Overdraft reduction affected my balance. Is that right??

TozMiles

It's probably going to sound like a stupid question BUT here goes..

I've just reduced my overdraft (in an attempt to wipe it out completely) but it's left me in confusion as the same amount as the reduction has now disappeared from my account..

In my head, I wasn't expecting it to make any difference, although maybe as I'm typing this it's starting to make sense.. It's starting to do my head in a little, so hopefully someone in the know will tell me

I was thinking that if I were at (for example) -£100 in my account, and the overdraft was set to allow -£400, I could reduce it it to say -£300 and that would be it.. I wasn't expecting anything to vanish from my account, that's for sure..

I guess I should be glad that I didn't reduce it by as much as I almost did!! That would definitely have left me high and dry..

Thanks all in advance..

MERFE

Shouldn't affect your actual balance but of course it would affect your available balance. So if you are at -£100 and had -£400 your available balance was £300 but if you reduce your overdraft to -£300 your available balance is now only £200 because you now only have £200 to go before you reach your overdraft limit. If your actual balance went from -£100 to -£200 when you reduced your overdraft then something has come out and it may be worth checking with the bank what it was.

z1a

Do you not mean your available balance?

Crossed post with MERFE

Dobbibill

It's going to be your available balance that's affected.

EG - If you have £500 credit in your account and have a £500 overdraft facility, you would have £1000 available.
If you remove the overdraft, you would only have £500 available.

Your available balance will always show the total amount you can take from the account....this includes your overdraft limit.

TozMiles

Thanks guys..

I think that's where I'm probably getting confused.. Of course the available will go down, and I more than likely didn't pay attention to the actual balance, and was looking at that instead..

Will have a good look at the actual balance shortly, just to make sure but I think it's more likely I need to pay more attention..

Thanks again

EssexHebridean

I can only assume that the "available balance" info started above varies between banks. I'm with Nationwide and our "available balance" is the cleared funds physically in the account, and definitely doesn't include any overdraft amount available.

Drawingaline

One of the reasons I got rid of my small Lloyd's overdraft, it always made me feel I had more money than I did as it showed on my available to spend.