What are my options after my 1 year post uni student overdraft with Halifax?

Skeeter · 4 May 2009 at 21:31

Hi all

I mounted up a nice £2750 overdraft in my 4 years at uni with the Halifax interest free Student Overdraft. Once I finished uni I took the Graduate Overdraft option and extended the interest free for an additional year. This is up in September. Has anyone got any experience as to what options are available after the graduate year is up? I spoke to a guy in Halifax years ago and he mentioned they can reduce it gradually or something, but Im after anyones experience. Im earning and saving pleanty to pay it all off should I need too, but Im one of those people who will keep free money for as long as possible, so if there is any way I can keep some of my interest free overdraft I will.

Cheers.

molar · 4 May 2009 at 21:36

Natwest offered me a 0% loan when my interest free overdraft came to an end.

If there's no chance of that then how about transferring it to a credit card with a 0% period while you work at paying it off? Both Virgin (16 months 0%) and M&S (6 months 0%) allow a balance transfer from a current account. The only downside is that you will get hit by a balance transfer fee.

http://www.stoozing.com/0fees.php

The reason why I gave those two examples is Virgin offers the longest 0% period and M&S offer the lowest fee.

Skeeter · 4 May 2009 at 21:42

How long was your 0% loan for?

And even if I moved the whole £2750 the Virgin card would cost £110 for 16 months interest free...

molar · 4 May 2009 at 21:46

Skeeter said:
How long was your 0% loan for?

I didn't take them up on it as I'd started earning and managed to pay off the overdraft within the period of the 3 year graduate account. I think the loan was going to be for one year.

I should have withdrawn cash up to the overdraft limit and put it into a savings account and then taken the loan!

molar · 4 May 2009 at 21:49

Yes it's rather unfortunate that balance transfer fees have recently increased and become uncapped and also savings account interest rates have reduced otherwise you would have probably been able to make a profit.

Up until a couple of months ago Ulster Bank were offering 6 months interest free with no fee at all.

Skeeter · 4 May 2009 at 21:49

3 year graduate account! Halifax only offer 1 as far as I know.

Unfortunately the benefits of withdrawing the free money and putting it in savings is gone now that my ISA is paying a massive 0.5%!

molar · 4 May 2009 at 22:00

Skeeter said:
3 year graduate account! Halifax only offer 1 as far as I know.

Unfortunately the benefits of withdrawing the free money and putting it in savings is gone now that my ISA is paying a massive 0.5%!

3 year graduate account but the interest free part of the overdraft reduced to £1000 after year one and to £500 after year two.

By the way you could earn some cash from switching your current account to Alliance & Leicester and get a free overdraft. They offer £100 for switching and an interest free overdraft which could be up to £2000 for 12 months. I did that a couple of years ago but have now moved as I wasn't happy with the customer service.

Skeeter · 4 May 2009 at 22:04

I have thought about moving as a lot of banks are keen to buy up your debt for free to get you as a customer, but ive had my Halifax account pretty much forever so the hassle in moving it would probubly outweigh the benifits.

Id be happy if Halifax offered me a reduced 0% overdraft over the next couple of years, I just dont know if they do.

molar · 4 May 2009 at 22:15

I felt the same way as you about Natwest as I'd been a customer for ages. I finally took the plunge to move and it was all pretty painless, everything sorted within about 1 months time. Unfortunately the banks show very little or no loyalty to existing customers. Read some of the horror stories over on moneysavingexpert.com forums.

If/when your income is over £1500/month get a First Direct account. Their customer service is absolutely fantastic.

HangTime · 4 May 2009 at 22:25

Shifting debts to credit cards via balance transfer isn't anywhere near as effective as it used to be as the handling fee is now usually comparable to the best net interest rates on savings.

I'd see what your bank can do for you and if they lose the 0% od then definitely look at something like the A&L account mentioned above. £100 joining bonus is great although obviously switching bank accounts can be a bit of a faff depending on what things you have setup.

The most important thing is that you are being sensible and are just milking the free OD while stashing away enough savings to cover it.

Skeeter · 4 May 2009 at 22:29

HangTime said:
Shifting debts to credit cards via balance transfer isn't anywhere near as effective as it used to be as the handling fee is now usually comparable to the best net interest rates on savings.

I'd see what your bank can do for you and if they lose the 0% od then definitely look at something like the A&L account mentioned above. £100 joining bonus is great although obviously switching bank accounts can be a bit of a faff depending on what things you have setup.

The most important thing is that you are being sensible and are just milking the free OD while stashing away enough savings to cover it.

Agreed, with my ISA paying 0.5% im not going to cover any costs by sticking the balance from a card in savings.

I am happily saving between £250 and £500 a month at the moment, which means come September I will have enough to cover the whole overdraft. I just dont fancy handing the contents of my ISA to my bank, being left with flat nothing in my bank account and flat nothing in my ISA. Id like to keep the overdraft goign so that when I do pay it off, it will be from part of my savings, not all of them. If something happened like my car exploding or something come September, and ive given all my savings to the bank, id be screwed.

mleanz1 · 5 May 2009 at 00:25

Wow nice

Skeeter · 5 May 2009 at 17:58

mleanz1 said:
Wow nice

?

platinum87 · 5 May 2009 at 18:01

Skeeter said:
How long was your 0% loan for?

And even if I moved the whole £2750 the Virgin card would cost £110 for 16 months interest free...

your balance surely isnt -£2750??

and moving it to virgin would be the best bet tbh and according to my calculations it would only cost £81.95 for 16 months interest free

HangTime said:
I'd see what your bank can do for you and if they lose the 0% od then definitely look at something like the A&L account mentioned above. £100 joining bonus is great although obviously switching bank accounts can be a bit of a faff depending on what things you have setup.

this is good too!

Skeeter · 6 May 2009 at 20:04

Yes, my overdraft is £2750 interest free, that I run to the limit while sticking £250 - £500 a month in savings. Better to have the money atleast earning 0.5% than sitting in my overdraft. Halifax now offer £3k to students I think...

Once you have the balance on a card, is transfering it to another card then just a standard balance transfer as oposed to a bank account transfer? i.e. I could transfer to Virgin as they offer transfers to bank accounts, then in 16 months I can move to any card that offers interest free on balance transfers... and so on?