How to kick 2k overdraft

[Mummingainteasy]

So, me and DH are at the point of going over our overdraft. We have a loan loan with 3k left to pay and a credit card with just under 2k. On our wages, we can afford the payments for these but we got into our overdraft and are struggling to get out!

Any tips for getting out?? Is it worth setting up a new bank account and starting again? That way we wouldn't keep going into the overdraft and could pay it off? I'm not sure what the do's and don'ts are, so any advice is welcome!

Thanks xx

So seven thousand altogether?

You need to find out which debt is costing you the most each month and reduce that one first.

Write down all of your incomings and outgoing and see how to get them down,

Can either of you do any more hours at your current jobs?

The debt free wannabe board on money saving expert is excellent, and got me out of a big pickle ten or so years ago.
Regarding the overdraft, psychologically it might help, but if you get charged on the balance, it'd cost you more as you wouldn't have your money in there for part of the month.
I also recommend YNAB (you need a budget). I'm an accountant and it does more for me than my fancy spreadsheets

Yes, it's around 7k overall. We know it's the overdraft with the highest interest/charges which is why we are looking for ways to help get us out of it. Technically on our wages we can easily over pay on the loan and credit card, it's just getting ourselves into the position of being able to do that.

My youngest child starts school in September so I'm looking around for jobs with more hours for then!

lapuf I hadn't thought of that. See, I'm no good with these things!!

Will check our YNAB x

Can you consolidate all 3 in to a loan? Would you qualify for a low interest rate?

Have you considered a cash balance transfer from a new credit card? You can get them interest free, but there is a fee for the transfer. That way you pay it back without the interest. If you do that, I would suggest reducing your overdraft to £250 so it’s strictly emergency money or get it taken off your account all together. Martin Lewis Money saving expert is also good to look at for these things.

Good luck.

With the credit card do the standing order trick. Basically create a standing order for last months payment but round it up (so if you paid £53 round up to £60). Then cancel the direct debit. It’ll start eating away at the debt and pay it off quicker.

Can you switch to a 0% card? Cut cut the card up as soon as you get it?

Can you over pay the loan? Just by a little?

are you being charged for the overdraft?

Can you get a new 0% card and put purchases onto that for a while and leave the cash you would have spent in your bank account? This would only work if you only put normal spends on the new card, and then hid it away once your account is topped up.
We got rid of the balance on our interest free card by paying a set amount on it, every month, on payday.

If you can't move it to a new card, I guess it's harder to see the debt reducing. Have you trawled through your expenditure to see what you could cut down?

Thank you for your replies.

The credit card is in DHs name but we share all our finances and only have the joint bank account. I like the idea of me trying to get a 0% credit card and transferring over some money from that to cover all or most of the over draft and paying the credit card off. Ant tips on where to start looking for a 0% credit card?

Also, I've told DH about the standing order trick but as it's in his name, he has to do it. Can't do that for the loan as it's set payments for that.

Last year I was in a similar position. Had a few shopping accounts, two credit cards and my overdraft lurking about costing me money in interest and generally not getting anywhere in paying them off!

I got a 0% balance transfer and money transfer credit card from MBNA and paid off everything using that. Then I just had one 'loan' to pay off and paid as much as I could consistently every month. Now I only have £300 left to pay! It was worth it and has cost me nothing in interest as my deal still stands on the credit card.

In terms of the finding good deals etc. On interest free cards, go to the money saving expert site as lists of info. There’s also a credit club there which checks your credit rating and gives advice on how to improve.

I get the trick about the doing the standing order, but rather than messing around with that, you could just increase how much is taken from your direct debit. I get your husband needs to do this and I think there may be a preference for a direct debit when paying back credit.

For the past 6 months we’ve been trying to clear off a £700 overdraft.
We had the money each month coming in so that we shouldn’t have been maxing it out every month, but we were throwing money away weekly on a few takeaways, kids clothes, sandwiches and sushi out for lunch, kids toys, coffees out daily, renting films on sky etc.
In 2 months we’ve cleared the overdraft.
We plan the big buys we need each month such as school uniform, birthday presents, 1 pair of new shoes. Once we have agreed on that then we do not deviate from the list and buy extra. If we still need something it can go on next months list.
We draw out £200 a week and this is ALL we will spend. This covers food, petrol, kids activities and anything not on the list at the start of the month.
Once this money is gone it is gone.
Obviously direct debits still go out of our bank account.
It’s surprising how little money you can live on when you’re not spending it like water.
We saved £350 per month and cleared our overdraft.

The credit card cos only want you to pay by direct debit. Because it’ll take longer to clear the balance if you’re only paying the minimum (usually a percentage) amount. My card is 5% taken as direct debit or £5 whichever is the highest.

The SO trick wipes the debt out years earlier than it would usually.