Regular overdraft use
What do you mean by regular overdraft use?
If you’re overdrawn for most of the month over a 3 month period or more, we’d probably see this as regular overdraft use.
I’ve been using my overdraft regularly for a long time – why’s it an issue now?
We want to be a responsible lender to you and we regularly review overdraft limits to check they’re still meeting your needs. Overdrafts are meant to be for short term borrowing, and usually have higher interest rates than other borrowing products that are meant for longer term borrowing, such as a personal loan. If you’re using your overdraft regularly this could be costly so, we’ll contact you to make you aware of the potential high costs and how you might be able to avoid or reduce them. We’ll also explain other options you can consider instead of using your overdraft.
What happens if I use my Overdraft regularly?
We’ll write to you letting you know that we’ve noticed you’re using your overdraft regularly and we’ll offer some practical tips on how to reduce your overdraft use.
We’ll take another look at your account in 6 months to see if you’ve been able to reduce your overdraft use, and if not we’ll be in touch again.
If you’re still unable to reduce your overdraft use it may indicate to us that you’re experiencing some financial difficulty. It’s really important that you don’t ignore the letters and that you call our friendly team on 03455 873 951 as soon as possible, lines are open 9am – 5:30pm Monday to Sunday. Usually these situations don’t just go away, and we may consider making changes, including to your overdraft limit. If so, we’ll get in touch again to let you know what we need to do to help you reduce your borrowing.
Things you can do to reduce your overdraft use
There are some practical things you can do to help reduce your overdraft use and monthly outgoings:
- know exactly where you are with your money by regularly checking your balance via Mobile or Online Banking;
- view your monthly statement and pre-notification of charges each month and check your annual Statement of Fees to see how much interest you’re paying, you may be surprised how it adds up over time;
- visit our overdraft cost calculator to see how the cost of using your overdraft changes depending on the amount borrowed and length of time you use it;
- move money over from a savings account if you have one - you could be paying more in overdraft interest than any credit interest earned;
- set yourself a spending target and stick to it – even a small reduction in overdraft interest will save you money over time;
- check you’re not paying more on basic bills than you need to by switching to better deals – have a look at comparison websites or energy switching services;
- review what you spend each month to see if there are any non-essential things you can cut back on - even a small change can make a difference.
There is some more info about managing your finances within this website section and you can also get free independent advice from:
- StepChange Debt Charity, visit StepChange.org or call 0800 138 1111;
- The Money Advice Service, visit moneyadviceservice.org.uk or call 0300 500 5000;
- National Debtline, visit nationaldebtline.co.uk or call 0808 808 4000;
- Citizens Advice, visit citizensadvice.org.uk or call 0344 411 1444.