We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Overdraft - Lloyds Daily or Savings?
Options
Pennypanj
Posts: 22 Forumite
Hi,
I am currently living in an overdraft with £2000 by the end of each month. The Lloyds daily overdraft charge is being applied and I hate it...even if I don't spend from my account, the statement shows an amount being taken every day...My first tactic to minimise the fee is to use my interest free Barclaycard for any non-bill spending and to pay the card off one day before payday, using the remainder of my overdraft...so, only being overdrawn to the max for one day.
My bills come to roughly £1000 per month (including mortgage).
I have £500 in another account and am getting a bonus for Christmas...so my question is-should I keep a separate pot of savings , or should I use this to reduce my overdraft?
I like having a separate account for emergencies (house renovation ongoing) but also equally hate the daily overdraft fee!
Advice very much appreciated!
Many thanks :beer:
I am currently living in an overdraft with £2000 by the end of each month. The Lloyds daily overdraft charge is being applied and I hate it...even if I don't spend from my account, the statement shows an amount being taken every day...My first tactic to minimise the fee is to use my interest free Barclaycard for any non-bill spending and to pay the card off one day before payday, using the remainder of my overdraft...so, only being overdrawn to the max for one day.
My bills come to roughly £1000 per month (including mortgage).
I have £500 in another account and am getting a bonus for Christmas...so my question is-should I keep a separate pot of savings , or should I use this to reduce my overdraft?
I like having a separate account for emergencies (house renovation ongoing) but also equally hate the daily overdraft fee!
Advice very much appreciated!
Many thanks :beer:
0
Comments
-
You have no savings because you owe more than you have cash. You also can't afford your house renovation because you are living in your overdraft. You need to get this overdraft sorted out ASAP as you are in debt crisis. That involves stopping the house renovations, using money you have to pay it down and moving anything outstanding to the cheapest borrowing you can, i.e money transfer credit card.
Only once you've done that can you then build up a buffer and then continue with the house renovations.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
Hi Pennypanj
Your overdraft presumably accrues interest at a faster rate than any savings you have or are likely to have. You should therefore attack the overdraft as aggressively as possible and if, as tarambor suggests, that means delaying certain (non-essential) outgoings, then so be it.
Good luck
Dennis
@natdebtlineWe work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 350.8K Banking & Borrowing
- 253K Reduce Debt & Boost Income
- 453.5K Spending & Discounts
- 243.8K Work, Benefits & Business
- 598.6K Mortgages, Homes & Bills
- 176.8K Life & Family
- 257K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards