Not being overdrawn

chelseablue · 7 March 2019 at 12:51PM

Was taking to a lady at work about debt in general and she said to me "We got paid yesterday and I'm already £1,300 overdrawn"

She didn't seem overly concerned about it

I'm 35 and have never been overdrawn or had an overdraft, I think I'd be really depressed if I logged in to my bank account and saw it was in minus

(The above is not meant to sound like a boast, I do owe on my credit card!)

It just seems that overdrafts are the norm these days

Am I in the minority of never having used one?

spadoosh · 7 March 2019 at 1:01PM

13 million people overdrawn over any given 12 month period and 2 million people stuck in an overdraft at any given time.

You wont be alone but you are more towards the rare end of the scale.

I can imagine the selling of student overdrafts and large increases in the student population have normalised overdrafts as a form of borrowing over the last few decades. Most people i know who have overdrafts got them at uni, and inevitably couldnt pay them back within a year of finishing either putting money on other overdrafts or consolidating in to a loan to ultimately find out the original lender doesnt withdraw the overdraft after threatening to do so.

A_Random_Man · 7 March 2019 at 1:06PM

I have had overdrafts in the past but never used them, I used to work for a bank in retail so I saw some of the consequences of having an overdraft so I stay well clear

EssexHebridean · 7 March 2019 at 1:31PM

I have an overdraft facility available on both my accounts - these days never get used at all - in the past I was one of the many who saw "running out of money before the end of the month" as just one of those things that happens, though. I turned that around (for my own and our joint finances) in 2008. Those who notice my length of membership on here may spot a correlation.

I suspect the vast majority of people simply don't realise how "dangerous" overdraft debt is - firstly because of the risk of the facility being withdrawn at any stage, secondly because it means you are relying on "someone else's money" to fund your day to day lifestyle and thirdly because of the casual acceptance - indeed often even expectation - of this state of affairs. A lot of people who have no CC debt, no loans etc and would be horrified if you described them as being in debt are heavily into overdrafts because they just don't see it as "debt". (Try asking them, how they'd find that money if it was demanded back tomorrow and that puts a different perspective on it, though!)

LoulaBelle · 7 March 2019 at 1:56PM

We used to use our overdraft all the time - but I think the worst time was doing my xmas food shopping and my card got declined as we were at the absolute limit - my husband is self employed and forgets to pay himself - I was mad but he transferred the money straight away. Looking at the charges we were getting each month we have just these past 2 weeks turned it around that we are not going into the overdraft anymore.

Sanctioned_Parts_List · 7 March 2019 at 2:55PM

spadoosh wrote: »

I can imagine the selling of student overdrafts and large increases in the student population have normalised overdrafts as a form of borrowing over the last few decades.

Exactly this - when I started uni some *mumble mumble* years ago, all the major banks and mobile phone networks had stands dotted around campus, the most cynical being just outside the doors of the union bar, and just outside the treasury hall where students collected their loan cheques.

The entry level student account came with a £1500 overdraft facility, a £3000 no-questions asked credit card, debit card, cheque book... probably now google/apple pay support, too. All this for people with NO regular income, beyond the loan, which arrives as a lump sum, and is often part of the water supply by the end of the month in which its received...

enthusiasticsaver · 7 March 2019 at 3:08PM

We have never used one. We have a £100 limit just in case an error in mathematics takes us under but these days we keep a buffer in our current account anyway. Overdrafts are one of the most expensive forms of debt and can be withdrawn at very short notice.

I would imagine many people do use one for several reasons. Banks encourage the use of them to entrap people into debt I think by offering free overdrafts which then of course convert into paid overdrafts and by then people are in a position that they cannot easily get out of the overdraft limit. This includes students and new graduates.

Watching the balance in your bank account takes financial discipline and whilst it might be common on here for many to keep a record of what is in their account I suspect there are many who dont know and if they have an overdraft facility do not worry about it too much. Of course it can be an issue when you go into overdraft earlier and earlier after being paid and being overdrawn often seems to normalise it in many peoples mind so they think the overdraft limit is actually money they can spend rather than it being a one off facility for an emergency.

enthusiasticsaver · 7 March 2019 at 3:12PM

A_Random_Man wrote: »

I have had overdrafts in the past but never used them, I used to work for a bank in retail so I saw some of the consequences of having an overdraft so I stay well clear

I used to work in a bank many years ago as a mortgage arrears counsellor and there is nothing like that job to ensure you stay out of debt as far as possible. You see first hand the misery uncontrolled debt can have and how quickly a bad situation can turn to tragedy where people have lost their homes, pensions etc when they get into debt spirals. An overdraft is often the first step.

natlie · 7 March 2019 at 3:30PM

I have a £250 overdraft which is a safety net as husband is self-employed and his payments can come in late some months

gardner1 · 7 March 2019 at 3:43PM

Friends of ours must bring in £70k between them and haven't got a pot to p155 in go out for a drink with him he's almost checking down the sofa and in jackets to find a tenner.
They live in a house that's falling to bits in Lancashire and have never had any money sense in all the years we've known them it just runs through their fingers like water.Up to eyeballs in debt but will still go shopping and buy absolute 5h1te for the house

Granted years ago they had a business go belly up which was hardly a surprise after reading the investment guff they tried to hand round family & friends,most of whom ran a mile but a few gullible saps invested never to see a penny again

Shashwoo · 7 March 2019 at 3:44PM

This type of thing astounds me.... I'd never heard of it until recently.
We have a joint account and it has a £300 OD on it, there are no charges for using the £300 and it is a safety net only.
I cannot fathom when people say they have a massive OD.

Not being overdrawn

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