Paying off student account overdraft

toniwoty2009

Hi all,
Hoping this is the right place to post!
My OH has a £1,300 overdraft on his current account (it was a student account). We are now applying for an Alliance & Leicester joint account (the one Martin recommends). Problem is at the moment his o/d is interest free as he keeps paying money in it (or thats what he seems to think) but obviously if we do the premier switch with A&L nothing will be going it so he says interest will be charged - can this be right?!
our other problem is he will never pay it off all the while thats his main account as he just keeps using it! So I suggested treating it more like a credit card debt and paying a bit to it each month but this can only be done if he has a different main account.

Someone help me untangle this please!

morg_monster

Yes he should be trying to pay it off like a credit card if he wants to get rid of it.

It is unlikely that the money coming into his overdraft account (or the A&L account) HAS to be salary. He can have salary paid into one and then transfer an amount into the other, to satisfy A&L's funding requirement and keep the OD interest free.

But check - the OD may still be interest free regardless of money being paid in. My student account was interest free for a set amount of time after I graduated, I didn't have to keep paying money in I don't think.

Also - your OH could open his own account with A&L too, and ask if they can match his overdraft. It will be interest free for a year, but like you said, he needs to be disciplined about paying it off each month if he wants it gone within the year, and this may be harder to do when all your incomings and outgoings are going from the same account as the OD.

MinniMe_2

Who is the student overdraft with - the terms about paying money in differ between banks

toniwoty2009

Its with the Abbey.