BANKS are quick to issue charges if you overdraw your account – but some are beginning to pay you to get out of the debt.
Martin Lewis has revealed which banks are offering credit to clear your overdraft.
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Eligibility to have your overdraft cleared and have your credit improved does depend from person to person, however.
But some banks, which we’ve outlined below, are taking the initiative to help those who have outstanding overdrafts.
First Direct
This online bank is offering £175 in credit if you switch over to its account.
New customers must credit their account with £1,000 within three months.
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As a bonus, you’ll also get a £250 interest-free overdraft – if you meet certain criteria.
But the £250 interest-free overdraft has a 0% EAR, with a 39.9% AER after you cross over the £250 limit.
Martin explained: “So if you’ve an overdraft of £425 or less, the free £175 clears some and the rest is interest-free.”
Nationwide FlexDirect
If you switch to Nationwide FlexDirect, you’ll get a whopping £200 with a 0% overdraft fee for an entire year.
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You must be able to put a minimum of £1,000 into this account on a monthly basis.
To qualify for the cashback you must switch at least two direct debits across to this account using the CASS.
Martin explained: “The side of it depends on your creditworthiness, so some get more, some less.
“Ensure you clear it within the year or you’re back at 40%.”
How do I switch my current account?
You can switch current accounts in just a few steps via the Current Account Switching Service (CASS).
You just have to contact the new bank to apply for one of its accounts.
If you are accepted, they will offer to make the switch for you automatically and ask you to choose a date to do it.
Your new bank should then talk to your old one and everything will be switched across, including your balance, direct debits and salary.
After this, you will receive your new cards, log-in details and any PINS.
Other options
If you don’t match criteria for the above or aren’t looking to switch banks, don’t fret – Martin has additional advice.
He suggests switching to a 0% credit card, or for larger overdrafts, shift it to a specialist 0% money transfer card.
Martin continued: “Treat overdraft borrowing like a debt. Try to repay a set amount each month, eg, £50.
“For example, you should start the next month with a £50 smaller overdraft than the one before.”
Boosting your balance
Many banks are beginning to offer incentives which could boost your balance as Christmas is quickly approaching.
Rachel Springall has revealed how you could get as much as £200 in free cash to help with your festive finances.
Several banks and building societies have launched switching offers in recent weeks with as much as £200 free cash up for grabs.
But if you are thinking about switching and giving your bank balance a boost bear in mind these offers won’t be around forever.
All you have to do to take advantage of one of these offers is switch a current account across from your existing bank account to a new one.
There are usually conditions attached to the new current account that must be met before the cash is paid, so do check the details of the new account carefully.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Current account providers have launched some enticing perks for customers looking for a new bank account.
“Consumers who switch using the Current Account Switch Service (CASS) have a variety of free cash perks to choose from, but there are alternative accounts offering some highly attractive benefits elsewhere.
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“The right current account does depend on someone’s individual circumstances, so it’s important consumers are not swayed by free cash alone, albeit tempting in the run-up to the festive season.”
