Overdraft or Savings?

[Deleted User]

Pay off the overdraft and save the £90 a month you save in fees into a savings account.

mwarby

Sounds like the OP needs to learn how to budget, as if the overdraft isn't cancelled it'd be easy to drift back into it

eschaton

binaryuniverse wrote: »

Umm. If they pay it off then they won't be. Like I said, it's the option should an emergency come along.

They didn't pay the overdraft off, just kept adding to it.

A credit card limit would likely be seen as a target as well.

binaryuniverse

eschaton wrote: »

They didn't pay the overdraft off, just kept adding to it.

You've read the part about having £5000 'gifted' to them, yes? They'd use this to pay off the overdraft.

A credit card limit would likely be seen as a target as well.

That's a presumption, since the OP has not stated how they managed to be in that position of having such a large overdraft.

Even so, I have not suggested take out a credit card and start spending on it. More that that is an option, should they need emergency funds, after using the £5000 to pay off the overdraft.
The OP is loathe to use the £5000 to pay off the overdraft, in case they need a rainy day fund, and the bank withdraw that facility.

I am not here to tell them how to manage their affairs. Merely present the options.

mwarby

Worth bearing in mind this doesn't have to be a binary choice of pay off the overdraft or keep in savings. One option would be to use say £4k to reduce the overdraft and keep £1k as emergency savings. If that reduces the substantially reduces overdraft fees, the reduced fees could allow the overdraft to be cleared in a year or so.

eschaton

binaryuniverse wrote: »

You've read the part about having £5000 'gifted' to them, yes? They'd use this to pay off the overdraft.



That's a presumption, since the OP has not stated how they managed to be in that position of having such a large overdraft.

Even so, I have not suggested take out a credit card and start spending on it. More that that is an option, should they need emergency funds, after using the £5000 to pay off the overdraft.
The OP is loathe to use the £5000 to pay off the overdraft, in case they need a rainy day fund, and the bank withdraw that facility.

I am not here to tell them how to manage their affairs. Merely present the options.

That's not even worth replying to in detail.

binaryuniverse

eschaton wrote: »

That's not even worth replying to in detail.

I'll take that as a concession that my point is valid.

eschaton

binaryuniverse wrote: »

I'll take that as a concession that my point is valid.

If that makes you happy then fire in.

Can't be bothered explaining the basics to you.

Fan_Of_2018

Besides for the question what to do with the £5000, check out other parts of this website for a better way of managing debt without paying over a thousand pounds a year.

binaryuniverse

eschaton wrote: »

If that makes you happy then fire in.

It does. Thank you.