Overdraft

Tonydavies85

Hello everyone my first post here. It's advice more than anything I am after and it's to do with my overdraft.
Here's the thing so I have an agreed overdraft of 1k,last month was the first time iv ever used it, I was into by £265, so my wage wen in today and cleared it but once all bills have gone out again this month iv realised il be in it again. I am with lloyds and they have said £6 per month fee and between £6-10 interest depending how far I go into it. I have a family of 4 with 1 income and will likely go into it around £350-£400 from a rough guess it looks like it will be like this till my partner finds full time work in September.my wage will cover.whatever I go overdrawn no issue. So basically all I want to know is well is this normal?
Many thanks Tony

Dobbibill

Yes, this is normal.

https://www.lloydsbank.com/current-accounts/personal-overdrafts.asp#tab-row-2

If you want to see approximately how much it will cost you then you can use this overdraft calcluator on their website.
https://www.lloydsbank.com/current-accounts/personal-overdrafts/overdraft-calculator.asp

They'll notify you after you use it though, to let you know how much it has cost and when the charges will debit the account.

Tonydavies85

Ok so living like this isn't so bad for a few months then really? Aslong as my wage pays the overdraft off every month?

YorkshireBoy

Consider using a 0% on purchases credit card rather than the overdraft facility to tide you over until September.

Tonydavies85

Wouldn't that put me in more debt long term?

Tonydavies85

I currently have the lloyds bank platinum Mastercard

binaryuniverse

Tonydavies85 wrote: »

Wouldn't that put me in more debt long term?

Not if you are using it correctly. You use the 0% credit card to buy all your usual day to day stuff (petrol, food, etc), and your debit card can be put away for a while (but bills/direct debits will still come out from your bank account). This allows you to pay off the overdraft much faster than if you made your purchases with your debit card.

So yes, you are building up debt elsewhere, but it's debt gathering no interest. Whereas the longer you are in your overdraft, the more you are paying for it. So it should be cheaper.

Just don't fall in to the trap of spending on both and you're golden.

jimjames

Tonydavies85 wrote: »

Ok so living like this isn't so bad for a few months then really? Aslong as my wage pays the overdraft off every month?

If you can avoid it by reducing spending then that would be better as it means you're spending more than you earn. What happens if other circumstances change or you have an emergency that needs money spent on it - boiler breaks, car has major problem?

DCFC79

So your thinking of using your overdraft until september ? Be careful as the bank could recall the overdraft at any time. Its not really advisable to be in your OD, have you tried cutting back on your spending ? Really scrutinised your bills etc ?

Tonydavies85

Yes I only creeped into it last month because of birthday parties and having to travel to and throw a few more times than usual. We usually manage off 550 a month easy without overspending. So yes I think il go the route of using the lloyds card rather than my usual account so I don't have a large amount taken out of my wage atheist that way I wont have a large OD to pay end of the month

Tonydavies85

My lloyds credit Ard is 0% for 6 months and it's a new card so that will be better and cheaper long term than my overdraft atheist then I can stay in the black with my account this month