Should I put monet to overdraft even if I need to use hours later?

fitzykev

Hi can anyone advise me I am near at thr limit of my £1500 over draft. Should I pay some money towards it even if I have to reuse it hours later or is it better to put a set amount every month ? I just domt know if I should put my money towards it and leave my account empty then reuse overdraft until I find myself in a position thst I can start clearing it properly.

fatbelly

Overdrafts are typically a very expensive form of borrowing. Effective apr 40%

Where is this extra money coming from?

Most people would have their income paid into a bank account with an overdraft facility, then budget to try to stay in the black until the next payment goes in.

In conclusion stay out of the overdraft as much as possible

simonsmithsays

Sounds very abstract.

I'll get my coat 

fitzykev

My overdraft I on an account I don't use wh4n my wages go into my other account I try to transfare over what I can.  I just don't know if I should transfer all then use again

Kim_13

fitzykev said:

My overdraft I on an account I don't use wh4n my wages go into my other account I try to transfare over what I can.  I just don't know if I should transfer all then use again

It’s possible that the bank may remove the overdraft, or lower it as it is paid, especially as your regular income is no longer going into that account to service the debt. So I would transfer a small amount that you can commit to repaying, spend from the account you’re paid into and transfer anything remaining just before you’re next paid, so that you’re not at risk of being left without funds.

fitzykev

Wages never went into the account from the day the overdraft was applied 

fatbelly

So you have £1500 debt in an account that you don't use any more. Do you have other debts? It may be best to look at them as a whole, and ask on debt free wannabe

General_Grant

fitzykev said:

Hi can anyone advise me I am near at thr limit of my £1500 over draft. Should I pay some money towards it even if I have to reuse it hours later or is it better to put a set amount every month ? I just domt know if I should put my money towards it and leave my account empty then reuse overdraft until I find myself in a position thst I can start clearing it properly.

You seem to be using the account as a negative savings account.

If you remove money the same day as you pay it in, it will not change the amount of interest you will be charged.

What are the benefits to you of the account into which your regular income goes?  I'm thinking about things like cash back on purchases.

Kim_13

fitzykev said:

Wages never went into the account from the day the overdraft was applied 

That a bank haven’t done something in the past is no guarantee that they won’t do it in the future. Paying in any funds to that account that you may need to cover your living expenses is therefore risky.

You should put a set amount in, and more if you can afford at the end of your pay period. Interest applied will count towards the limit, so you need to be paying in enough that it doesn’t go over at any time. By making a regular payment towards clearing the debt, you reduce the likelihood of the bank requiring it to be repaid in full and on demand - which given that you don’t have the means to do this, would create a bigger problem for you (default or arrangement to pay marked on your credit files.)

PRAISETHESUN

Overdraft costs are calculated based on the balance at the end of the day. If you start the day with a positive balance, make a withdrawal that takes you overdrawn during the day, and then repay before the end of the day no fees will be charged. Conversely, if you start the day in OD, put money in during the day, and then go OD again before the end of the day, then you will be charged OD fees based on your final balance.

Obviously anything you can pay towards the debt will help to reduce the OD fees owed, but it sounds like you'd benefit from hopping over to the DFW board to get more information on the best way to tackle the underlying issues.

born_again

fitzykev said:

Hi can anyone advise me I am near at thr limit of my £1500 over draft. Should I pay some money towards it even if I have to reuse it hours later or is it better to put a set amount every month ? I just domt know if I should put my money towards it and leave my account empty then reuse overdraft until I find myself in a position thst I can start clearing it properly.

While not solving the root issue.
See if you can get a 0% money transfer credit card. Pay off O/D, close or switch acc for bribe. Then make sure you pay off the money trans card ASAP in the 0% period.

If you are constantly living in O/D then do a SOA & head to the debt board, where you will get non judgemental advice on the way out of the expensive problem.

https://forums.moneysavingexpert.com/categories/debt-free-wannabe