Overdraft removal

[Panickedpineapple]

Hi,I use my overdraft every month up to its limit. I’ve done this for years. When I get paid I go into to credit for about 2 weeks before becoming overdrawn again.

I’ve had a letter suggesting that they may cancel my overdraft. If this happens suddenly I’ll be fucked and unable to pay mortgage or priority bills.

would it be worth me ringing them and asking if they could reduce it monthly at a sustainable rate?

Always worth asking.

When was the last time you looked at your budget? It may be cheaper for you to use a credit card as it is interest free for up to 56 days as long as you can pay it in full.

Is this HSBC? We've just had letters threatening to take ours away, we don't even use it very often and even then it's less than £100 (of £800). I'm not bothered financially, but the letters are rather rudely written.

Ideally we shouldn't live in our overdrafts... they are supposed to be a buffer!

Maybe it's worth having a chat with them, reducing it and also some help with budgeting

Every 18 months they’re obliged to send out a standard letter warning you of this if you use your overdraft. We’ve had many, we’re with Halifax. I actually rang them and got a bit funny with them and said I was fed up with the letters and did it mean I was actually going to lose the overdraft and they said no, they just legally had to send them. No issues since. So don’t panic. This has been going on for years with us.

Your in persistent debt using your overdraft, responsible lenders review amd send letters out, ideally you need to lower the limit and pay it off, how big is your OD?

Try to reduce it on pay day by £50 a month. You’ll pay less and less in interest and one day not need it at all.

It's one of the most expensive ways of borrowing money. If I was you I would either transfer the balance to a 0% credit card or get a personal loan and in either case pay down the balance in installments.

I agree, if you transfer the overdraft to a 0% credit card you won't pay any interest so will instantly reduce your monthly outgoings by the amount of interest charged.

Or you could even stop using your overdraft by swapping all your day to day spending to a credit card because the money stays in your account longer and you don't go into overdraft.

Look on Moneysaving Expert for advice on getting out of overdraft for more help and warnings about setting a budget and not overspending so you end up with both credit card debt and an overdraft.

If you are on a tight budget I would advise against the credit card method. It’s so easy to think you have more money and stick it on the card, you promise yourself you’ll pay more off next month and before you know it you’ve racked up a large credit card bill (personal experience of doing this and ending up with a large balance).
I think the advise to try and reduce the O/D gradually is good (assuming your lender aren’t really about to pull it).
What would be even better would be to shave a bit off and save a bit each month (even if it’s only a small amount) so that when you eventually don’t use the overdraft you also have an emergency buffer, but I appreciate that when every penny counts this can feel completely out of reach.

I had my 5-figure overdrafts removed on both Barclays accounts with a month's warning in writing saying 'my level of income did not support them'. I've not used either of them for years but have liked knowing they were there in case of an emergency. I contacted them to reconsider restoring one at least and was told that it was to do with them being legally liable to recompense me if I was scammed and that included my access to any overdraft. I told her I was annoyed by the tone of the letter after banking with them for 50yrs but she wasn't bothered. Bye bye overdrafts.