To ask if people still keep an overdraft and is it worth having one?

[MyAmusedOpalCrab]

I’m in my early 30s and have had a bank overdraft since my student days. I don’t use it anymore and haven’t for a while but it’s still technically “there” on my account, just in case.

Part of me thinks it’s good for emergencies but another part wonders if it’s better to get rid of it altogether. Do most people still keep one as a backup or have you closed yours off completely?

AIBU to think it’s just dead weight now?

I had one for years, barclays recently took it away as I didn't use it 😐 but I liked having it for emergencys.....

I find it handy!

Depends how you manage your accounts. If you nearly empty your current account each month either by spending or moving leftovers to savings or a joint account it's worth having in case of a duplicate direct debit. I keep a buffer in mine so have never requested an overdraft. I'd use my credit card for an emergency.

We have decent savings but have an overdraft just in case we need to be over for a day or so before we can move money

As long as it doesn't cost anything fine. Then if you do accidentally spend more than is in your account you get the item, you don't get charged fees and your credit doesn't get impacted. Just pay it back as soon as possible because there will be interest to pay.

Yes, the best thing to do is have the facility but not use it. If you need to manage cashflow, use a credit card.

It depends how big the overdraft is, what emergencies you are likely to face (E.g. if you have a pet with an injury or a condition, how much will your insurance pay out, what’s the worst possible case in terms of Vet fees? Etc.) and whether you have an emergency savings fund.

Being short on funds in our 30’s, and never having lost or broken things like laptops, phones, appliances Etc. We ditched the insurance for these items and saved the amount the premiums would have amounted to each month.

Within 5 years we had enough saved for repair and/or replacement of several appliances, and after 10 years we are approaching the £20k mark, and could easily replace every household appliance and personal device we own tomorrow, with change left to spare!

When you’re at the point that we were after 5 years, you could probably ditch your overdraft!

I have not used mine in over 20 years but I'm glad I have one for emergency use.

I’ve got a large overdraft facility but I’ve not touched it in years. I quite like having it though in case of dire emergency.

I'd still got a student one that seemed massive and I asked them to reduce it to a much smaller amount. I've not needed it tbh but I like having it just in case.

Have not used ours in the decades it has been available but it costs nothing to have so we leave it in place.

I’ve never had one before. It’s better to work on having savings.

I think it's good to know it's there if you need it

what's the benifit of not having it? I'm not good with this stuff and just thought it was there for free as long as it wasn't being used?

If it's free, I would keep it. All you need is for one payment in to be delayed and one out to be earlier than you expected and this protects you from that. You wouldn't want your savings in your current account so having more savings wouldn't necessarily help.

The hardest time to get an overdraft is when you most need one.

If you are a disciplined person and don't use it regularly, it's worth hanging onto for emergencies or rare situations.

If you will use it just because it's there, then get rid of it.

As a guideline, it should never be more than 75% your net monthly income, or you'll find it difficult to get out of if you ever use it fully.