Overdraft.....or no to overdraft....

[RM-Taylor]

Don't do it.

I'm £6000 overdrawn combined on two different bank accounts, £4000 on one which was a joint account with the ex which will take a fair while to pay off.

 

[dingodan]

Why would you take it unless you need it for something specific?

Otherwise, if you like the idea of having and/or spending £2,000, earn and save it.

Don't think that the bank are offering you money, they are only offering you debt.

 

[Creaky]

Why would you take it unless you need it for something specific?

Otherwise, if you like the idea of having and/or spending £2,000, earn and save it.

Don't think that the bank are offering you money, they are only offering you debt.

Fair advice if you are also willing to do without credit cards.

I find an overdraft facility to be extremely useful. Very rarely used but has saved on bank charges and/or refused payments when funds have not been received when expected.

The credit line of an overdraft facility costs nothing when not used and can be treated in exactly the same way as the credit facility offered by credit cards. Neither have to be used but both are extremely useful if used properly.

 

[GoldWithFalmer]

Overdrafts if not paid back can be costly,it shows on a credit file,it can cost up to £30/month,it can also have to be paid at any time,on demand if the bank wants their money back,or they could take it from your savings account..

If you really don't need it,don't do it,if you can factor the borrowing into clearing some other more expensive debt? then clear in say 2 years,why not..

Don't just do it for the hell of it,but really it's up to you........

 

[The Modfather]

Business overdrafts incur an annual fee, but most banks will not charge for overdrafts on personal accounts, unless you go over the agreed amount. As a previous poster said, why not take a smaller overdraft, say £500.

 

[Super Steve Earle]

Here's the thing:
Personal o/d usually no charge unless used.
Shouldn't be more than monthly net income.
Should return to credit each month.
Lower rate of interest than unauthorised rate.
Reduces risk of DDs being returned for lack of funds
Useful if you have a genuine financial issue as a few days useage really won't cost that much.
It will show on your credit record, but if it generally returns to credit each month, that's a good thing. Demonstrates financial responsibility.
This in turn can help you get monthly payment plans on other things if you need to spread the cost.

Hope that helps.

 

[Deleted member 18477]

Never had an overdraft. Don't ever plan on having one. I suppose an overdraft would be a last resort if I lost my job to ensure I can pay my direct debits but luckily I've saved a few grand which is my fallback were that to happen.

I have used interest free credit cards a lot and just balance transfer to another interest free credit card when the interest free runs out. You pay a small fee to balance transfer but you maintain a healthy credit rating as long as you always make the minimum payment.

That said... Always have a plan on when and how you are going to pay off the credit card balance eventually... If used right interest free credit cards are a blessing. If used badly then you've only got yourself to blame for not being financially clever or living a life you cannot afford...

 

[Prettyboyshaw]

Spunk the lot, your a long time dead

 

[GoldWithFalmer]

Spunk the lot, your a long time dead

plan b

 

[Cheshire Cat]

I have an overdraft facility "just in case for emergencies", but I make sure I never use it. The charges are extortionate (even worse than a credit card). By all means have the approved facility in place as if the worst happens it is better than an unauthorised overdraft (which will wipe you out completely), but do everything possible NOT to use it - ever. It is credit at a price. It is NOT free money.

 

[Creaky]

I have an overdraft facility "just in case for emergencies", but I make sure I never use it. The charges are extortionate (even worse than a credit card). By all means have the approved facility in place as if the worst happens it is better than an unauthorised overdraft (which will wipe you out completely), but do everything possible NOT to use it - ever. It is credit at a price. It is NOT free money.

My overdraft attracts an interest rate of less than 12% EAR with HSBC - exactly the same as the interest rate on their credit cards.

 

[Spun Cuppa]

Banks love overdrafts. Basically, they give you a couple of grand of their money, which you spend, then continually pay interest on it monthly, and STILL owe them the two bag...

If it is for emergencies, take it out when you need it. They know people will dip into it despite best intentions...

 

[GoldWithFalmer]

My overdraft attracts an interest rate of less than 12% EAR with HSBC - exactly the same as the interest rate on their credit cards.

What do they offer if you save? Hmm,did not think so either...

 

[Normal Rob]

I cannot quite believe what a comfortable world the majority of you seem to be living in. All this advice of 'never take it unless you need it' etc is just an alien world to me. I earn a decent salary but the pressures of the modern world mean that my wife and I often live in an overdraft plus have to rely on credit cards when the occasional unexpected bill rears it head (like today when my car went bang and cost me £435 to get it going again). Take it, just don't be a **** with it.

Bloody rich southerners

 

[GoldWithFalmer]

I cannot quite believe what a comfortable world the majority of you seem to be living in. All this advice of 'never take it unless you need it' etc is just an alien world to me. I earn a decent salary but the pressures of the modern world mean that my wife and I often live in an overdraft plus have to rely on credit cards when the occasional unexpected bill rears it head (like today when my car went bang and cost me £435 to get it going again). Take it, just don't be a **** with it.

Bloody rich southerners

Your practically in France!

 

[knocky1]

My bank have offered me a £2000 overdraft on my account, the thought of having an extra 2 grand to rely on is nice but obviously it comes with a price if used...i don't have bundles of dough..but manage to survive month to month....should i take it? or leave it... genuine advice please...

Now we know your username Mr Bloom.

 

[Beach Hut]

Get an interest free credit card on purchases, far better option.

 

[Creaky]

What do they offer if you save? Hmm,did not think so either...

I don't see the relevance - I don't keep my savings with the bank.

 

[Giraffe]

Take it and then forget about it, don't use it. Much easier to get additional credit when you don't need it than when you do.

You may need it one day.

 

[GoldWithFalmer]

I don't see the relevance - I don't keep my savings with the bank.

None,other than the rates to borrow are far higher than the rates to save..