Switching to joint account what happens with our overdrafts!

Kitty86

Hello there,

forgive me for typos I’m dyslexic with a auto correct that can’t understand

my husband and I after 11 years decided we want to have a joint account. It’s becoming a pain to keep track of bills and also both being paid different times of the month.

We both have overdrafts that we want to eventually reduce and get rid of. Sadly both had them since being students although we have lessened them they are there.

I have contacted my bank and his but neither will tall us what exactly they will do with the overdrafts if we switch to another banking provider.
ive asked if we can set up a payment plan to pay it off but they just say we will see when you switch?!

anyone have any clarity on this.

ideally move to husbands bank account and close mine and pay off overdraft £650

or both of us leave said banks and pay off our overdrafts 

colsten

Nobody here can tell you what your or your husband's existing banks, or your new bank, will offer you in terms of overdrafts. You really have to settle these questions with them.

I would say, though, that overdrafts are now one of the most expensive way of borrowing and you might do better taking out a loan that you pay off as soon as you can. An interest-free overdraft deal might be another option - see https://www.moneysavingexpert.com/banking/cut-overdraft-costs/

You could also consult the Debt-Free Wannabe board to figure out possible ways of improving your budgeting. A joint account won't remove your issues, you need to get on top of your budget.

Thrugelmir

Before switching. Have you considered applying for a personal loan with your existing bank to clear the overdraft. Last thing you want is to be pursued once you leave for the full balance.

Kitty86

I agree that budgeting is key and I want to get out of the mindset of “available balance”

I have good credit so could do a loan to pay off both overdrafts first before switching prehaps?

I rang HSBC and they just said you would need a payment holiday to pay off overdraft? You can’t leave until you have done that if the other bank won’t take your overdraft on.

I explained I want to pay the amount back monthly 

eskbanker

Kitty86 said:

I rang HSBC and they just said you would need a payment holiday to pay off overdraft? You can’t leave until you have done that if the other bank won’t take your overdraft on.

I explained I want to pay the amount back monthly 

It's perhaps helpful to think of it not as switching your overdraft but borrowing enough money from your new bank to pay off the overdraft on the account with your old bank.  The switching service entails the old account being closed and the old bank won't be able and willing to close off an overdrawn account, so that'll be why they're effectively saying that you have to repay it before (or during) leaving.  It's one thing to owe money to a bank as a result of an overdraft on an active account, into which your monthly income goes, but an entirely different risk for them if you've moved on elsewhere, so if you're wanting a payment plan then you'll need to arrange this with someone other than your old bank.

Fortunately, account opening and switching are two separate processes, so you can establish what sort of overdraft (if any) your chosen new bank is prepared to provide, and if it's insufficient to repay the debt to the old bank, then you have time to make alternative repayment arrangements before starting a switch.

VXman

Are you both with the same bank or different banks? If the same, would the bank not combine your accounts for you and therefore amalgamate the overdrafts?

colsten

Kitty86 said:

I have good credit so could do a loan to pay off both overdrafts first before switching prehaps?

That sounds most certainly one of your best options. It will also save you a lot of money because the interest rate on a loan will be nowhere near as extortionate as the one on the overdrafts. Did you check the links I posted earlier?

Jami74

Kitty86 said:

my husband and I after 11 years decided we want to have a joint account. It’s becoming a pain to keep track of bills and also both being paid different times of the month.

Rather than switching your sole accounts into a joint account, would you consider opening a joint account and keeping your sole accounts? You wouldn't need an overdraft on the joint account and could maybe each transfer a set amount into the joint account each month to cover the bills. There are disadvantages to only having a joint account, for example personal spending (presents for each other).

If you did want all your income going directly into the joint account, you'd be left with the sole accounts unused other than deposits each month to pay off the overdrafts.

Money transfer credit cards can also be an option for paying off the overdrafts if you can get one at 0% interest and a small or 0% fee. You can treat it like a loan, (divide the amount borrowed by the number of months interest free and pay that each month) with the added bonus that it is easy and free to make additional payments to get it paid off sooner.

Robin9

Agree with @Jami74

And use a different bank to what you have at the moment -  banks have been known to have IT troubles.

Grabs39

Jami74 said:

Kitty86 said:

my husband and I after 11 years decided we want to have a joint account. It’s becoming a pain to keep track of bills and also both being paid different times of the month.

Rather than switching your sole accounts into a joint account, would you consider opening a joint account and keeping your sole accounts? You wouldn't need an overdraft on the joint account and could maybe each transfer a set amount into the joint account each month to cover the bills. There are disadvantages to only having a joint account, for example personal spending (presents for each other).

This is what my wife and I do.  We get paid into our sole accounts, then transfer most of our money to the joint account to cover Mortgage, bills, food and some leisure expenses.  We’ve always done that since we first moved in together and it’s always worked for us.  We keep some back as “pocket money” for buying things for our own hobbies, or buying presents etc.

Incidentally i also agree with having separate accounts at separate banks just in case.  A colleague of mine had one account jointly with her husband (and no credit cards).  Someone cloned her card and withdrew everything.  The bank sorted it eventually, but for a while she had to borrow cash from her mother just to buy groceries.  There could also be IT failures (remember TSB a couple of years back)

Kitty86

After looking at my husbands overdraft and mine and everyone’s comments I’ve added myself to his account. I then plan to switch all my direct debits and wage to his, leave my bank open and pay the overdraft off if there is any overdraft it’s £650. I don’t the bank would demand the money in one lump if I’m paying monthly and it’s still active? 

I plant to reduce my husbands by living within our wages but reduce it by £100 each month so we are spending £100 less a month and effectively paying off the over draft if that makes sense? 

I wanted to move us both to another bank but I cannot handle the stress of two banks overdrafts.

is there a quick way to switch all my direct debits and wage to my husbands bank account, without closing my original bank account?