Living in overdraft, charged £1 a day...

[NormaReedus]

When I opened my bank account many years ago this wasn't in place, Santander now charge £1 a day to be in your agreed overdraft.

I'm very rarely out of my overdraft, shit but just the way it is, so I'm getting charged £30 a month really for this account.

What are my options as I can't go on like this?

I opened another bank account with a different bank and was thinking of transfering my balance (inc overdraft) to the new bank then calling Santander that I want the account closed after I've repaid the over draft at £50 a month, would they put the account oh hold whilst I did that?

I'm scared if I ring them and explain beforehand they will just take the full overdraft away affectivly leaving me with nothing (another bank did similar to my mother)

And If I just pay it off whilst still using it Its going to cost me hundreds in agreed overdraft fees.

How much is the odraft for? Can you set up a standing order to reduce it each month?

This article on balance transfers might be useful to you.

However, if you can get your debt to a more manageable location, you need to look seriously at how you pay it off. You might want to look at the Debt-Free Wannabe board for ideas.

www.moneyadviceservice.org.uk/en/articles/where-to-go-to-get-free-debt-advice

they might help

www.moneyadviceservice.org.uk/en/articles/where-to-go-to-get-free-debt-advice

You have to treat the overdraft as any other debt, pay it off with cheaper credit, and make it hard (preferably impossible) to dip into it again.

I was in the same position a year and a half ago, when I paid off my overdraft with a 0% on "money transfers" credit card, then moved to a bank account with no overdraft facility... Seeing as I know I can't trust myself with them. Then, as I didn't have to pay any interest on the debt for 18 months, the £30 per month I would've paid in fees actually came off the debt instead. Actually, I committed to pay a lot more than that each month, so I completely cleared the overdraft before the interest free period expired. It wasn't a lot of fun, I Can tell you, but it got it out of the way quick. If you know you won't be able to pay it off over that term, you might have to switch to another credit card.

Of course there are drawbacks here... You need to qualify for the credit card first off. And it has to be one that does 0% on money transfers (ie: money straight to your account, not just paying off another credit card which is the norm). Also, you'll have to factor in a percentage fee when you set it up. And you have to be disciplined enough to not use your overdraft anymore, or use the credit card for ANYTHING else (these ones tend to be a rip-off for purchases... I cut mine up the day I got it). It gets riskier if you're counting on swapping to another card in a year or so... Who knows how easy or expensive that will be at the time. And of course, you'll still have to fork ou if you want rid of the debt. And it only works for a static overdraft... It won't be a lot of help if you're regularly spending more than your income. But if you can work within those limits, it's about the cheapest way to borrow, leaving you a bit spare to clear the debt.

How big is the overdraft and how long will it take to pay off? I'm guessing that it is a big overdraft as you are being charged for every single day in the month which means that you are still overdrawn when your wages go in?
I think the best option might be to consider a low interest loan to clear the overdraft and then repay the loan in manageable monthly payments. Might also be worth asking the bank to remove the overdraft facility once you are back in credit to prevent sliding back into an overdraft.