Best way to clear overdraft, please advice

giddyG2001

I have an overdraft of £3, 250 that I am always in and am desperate to get out of. In the summer, I took out a 0% credit card and did a cash transfer from there to clear it, thinking this would be the best solution. But I stupidly kept the card on the account and now it's back up to it's max again. I'm so frustrated that I can't seem to get out of it. I know my budget down to the last penny and earn enough to cover that but it just seems to be spending little bits that gets out of control, I feel very ashamed. Can I please have your advice about the best options for me? I've narrowed it down to these two.

1. Get another card to do a cash transfer into overdraft account, cut up overdraft card and only use my account that has no overdraft on it for spending on food/petrol etc. Pay off the card monthly.

2. Open another bank account with no overdraft, transfer all my direct debits to there. Cut up overdraft card and pay off monthly to the account.

I'm guessing number 1 is the best option as I won't be paying monthly interest on my overdraft, I'm just very cautious about getting stuck in the same situation as I did a few months ago where I end up back in the red. But if I cut up my overdraft card, that shouldn't happen.

Any advice welcome

PeacefulWaters

Self discipline is the answer.

What have you spent the extra £3,250 on?

Norscbu

Do you have any savings?

getmore4less

I know my budget down to the last penny and earn enough to cover that but it just seems to be spending little bits that gets out of control,

The budget is wrong, you have not included everything that you spend on so always run out.

Start tracking all the things you spend on and add them into the budget taking money from elsewhere so it balances.


Review everything, reduce all the regular outgoings, small TV/internet packages, phone go PAYG,
Allocate less to the discretionary spend, booze, fags, going out, takeaways, holidays you are borrowing money to do all those things.

eskbanker

As above, if you've spent something like £600/700 per month more than you're earning then you need to review your incomings and outgoings in more detail to get to a sustainable answer.

Try the debt-free wannabe board and posting an SOA from http://www.stoozing.com/calculator/soa.php

Dobbibill

You may find you have no option.......there's no guarantee you would get another card. That will only become if/when you apply.

You need to look at your budget again and address the reason you have run up the debt. Without curing the problem this will become a vicious circle.

Should you only have the option of a 2nd account then you may want to leave all DD's on your overdraft account and also treat the overdraft as a bill.

EG - cost of bills + cost of overdraft + amount you are paying off each month = Total amount transferred to the account.

Spending money in 2nd account.

Eventually this will become the normal routine but self discipline is key.