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Original poster

how do i get rid of my massive overdraft

16 replies

NinjaChipmunk · 22/02/2010 20:25

so i've decided to sort my finances out as they are in a state. i've applied for a 0% balance tranfer c/card (should know by tomorrow) for my 2 c/card amounts (around 5k in total) however i have a massive overdraft and i would like to do some kind of similar sideways move with it but have been told by bank 'you will be unable to transfer balances from the bank account to your credit card account. You can only transfer funds from a competitor credit card to your HSBC credit card.'
my o/draft limit is 1800 but this month i managed to somehow spend up to 2130 and will now get charged 150 because of this. would it be worth my while applying for a second 0% card with a different lender to pay this off? otherwise i can't think how to do it without getting a loan. any iedas greatly accepted.
i've asked for overtime at work and my student loan finishes next month so hopefully things will get a little easier but i want to be in control.

OP posts:

Original poster

NinjaChipmunk · 22/02/2010 20:29

actually could i pay it off with my current credit cards then do the balance transfer? or is that unethical?

OP posts:

BelleDeChocolateFluffyBunny · 22/02/2010 20:32

Have you done a full budget to work out where you are overspending too much? It's far better to clear it rather then keep changing credit cards, going over your limit can affect your credit rating so be careful. Don't have a consolidation loan from your bank for the overdraft as the interest is often higher then a loan.

expatinscotland · 22/02/2010 20:34

not really a practical thing to do.

better to see if you can negotiate a personal loan with your bank to pay it, tbh.

Original poster

NinjaChipmunk · 22/02/2010 20:39

i was doing ok financially then went on mat leave after having ds. i went back 3 days a week and was coping ok till i got made redundant and spent nearly a year out of work. i am now working agin, albeit at a much lower wage and am really playing catch up espc since christmas. the extra hours at work and what prev was taken in student loan will make me nearly 250 a month better off so hopefully i can control the overspend and have decided to take out x amount per week and live on that. i know it can be done. its just the beginning bit of getting it all in hand i'm having issues with.

OP posts:

BelleDeChocolateFluffyBunny · 22/02/2010 21:35

It's important to find out where the overspend is, have you spoken to the bank to see if they will temporarily increase your limit, then start to reduce it once the student loan is cleared?

Prosecco · 22/02/2010 21:43

Which 0% card are you transferring to> I have a Virgin one, 0% for 16 months and they are constantly sending me cheques that I can apparently pay into my bank account ( although they will charge normal interest for them after about 3 or 6 months.

Original poster

NinjaChipmunk · 22/02/2010 21:51

its the hsbc one which is 0% for 15 months for my two balance transfers. it'll be nice to be in control of them for once when this is done! its just this bloody o/draft which is bugging me. might give the bank a call tomorrow during ds's nap time to see what they can suggest. maybe a temporary increase then payment plan to reduce is a good suggestion to them. can't think what else to do. otherwise its a personal loan which i don't really want to do.

OP posts:

Prosecco · 22/02/2010 21:53

Why are you not keen on a loan?

Original poster

NinjaChipmunk · 22/02/2010 22:02

not sure, its prob the interest. i need to investigate it more i guess.

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Ivykaty44 · 22/02/2010 22:06

I would look at things that you maybe able to live without

gym membership
magazine subsription
excess insurance
swap uttilities

then your car and lifestyle

keeping a money diary may be a good way to see where your money is going every month

snowball your debts - by that it is a way of paying of the highest debt of fisrt then paying the minimum on the other debts.

Original poster

NinjaChipmunk · 22/02/2010 22:07

um, i have none of the above but yes to swapping utilities, and looking to downgrade mobile contract. i don't pay anything on the car, i just have very little money!

OP posts:

Ivykaty44 · 22/02/2010 22:13

insurance on the car -look at changing it for cheaper
life insurance
i just changed mine and saved £120 per year
I got ride of my landline and save 317 per month

it all adds up..slowly

Original poster

NinjaChipmunk · 22/02/2010 22:21

it does indeed. packed lunches will make a difference, and menu planning, and i reckon i can save a tenner a month on my mobile. don't have sky, only freeview. i'm ok in most respects i guess but last year was horrible and got me into more debt than i wanted. still onwards and upwards i suppose.

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foreverastudent · 22/02/2010 23:18

Alliance and Leicester do an interest free overdraft for a year for new customers, I transferred to this from RBS and saved a fortune.

PS £1800 isnt that huge, maybe you should increase your limit so you dont get extra charges and so can afford to pay it off sooner.

If you want to be really smart (*only do this if you trust yourself) switch money from 0% cards/accounts into a savings account and earn interest until the 0% is up. Then transfer back, keeping the interest earned as a bonus!

Original poster

NinjaChipmunk · 23/02/2010 15:41

foreverastudent, i did increase my limit today and am now budgeting for march to cover all my charges etc so that from april i can pay some off each month, and still afford food, travel, etc. i feel somewhat liberated to be taking it in hand. now just waiting to hear if my 0% c/card is accepted so i can get on with the balance tranfer. should know today/ tomorrow

OP posts:

nearlyfree · 25/02/2010 11:12

if you can't increase your overdraft or are reluctant to take a loan what about opening 2 new current accounts (with a new bank!!) one for regular outgoings, one for everyday use, neither with an overdraft... Set up a standing order from the 'bills' account to the original O/D baring account for an amount you know you can afford to pay off your o/d each month that way it will reduce and you can start afresh with new accounts!! and what ever you do don't be tempted to get an overdraft on the new account...maybe even consider going for the most basic cash account so you can't even go overdrawn and will be limited to which cash machines you use...this all worked for me and i am now, finally, o/d free and not in any debt other than my mortgage!!)0% c/c are all good and well but destroy the card as soon as it arrives (dont be tempted to use it cos you are charged interest on the new purchased and spend the rest of the time paying off as much as you can possible afford. the relief of a dissapearing balance is wonderful...oh and a handy hint for extra cash is search around your area for any market research people...if you ask enough people you will always find them!! someone told me this and i have made around £400 in 'expenses' which i squirrel away for emergencies!! :D

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