£2000 overdraft and me

jackcos

As a university student (I left uni about 5 years ago) I fell into the trap of student account overdrafts. In the time since I fell in and out of that overdraft so often, and in the last 9 months or so I fell deep into it. Big mistakes, I know. It leaned heavily on my depression and a long stretch where I was unable to work.

A few weeks ago, I exceeded the £2000. I reached about -£2,050. That's when I started getting letters, about a week ago. Letters talking about closing my account, putting info on credit files and such. I wasn't sure what to do.

Because, at the same time, I had found work. Full-time well paid work. I'm finally at the point that I'm earning again. Not quite enough to clear my overdraft in full, but the point where placing £500 a month into my bank account would see overdraft fees eat into my earnings.

I looked into money transfer cards. Alas, my credit rating is too poor to secure any of the money transfer cards suggested in this article here: https://www.moneysavingexpert.com/credit-cards/money-transfers/ (it's also so poor that I can't secure either of these, too: https://www.moneysavingexpert.com/credit-cards/bad-credit-credit-cards/ )

So this leads me to three big questions:

Has my bank overdraft situation killed any chance I have of getting a card or loan/mortgage for a few years?

How do I get myself out of my overdraft without incurring massive fees?

And however do I go about improving my credit score?

TheAble

I don't quite follow you. Why would paying off £500/month mean fees eat into your earnings?
I would have thought the best thing to do here is simply pay off the overdraft as quickly as possible.

sourcrates

Nothing has killed anything, try and pay off the OD as quickly as you can, time and a good payment record will heal your credit file.

jackcos

TheAble said:

I don't quite follow you. Why would paying off £500/month mean fees eat into your earnings?
I would have thought the best thing to do here is simply pay off the overdraft as quickly as possible.

Apologies, I didn't make myself clear.

I'm referring to overdraft fees. If I placed £400/month then my OD fees would accrue over the month before I put anymore in.

Referring back to my original question, is there any alternative to the money transfer cards that would see me avoid these daily fees?

jackcos

sourcrates said:

Nothing has killed anything, try and pay off the OD as quickly as you can, time and a good payment record will heal your credit file.

Even though I wasn't even eligible for the most basic low-credit Amazon credit card?

TheAble

jackcos said:

TheAble said:

I don't quite follow you. Why would paying off £500/month mean fees eat into your earnings?
I would have thought the best thing to do here is simply pay off the overdraft as quickly as possible.

Apologies, I didn't make myself clear.

I'm referring to overdraft fees. If I placed £400/month then my OD fees would accrue over the month before I put anymore in.

Referring back to my original question, is there any alternative to the money transfer cards that would see me avoid these daily fees?

Are you not currently paying fees? In answer to your other question, your credit file may not be great now but will heal over time as Sourcrates says. In any case the last thing you need right now is more credit!

Smashingitnow

I think most humans (lots of evidence on these boards of this) would in reality NOT pay off the credit card and very many would then go on to get a second card etc etc
It's this shared psychology that fuels the credit industry.
So that's why the advice you are getting is to suck it up on the fees and pay off the overdraft without looking for other options that are simply getting you further mired in credit contracts at a young age. 

Galloglass

Has my bank overdraft situation killed any chance I have of getting a card or loan/mortgage for a few years?

No as it is based on affordability. If you pay down your OD then you show you have surplus for a loan/mortgage. 

How do I get myself out of my overdraft without incurring massive fees?

Pay it off is the best way to reduce fees. If you paid it off at £400/month over 5 months, the total interest is over the five months is about an extra £100. Not massive.

And however do I go about improving my credit score?

These scores are nonsense and don't reflect the real world. To get the perfect score, you have to be in a position never to need to borrow.