Anyone else reducing their HSBC/First Direct Overdraft?

FIRSTTIMER

Following the price hike....

I have reduced mine down from £3000 to £1000 and have taken out a 0% card as my emergency (amongst savings of course too!)

Willing2Learn

If you are continuously using your overdraft facility, then it could imply that you are living beyond your means. Much better to have a monthly budget that enables you to save for emergencies...

FIRSTTIMER

Said a wise guy

daveyjp

If you have savings why have an overdraft?

Ben8282

daveyjp wrote: »

If you have savings why have an overdraft?

Exactly. And why keep the 0% card for an emergency and continue to pay intertest on the overdraft?
If you were in a position to reduce your overdraft use from £3000 to £1000 why didn't you do it before now instead of paying interest on your overdraft and making it look to your bank and anybody that you applied for credit to that you were living in an overdraft?
And if the savings were/are in an HSBC account earning pennies while you are paying interest on the overdraft .....

YorkshireBoy

I read it a different way. The OP has reduced the overdraft FACILITY, not the overdraft itself by paying it down.

On the, hopefully rare, occasions it was used, circa 15.9% EAR wasn't too bad. 39.9% has just made them think a little more about it. And that's a good thing.

For those not paying attention to their bank balances and therefore prone to the odd use of the overdraft facility, then shifting some funds permanently from savings into current account will cost them £14.50 per £1,000 per year at 1.45%...a price worth paying so long as you see £1,000 or whatever as your zero point, not zero itself.

born_again

FIRSTTIMER wrote: »

Following the price hike....

I have reduced mine down from £3000 to £1000 and have taken out a 0% card as my emergency (amongst savings of course too!)

Just out of interest. Do you use your overdraft?

Can't see the point of a 0% CC for emergency. As you can bet that you will only need it after the 0% has run out...

Let me guess on that, when you reduced the O/D they offered the CC on the basis that it would be handy due to the reduced O/D :cool:

Ben8282

YorkshireBoy wrote: »

I read it a different way. The OP has reduced the overdraft FACILITY, not the overdraft itself

You could well be right but a strange thing to do. Reducing an unused overdraft facility will not look good on OP's credit files and is a bit like somebody reducing the credit limit on a credit card that they pay in full every month because the lender has increased the APR on the credit card.