Is it a bad idea to get an overdraft?

Aslong as you really are all squared up with the company in question - and not trying to ignore the binding terms of a contract you signed - then you can probably claim the fees back through small claims for unauthorised charges.
 
Yea. They only billed me because someone in their office had forgotten to delete me of the subscription list, they have said that themselves. So it's not like they are claiming it to not be their fault, they just wont make up for what they have done.
 
I'm a student and have never needed an overdraft. I've had a £100 over draft put on though incase I forget to ensure money for direct debits is in as that's what got me charges last time but luckily I got them refunded. Usually I'm very good with my money.

An overdraft is effectively borrowed money and it's not a good idea to live off them unless it's your only option.
 
If you plan on using it and then paying it off straight away ( your next pay) then its ok, if however you plan to use it to pay something you dont have the money for and remain overdrawn from month to month then its a bad idea.

Look at it this way, you get an overdraft for £100, great you initially have an extra £100. You use the £!00 and your immediately £100 overdrawn ( obviously )

The following month you get paid and your immediately £100 worse off because £100 has just cleared the overdraft - great if you can afford that, if not then you just end up using your overdraft again and again and again and getting charged for its use.

In my opinion dont get one - save the money up.
 
I've been a student for 2.5 years now and have never needed an overdraft, although I went £90 in the red earlier this month the day before loans came in.
Now I have a student account, which gives me £1500 interest free overdraft so I don't have to worry about it happening again! Even if you've never needed one before, its good to have it just in case.
 
[TW]Fox;15798595 said:
If you need to ask, it probably isnt a good idea.
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That's about right. If you're responsible may as well have it though, I have an unused 7.5k overdraft which is comforting, guards against unforeseen crises
 
teulk said:
If you plan on using it and then paying it off straight away ( your next pay) then its ok, if however you plan to use it to pay something you dont have the money for and remain overdrawn from month to month then its a bad idea.

Look at it this way, you get an overdraft for £100, great you initially have an extra £100. You use the £!00 and your immediately £100 overdrawn ( obviously )

The following month you get paid and your immediately £100 worse off because £100 has just cleared the overdraft - great if you can afford that, if not then you just end up using your overdraft again and again and again and getting charged for its use.

In my opinion dont get one - save the money up.
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Or you could do what i do.

Money paid into one account monthly, no overdraft.

Set amount paid from first account into a savings account, no overdraft.

Set amount paid from first account into another account, monthly, which is used for paying bills and online purchases, with an authorized overdraft.

Just incase something goes wrong because you will get charged for an unauthorized overdraft.
 
bigredshark said:
That's about right. If you're responsible may as well have it though, I have an unused 7.5k overdraft which is comforting, guards against unforeseen crises
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Exactly. I have one - just a grand, I think - which we pay a small amount for each year.

I'd much rather have it and never use it, than need it and not have it.
 
I've never had one, but got a cc and am useless so never paid it back. Possibly lost a fortune untill now I have started paying it back. Most of the young guys here are nearly always in overdraft at the end of the month. So I say no its not, unless your desperate.
 
My Student account has a free £1000 overdraft, it's spent the last 3 years always deep in it, and the money has been in an ISA earning 5.8%, but then the rates on ISAs plummeted so I cleared the overdraft. And then trust in the Building society has dwindled so all the money is in my current account, going to put it in a higher interest account with the bank at 0.7% interest.
 
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