Overdraft Trap

stumbles73

Hi,

We're trying to pay off an overdraft, each month paying £50 in but the bank then charges £11 in bank account fees and £29 in overdraft fees so it's taking forever!

Is there a way to speed this up? I've seen the virgin money 0% credit card mentioned.

I suppose I was wondering if these charges are fair and normal.

Thanks!

dieselv2

It depends on your bank account and the terms you agreed to. But if you could pay it off by the time the 0% finished you would probably save money doing this. Remember to scrap the OD afterwards so you don't fall into the trap again.

tallyhoh

Is it an authorised overdraft?

clairebeth

It does seem a lot. Are the £11 account fees because it's a packaged account that you are benefitting from, or are they charges because it's an unauthorised overdraft? How do they work out the £29? A standard fee, or a % of the amount overdrawn?

sourcrates

stumbles73 wrote: »

Hi,

We're trying to pay off an overdraft, each month paying £50 in but the bank then charges £11 in bank account fees and £29 in overdraft fees so it's taking forever!

Is there a way to speed this up? I've seen the virgin money 0% credit card mentioned.

I suppose I was wondering if these charges are fair and normal.

Thanks!

If you can get the 0% card, then fair enough.

If you cant, then the way to go about this involves opening a new basic bank account, with no OD facility (and no credit check either) transfer all your banking to your new account, you then treat your old OD as just another debt to service.

So then you would write to your old bank, explaining your current financial position, and asking them to stop all interest and charges, to allow you to clear the debt, with a monthly payment you can afford.

Do you have other debts or just this one ?

Any kind of debt management will be recorded on your credit file.

ViolaLass

Are you paying in only the £50 each month or your salary too (and then spending it.)?

stumbles73

Thanks everyone, this is really useful! On further inspection, it is premium account fees so we'll be canceling that as now have a sperate account and that will bring the charges down to £29. Will try to get the 0% card.

ashe

stumbles73 wrote: »

Thanks everyone, this is really useful! On further inspection, it is premium account fees so we'll be canceling that as now have a sperate account and that will bring the charges down to £29. Will try to get the 0% card.

If you've been paying premium account fees and not using the service you can try and reclaim those charges.