Hey there! Sign in to join this conversationNew here? Join for free
    • Thread Starter
    Offline

    17
    ReputationRep:
    Ok, say I gto a £50 interest-free overdraft. I get I can now spend up to that amount and not have to pay interest. But, once I do that, is the overdraft gone forever? If I put £50 in my bank account would I get it back or what?
    Offline

    15
    ReputationRep:
    Think of it as an IOU.

    The bank will front you £50 if you spend that money after your balance reaches zero. After you spend your overdraft your balance will be -£50. And when you put £50 back into your bank account it will return to zero.

    Student overdrafts are helpful, and at zero interest and no fees for three years and usually an extra one or two after you graduate depending on the bank, it is one of the best loans you can get it. Just make sure you pay it off, and budget properly so you aren't constantly in your overdraft.
    Offline

    19
    ReputationRep:
    there would be a time limit on it and then they'd take the money from your account as soon as its in there and if its not in there then youre gonna have to pay interest
    Offline

    2
    ReputationRep:
    You would rather not be going below zero.

    Sure there are interest free overdrafts but as soon as you go over the time limit for payment (usually 28 days), they will kill you with the interest. It's funny how they put more charges on people who have no money, it's like shooting a dead person over and over again.

    Spend money you have, if you don't have the money, don't spend it.

    There is a good saying in finance......"leverage or debt is the quickest way of becoming rich, but the most dangerous. It's the equivalent of putting a gun to your head"
    Offline

    18
    ReputationRep:
    (Original post by Swanbow)
    After you spend your overdraft your balance will be -£50.
    One top tip that I learned to my cost is that when you get a balance from an ATM or mini-statement, it won't say you have £-50. It will say you have

    £50 OD

    the OD meaning overdrawn or "Oh dear!" I misread this once expecting to see £-50 and therefore thinking I had £50 in my account. I promptly went on a spending spree that took me to £100 OD!
    Offline

    0
    ReputationRep:
    Just think of -50 as the new 0.

    Ultimately you shouldn't really be doing that. You should treat 0 to -50 as "emergency money"
    • Thread Starter
    Offline

    17
    ReputationRep:
    (Original post by Arbe)
    Just think of -50 as the new 0.

    Ultimately you shouldn't really be doing that. You should treat 0 to -50 as "emergency money"
    I've actually got £250 overdraft with it increasing to nearly £2000 in a few years, I was just using £50 as an example. Is that all really just "emergency money"?
    Offline

    15
    ReputationRep:
    (Original post by similarBlank)
    I've actually got £250 overdraft with it increasing to nearly £2000 in a few years, I was just using £50 as an example. Is that all really just "emergency money"?
    If it's a student one then feel free to spend it, as long as you have some way of paying it off within the time limit of a few years
    Offline

    18
    ReputationRep:
    (Original post by similarBlank)
    I've actually got £250 overdraft with it increasing to nearly £2000 in a few years, I was just using £50 as an example. Is that all really just "emergency money"?
    Yes....because you have to pay it back in the end.
 
 
 
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • Poll
    Brussels sprouts
    Useful resources
    How much money do you spend a week?The ultimate guide to tax!Guide to student bank accounts

    Sponsored features:

    Web Legend

    Win a Macbook Air!

    Blog about setting up a website for a chance to win in our Web Legend competition.

    Quick link:

    Unanswered money and finance threads

    Groups associated with this forum:

    View associated groups
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

    Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

    Quick reply
    Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.