Not being overdrawn

Plumjam

So here's my story. Back in the 80s wanting a champagne lifestyle on a lemonade budget, I just took money out of my bank account until one day the bank phoned me (they did that in those days) and told me I was £400 overdrawn and they wanted their money back. I panicked and we negotiated £50 a month until it was paid off. Still wanting the champagne lifestyle, I then took out store cards and would buy goods in one store and then return them to another where they would give me cash (another thing they did in those days)! Did that many times to finance nights out or holiday spending.
Couple of years later I was in a much better job and decided on 18 months before I'd get a mortgage and buy my first flat. I realised that the mortgage would cost me about £500 more than my rent so I religiously put £500 away each month to prove to myself that I could afford the mortgage.
Then one day 'ping'! LBM! I realise I had loads of savings paying very little interest and loads of debt on which I was paying huge interest. Paid off all the credit and store cards and have never been in debt since. I use credit cards all the time but only to get the rewards and they are paid off in full every month. The very thought of having an overdraft feels me with dread. My sister on the other hand, who has a very very champagne lifestyle, tells me that she's never any less than £10,000 overdrawn. Eek!

spudsmum

I also had a large overdraft, like many I was given one automatically when I started uni. With no parental support and limited income it was very easy to fall into using it and it was cheaper than using credit cards for borrowing,

After uni I just kept it on - I had hopes of paying it off but it's not as easy as just wanting to. I HATE being in my overdraft as much as I hate using my credit cards (it's no different to me really - debt is debt)

At one point I was still overdrawn when I got paid as my wages were not enough to cover what I owed which was really worrying. Now I make an effort to be in my overdraft less on payday than I was the previous month, even if it's by pennies but it's not easy if we get an unexpected bill.

Just when we finally started getting somewhere my bank introduces daily OD charges which increase the interest and make it even harder to get out so not only do I have to spend less each month I also have the charges coming out every single day.

I'm now 10 days after payday and just about to go into my overdraft so I'm in a much better situation than I was but conscious if I have an emergency or a large unexpected bill that progress could be wiped out in one go

DD265

Like many others on this thread, I also got an overdraft and credit card ('just in case' is what I was told) with my student account.

Luckily I never paid charges on it, as the bank slowly lowered the interest/charge free portion after graduation and I was given a gift from a family member that allowed me to clear it. The bank were surprised when I cancelled it completely and tried to convince me to keep £100 or something. I could have a small amount 'free' now but I don't entertain the idea.

Overdrafts seem to be the worst possible form of debt to me. At least with all the others I know of - credit cards, loans, car leases - you have a regular minimum monthly payment. There's nothing forcing you to pay an overdraft off, and personally I found it to be hard to distinguish between my money and the overdraft because I always focused on the available balance, rather than the actual balance.

Sanctioned_Parts_List

I have quite a large agreed overdraft limit - the default provided by the bank. I'm quite grateful for it when my expenses are reimbursed late. It means I can keep my cash in its savings account earning interest for the 48 hours or so it takes to motivate accounts payable to do their jobs...

I wouldn't live in it, though. It was bad enough as a student.

[Deleted User]

enthusiasticsaver wrote: »

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.

I never thought to ask at the time. I was just shocked that she admitted it to me, a customer...could be that she was trying in her own way to say to not get rid of mine?

Didn't know about the disciplinary offence bit....that's interesting to know.

Singlespeeder

I have a bunch of other debt, but getting rid of my £1200 OD is important to me. I think I have done it today by selling some shares I've owned (but had no access to) for 10+ years.
It'll take afew days for the payment to make it through to my account but I hope that by next Fridays payday, I'll be starting from a + number, not the usual - one.

Working_Mum

This is a sign!!

When I was married (and had been a previous high earner) there was a £10k overdraft facility on the joint account - I divorced and my (spender) of an ex-husband refused to pay his half (in amongst a whole load pf other shady stuff) so i repaid the lot.

I have a small interest and charges free overdraft of £600 - I was considering paying it off next Friday and striving to run my account in credit from April. This thread has inspired me to do just that!!

THANK YOU ALL!!

chelseablue

Working_Mum wrote: »

This is a sign!!

When I was married (and had been a previous high earner) there was a £10k overdraft facility on the joint account - I divorced and my (spender) of an ex-husband refused to pay his half (in amongst a whole load pf other shady stuff) so i repaid the lot.

I have a small interest and charges free overdraft of £600 - I was considering paying it off next Friday and striving to run my account in credit from April. This thread has inspired me to do just that!!

THANK YOU ALL!!

You can do it!

Pip_Boy_111

I was offered an O/D when I first started working in the bank. I took it and increased it many times over the years and came to think of it as "my money". Many times I have paid chunks off only to reapply for a higher limit next time round. Since the LBM, this has been my priority to eliminate (alongside other minimum payments). It is very easy to forget it is a debt and just see it as part of your money. At times in the past my wages haven't even cleared the negative balance!! At it's highest I think it was over £2000 and is now down to £750. 2 more months and it's gone.
It is worrying how people see it as something other than a debt, I know I did. It's only when look back at the charges on annual statements over the years I realise just how much it's cost me!!!!

db2016

interesting topic - late to it i know but just reading a DFW who linked to



i went to uni, late 2000s - got given 2000, and ended in 2016 when it had 2600 in it and i entered a formal debt solution.



basic bank account now, and dont miss it, but was wondering, if in the future, a lil £100 or so may be useful to have, more in the terms of it being a credit product so having one (rarely or never using it) may be good for the rebuilding of credit ratings?