Not being overdrawn

sourcrates

Those of you of a certain age, will remember back in the 80’s banks were literally throwing money at anyone and everyone, pre-approved credit card offers coming every other day, cheap loans, interest free overdraft, it was a full scale onslaught.

I was 18, earning about £3.50 an hour, daft as a brush, and had about 10k in various debts, it was ridiculous, no diligence was done for affordability, and been young and stupid you took the money.

Those who say banks don’t lend irresponsibly never experienced the 80’s that’s all I can say.

[Deleted User]

sourcrates wrote: »

Those of you of a certain age, will remember back in the 80’s banks were literally throwing money at anyone and everyone, pre-approved credit card offers coming every other day, cheap loans, interest free overdraft, it was a full scale onslaught.

I was 18, earning about £3.50 an hour, daft as a brush, and had about 10k in various debts, it was ridiculous, no diligence was done for affordability, and been young and stupid you took the money.

Those who say banks don’t lend irresponsibly never experienced the 80’s that’s all I can say.

This was still going on in the late 90s and early 00s too. I was 18 and was receiving junk mail left right and centre (no idea where they were getting my details from) offering me credit cards.

Me being daft in my first job I took them regardless even though I didn't really need them what with still living at home and not having bills to pay. No idea where what all the money went on.

[Deleted User]

For my two peneth worth (sp?)

We currently have a massive OD, which after many, many months of nagging at DH we are now going to slowly get rid of it. We only increased it when DH was self employed (many years ago now and isn't now) and never got to getting rid of it.

When I spoke to the bank years ago about another issue, the lady I spoke to mentioned about our overdraft and I mentioned that the aim was to pay it off....her answer was that hers is £8K and she will never be out of it and she was a bank manager!

Claddagh_Noir

I have a £3000 overdraft. However, your attitude is the same as mine when it comes to mail order catalogues. I always take advantage of the Buy Now Pay Later promotions and always pay well before the period ends. I just hate owing money on the catalogue.

enthusiasticsaver

Deleted_User wrote: »

For my two peneth worth (sp?)

We currently have a massive OD, which after many, many months of nagging at DH we are now going to slowly get rid of it. We only increased it when DH was self employed (many years ago now and isn't now) and never got to getting rid of it.

When I spoke to the bank years ago about another issue, the lady I spoke to mentioned about our overdraft and I mentioned that the aim was to pay it off....her answer was that hers is £8K and she will never be out of it and she was a bank manager!

Banks have an incentive to keep people in overdrafts in that the fees are high. Even if she does have an £8k overdraft I am betting she gets hers free as a staff perk. If not I would query if she was in the right job. Years ago poor management of money was a disciplinary offence for bank staff.

BabyStepper

I have a £2,000 overdraft and I've had it for as long as I can remember. I didn't even need to go into the bank to get it, I just applied online and then kept increasing it to cover emergencies. (This was in the days before I had an emergency fund.) Somewhere along the line the size of the overdraft exceeded the size of my wage and I have never been in credit since.

I am just about in a position to pay it off over 2 months and can hardly wait. It is very demoralising to see your money in negative amounts. One of the things I'm looking forward to is not having to do a sum to check how much is available. It's tedious but should be gone by the end of April.

warby68

Never had an OD, neither has OH.

I arranged a £100 (was offered £500 ) one once in the 80's when there was a gap between my uni term ending and my summer job starting but never used it.

I've always worked in financial institutions, mainly with commercial and corporate clients and debt levels up to £10m. The thought process which sees an overdraft as a 'service' and an 'entitlement' whereas a loan is 'debt' and 'to be approved' is prevalent all the way up the food chain. When challenged on what is the repayment proposal for the overdraft, there often isn't one, just some magical future moment when the business ceases to be.

I'm still convinced though that there is a massive silent pool of people who never take unsecured borrowing and that a forum like this does skew the perception a little. I'm not saying there isn't a massive consumer debt issue just that the other side is big too, just more invisible.

angela110660

When my daughter left uni nearly 2 years ago she still had her student overdraft in place for a short period at 0%. She started work and put aside the money to clear it over a few months before the 0% ended. So proud of her and she has not been near an overdraft since and has (so far) steered well clear of credit cards too. MSE living/reading all these years by me and OH must have rubbed off somewhere along the line!

DrSpendLittle

When I had my LBM, my £1,200 overdraft was the first debt to go. I was so pleased to see a positive balance. I always felt embarrassed going into my bank to pay in cheques or service my account.

I got my OD when at uni - they threw money at us back then. One friend of mine had a £3,000K overdraft by third year. It was just so normal.

When I first got mine, I remember the bank lady asking me how much I needed. I said £500. Then, about 6 months later, I went back and asked for more. Easy peasy. Then more and more and more. And before I knew it, I was at £1,200. I was too ashamed to go back to ask for more (it was always the same lady; I can still picture her face, her clothes, her hair colour, her ruddy red cheeks!). So, I began using a second student account to secure an additional overdraft of, eventually, £1,600. I was always told you couldn't have more than one student overdraft. Somehow I managed it.

When I first applied for a mortgage, I was shocked to see my main current account overdraft wasn't on my credit report. I assumed my bank reported to the credit reference agency on pay day, so there was never a negative balance recorded.

All these little things kept me in my overdraft way longer than I should have been. My financial behaviour was never challenged. I got away with bad financial management. It's a shame there aren't more checks and balances IMHO.

FTBuyerGlasgow

Had a £3k overdraft about 3 years ago, got a Money Transfer card to clear it and set up Direct Debit to pay it off. Must have saved me about £50 a month in overdraft fees.

I was very much in the "overdrafts are normal" camp.