Top Bank Accounts Discussion Area

Iwannabeamoneysaver

Hello

I'm new to all of this, but my resolution for 2009 is to become debt free and start saving again. I'm not in a massive amount of debt (£1500), but can't seem to get out of it, due to overdraft charges. These charges sometimes cause me to go over my overdraft before pay day, thus incurring more charges and so the vicious circle begins.

How do I get out of this? If I changed bank accounts to a 0% overdraft, how does it work? Do I simply transfer my (debit) balance from my current account into the new 0% overdraft account and start paying off that way? Surely its not that easy?

I'm confused, please can somebody help?

Thanks

Gambit

Hi Iwannabeamoneysaver,

First of all welcome to the site and forum. You are definitely in the right place to help get your debts on track and these forums are riddled with ideas on how to spend less thus saving more of your hard earned cash! :j

In regards to switching your current account, this can be very easy if done correctly. I've done it countless times and never had a real problem with it. Read Martin's guide on switching accounts as he'll probably explain it better than I can - click here.

If you are having problems with your overdraft then I would suggest opening an Alliance and Leicester account as you get the overdraft interest free for a year as well as £100 bonus for opening it - more details here. Basically you apply for it online and send them the necessary proof of identity or sometimes may have to go into branch with your identity so that they can make a copy of that for you.

In order to get the £100, you'll need to use their switching service. This service can be used to transfer all your standing orders and direct debits to the new account as well as informing your employer of your new bank details (so that they can pay that in there for you) and then close your existing account. At this stage let me make it clear you do not have to take all of these options. I only ticked the box which transferred my standing orders over as I have had problems in the past (with Abbey, who else?) with the account switching service so I choose to tell my employer directly as then I know its done and dont have to wonder which bank account I will be paid into. Another misconception is that you have to have your wages paid into this new account - you dont! The only further condition you must adhere to is to pay in £500 within 11 weeks of opening the account and then £500 every month from then (for a minimum of 3 months I think). This can be done from your current bank account by standing order if you decide to keep your wages being paid in there.

Once the account is open you should be given an overdraft of at least £500 if not more depending on your credit score. A&L offer a overdraft matching service if you dont get as much as you would like. This means that they will match your current bank account's overdraft limit if simply send them a photocopy of your statement. Then when you have the overdraft you want, simply transfer this money to your current bank account and use your interest free A&L overdraft instead.

This is pretty much what I have done as I opened my account last year and every month my wages go into my account then are transferred back out again a few days later leaving my account £10 under my overdraft limit (just in case).

I hope this has helped you but if you have any further questions then feel free to ask.

kerri_gt

I have just applied for the A&L Prem Current Account as Halifax are making my current account obsolete and I don't fancy paying £1 per day for my overdraft (which is on my hit list of 2009 debts to clear - but in the meantime £30 - £31 a month will not help with this!) Despite haveing 24 years of business from me, they wouldn't let me have a High Interest Current account because I already have one for my joint finances, and the only others they have are £13 per month for the Ultimate Reward Account (Ultimate rip off if you ask me!) or 19% APR on an overdraft for a Std Current Accout - are you kidding me!

As well as the bonus of £100 (if you pay in the qualifying amount each month) when opening the AL& Prem Current Account, don't forget to check the various cashback sites to see if there is a click through link. I just used Greasypalm which offers £25, though found out after TopCashBack.com offers £50 :mad: (that will teach me to look before i click!) Still, can't sniff at a free £125 :T

moneysavingnoobie

Hi there, first post here. Attempted to sign up to claim the £100 and the free overdraft. Got an email saying.....

We are pleased to tell you that your application for an Alliance &
Leicester Premier Current Account has been successful. We are now setting
up your new account. We will send you written confirmation in the post
within the next couple of days.....
Based on the information you gave us, we are not able to offer you an
overdraft............
However, if you use our Premier Switching Service, we may be able to consider matching an overdraft you have with your existing bank.

Sort of defeats the purpose, as i haven't got an overdraft set up with my current bank. Also wee question about the £100, so when i applied on the application i did not tick the box to close my old bank account (as im thinking maybe about reclaiming my bank charges) so does this mean i wouldnt get the £100 anywayz?

BTW - Great website! :T

Gambit

As I remember it you have to use their Premier Switching Service to get the £100. That doesnt mean you have to close your account but that you must get that service to do one of the following for you:
1. Move over your DD and Standing Orders from your old current account to A&L
2. Contact your employer about having your pay paid into the A&L account OR
3. Close your old account

moneysavingnoobie

Thanks for that Gambit..... still a bit disappointed though that they'll give me the account but not the OD as advertised.

Just wondering if anyone else had this problem?

Iwannabeamoneysaver

Hi Gambit

Thanks for that. Another option I was looking at was putting my overdraft on a Virgin credit card (0% for 16 months) and paying off that way. I just think I'd get muddled switching bank accounts!

Since you say you've switched bank accounts a couple of times, what do you reckon?

Gambit

moneysavingnoobie wrote: »

Thanks for that Gambit..... still a bit disappointed though that they'll give me the account but not the OD as advertised.

Just wondering if anyone else had this problem?

That is strange as I thought the minimum was £500. You mentioned that your existing current account doesnt have an overdraft so that might have something to do with it.

If you think you should have a good credit rating, it might be worth trying to get your credit reports from Experian, Equifax and Call Credit. Then if you send this to A&L along with a covering letter they may re-consider and give you an overdraft. Worse case scenario, at least you've got a recent copy of your credit report which its good to do every now and then to check there isnt anything on there that shouldnt be.

Gambit

Iwannabeamoneysaver wrote: »

Hi Gambit

Thanks for that. Another option I was looking at was putting my overdraft on a Virgin credit card (0% for 16 months) and paying off that way. I just think I'd get muddled switching bank accounts!

Since you say you've switched bank accounts a couple of times, what do you reckon?

The problem with the Virgin Credit card offer is that they charge a handling fee of 2.98% of the balance transfered. Having said that that's still probably a lot less than you are currently being charged for your overdraft by your current bank so still might be worth it. Something else to bear in mind is that the credit limit you receive will depend on your credit rating so you might not get enough to pay off your overdraft.

My advice would be to go with the A&L account as they will match your existing overdraft and in my experience were pretty good with their transfer service. I would suggest doing what I said though and only getting them to transfer your standing orders and direct debits. Then your pay will go into your present bank account and you can use a standing order to transfer money over to your A&L account in order to cover all your DD's. A&L are now sending and receving faster payments too so if your current bank does you could move the money across in a matter of hours.

Good luck and let me know if you have any further questions :money:

purplestar133

moneysavingnoobie wrote: »

Thanks for that Gambit..... still a bit disappointed though that they'll give me the account but not the OD as advertised.

Just wondering if anyone else had this problem?

I did when I did I applied last time round. They said 'due to my circumstances' they couldn't give me an overdraft and I DID have an overdrfat with my existing current account. I had to send them proof of my overdraft limit and then they matched it. That news doesn't help you though does it?