£1800 out of £2000), but as I'm currently living with my parents, I'm quite tempted to pay that down over the next month.

Basically, my question is -- do I go for a good graduate account with Santander, giving me three years of a £2k 0% overdraft, or do I quickly pay off the current overdraft that only lasts a year and switch to another provider, getting myself rewards and/or a nice switching bonus?

I see my options as:

1) Santander Grad Account. £2k 0% for 3yrs. Nice to pay debts down gradually, cheapest 'loan' I'll ever get, bank of Mum and Dad excluded. I also get daily interest on balances, so that might be a nice alternative to rewards if I'm moving in and out of credit. No switching bonus.

2) First Direct. No in credit interest, but generally a decent bank with Apple Pay and good service. Nice switching bonus.

3) Halifax or Tesco Bank. I shop lots at Tesco, so the points and in-credit interest might be nice. Halifax is also quite attractive for the bonus and the £5/mo so long as I'm in credit.

Packaged accounts are out as I'm not planning tonnes of holidays, and I'm likely going to move into a flatshare, meaning rewards current accounts aren't of interest. Unsure about interest bearing accounts like TSB Plus given Santander's offer and the fact that it's unlikely I'll be having a consistent balance of +£2000 in the black.

After possibly the longest graduate account-related post in the history of MSE, what do you think? Any and all thoughts appreciated. Would also like to know experiences, particularly of Santander's Graduate Acct!

djpailo

I've always been in the mindset that you should pay off your debts as soon as you can, unless you have a very good reason not too (e.g. The Glazers don't pay of United's debt because it gives them some tax breaks). Given the uncertainty over Brexit, I'd personally just pay it off, but my opinion may be very different to what others might suggest.

Jake0307

I don't know how you're still in your student overdraft if on £30k p/a and living with parents??? Of course, I don't know your circumstances, so it may well be justified. Ignore me if I have the wrong idea.

If your student overdraft is like mine (Natwest) it will decrease steadily over 3 years (decreasing by £500 per year) thus giving you time to slowly pay it off. That is, if you don't go for a graduate overdraft. I'll be going for one soon myself after this summer once I finish my masters, so I look forward to seeing the replies to this thread.

[Deleted User]

Jake0307 wrote: »

I don't know how you're still in your student overdraft if on £30k p/a and living with parents???

I've just graduated - as of last month - hence I'm asking whether or not I should pay it off quickly and get a current account with a decent switching bonus/service, or if I should get a proper graduate acct and pay it down gradually given I can get a 0% o/d.

Co-Op overdraft only lasts for a year after graduation, so I'm forced to make a decision either way really.

DrSyn

Tomorrow you could become ill, have a bad accident, lose your job or find you unable to pay off your debt for some other reason. My advice is to pay off the debt as quickly as you can have a happy life.

I have found living without debt makes life much simpler and less stressful.