Leaving my Overdraft behind!

[Nelli]

I want to move my current account to a new bank, but I don't want to take my Overdraft. Debtline even advised me to do this and then when my old bank start chasing me for the �1500 just offer them a reasonable amount each month to pay it back! What problems could arise from doing this. It's a security issue really, my BF earns a good salary but if he loses his job the Overdraft will kill me! and I can't wait to move accounts I need to do it next month preferably...advice anyone?

[wildwood]

I don't know the circumstances of why you want to move banks, but may I suggest you make arrangements to repay the overdraft before the old bank starts chasing you. These things have a tendency to catch up with you later on, especially with financial institutions.

[andy hughes]

The best way is to approach this is to ask your new bank for a loan to pay off the OD - that way you can sever ties with your existing bank, and get your finances under control with the new bank. Most financial institutions are looking to gain new customers, but make sure you start as you mean to go on, and keep your finances as straight as you can - any problems, let them know ... in advance!

[Nelli]

Thanks Andy, 'tis a good idea! Basically the psychological effect of living in the red for most of the month is hard. The account I have now is my own, but my B/f has his wages paid in too! and the Overdraft is allowed because there are TWO large deposits made every month, if I lose my B/F's income, things could be hard....the bank could order me to pay alll up front. The reason I want to change banks, is I'm unhappy with the service and want to go to Royal Bank of Scotland (same as my family). I will try both my current bank for a loan, failing that my potential new one!

[BadBob]

One thing to remember is that Banks talk to each other. Your credit rating is made up in part from your banking history, a quick 2 minute check by your new bank will reveal all and they may not allow you to open an account with them. I know this because a friend is in a similar situation (owes a very similar amount) and he has tried many times to open a new account and he always get turned down. You may also find it difficult to get a loan for the same reason. If you wait for the bank to start asking for the money then you risk getting credit black listed and then your in real trouble. Having said all that you can do no more than ask, do as Andy suggests and try for a loan at the new bank, you would have no trouble at all getting a loan from you current bank to pay the Overdraft however but I understand you want to move on and that would delay things, good luck.

[FTVS]

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[nykkieberry]

How about moving your overdraft onto an interest free credit card - set up a standing order (as much as you can and definitely more than the minimum payment.) When your interest free period expires, move it again. This will only work if you a/ don't add to the amount on the credit card, b/ pay more than the minimum payment and c/ keep moving the debt to interest free cards until the debt is cleared. And don't be tempted to accrue another overdraft on your next bank account - you need to look at the reasons why you accrued debt in the first place and then avoid repeated behaviour. Otherwise you'll end up with a new overdraft and a maxed out credit card! Budget realistically, plan your repayments and stick to them and don't consolidate yur debt or accrue anymore! Just remember, everytime you borrow money, you borrow it from your future self. That works for me. Moneysupermarket.com is a good place to look for the right credit card.