Have I done the right thing

MERFE

I got a letter yesterday from the Halifax to say that on 11th June my arranged overdraft ends. I haven't gone over my overdraft limits since I was in my 2nd year at uni about 8 years ago and they have given me no real warning of this. The letter did say that I could apply for another but they wouldn't give it to me I wouldn't have thought as I only have the child benefit paid into that account and the occasional Quidco payment.

I do not want to start getting charges for unauthorised overdrafts as we simply could not afford it so I've transferred enough money from my MBNA credit card into my halifax account to cover this overdraft and another Halifax overdraft we have as I antisipate them doing the same to this account. Only a week ago I was speaking to my mum about doing this as I felt we would make more effort to pay off the credit cards but struggle to pay back the overdrafts and not use them again. Whereas I find it really easy not to use a credit card. In our monthly budget now the payments that were going to pay off the overdrafts are going to go towards the credit card and we will not be able to use the overdrafts again if they are cancelled. The interest rate is also slightly lower on the credit card. I just dont know if perhaps I rushed a bit and it feels wrong to be putting more money on a credit card.

mrcow

Have you done the right thing?......

Well what interest rate was your overdraft at and what rate is your credit card cash advance at? Was there a BT fee? How much did you transfer and how much are you going to be paying towards it per month?

MERFE

Hi its not a cash advance because MBNA do balance tranfers to your bank account I think they call it a money transfer the rate on the card is at 15.9% and the overdraft was 18.9. I'm not sure what the fee was although I am aware there is one. Repayments are budgeted at the moment for 90 pounds per month, it'll be the card with the highest interest rate so we will aim to pay this one off first whilst still making reasonable payments on the other cards we have.

Would I not have got charges for being overdrawn on my halifax account after the 11th June?

mrcow

Well they may well have given you the overdraft extension. If you are using your overdraft and paying them interest without abusing the limits, then I can't see why they wouldn't have done tbh, regardless of how much gets paid into it each month. I have overdraft facilities (used or unused) on all my current accounts......most of which have no large amounts of regular money coming in.

MBNA charge around a 3% fee....although I think you should have called them first and tried to negotiate a 0% deal on the BT.....they are always offering deals to existing customers (although you would still have had to pay the fee).

I guess that at least you have a repayment system in place now, although I think you could have got it cheaper.

MERFE

I think you are right and I probably could have gotten it cheaper. I dont think the halifax would have let me keep it but I guess I'll never know I am glad to be rid of the overdraft, I've transferred 1750 pounds, which almost covers both account overdrafts, about 100 pounds short but I should be able to cover that with a transfer from paypal by the end of the month and the halifax havent cancelled the 2nd one yet. I will not be waiting for their letter once its all paid off I'll go in and cancel it myself.

I do feel a bit better, thanks for teh replies, yes we will be making regular repayments this way and it'll be nice to see it going down, whereas it is confusing when money is going in and out all the time and it sometimes get into the black then a big payment comes out.

Does anyone know how difficult it is to move where your child benefit is paid into, cos if I did that I could close the account altogether.

mrcow

Try here:

http://www.hmrc.gov.uk/childbenefit/bank-account-details.htm

Make sure that you give it a couple of months for the benefit to be going into the new a/c before you close all the facilities off the old accounts.

regularsaver1

some letters of this kind from Halifax re overdraft were sent in error, so check as yours might not be ending as it says, just a review date being added