overdraft query

timex711

hi,
i rang my local bank inquiring about getting a overdraft into my account because im starting driving. they told me they cant do it as my account is a student one, and that ill have to change my account to a current account.

thats fine as i have been working since the summer.

i make 340euro a week after taxes, i was wondering would they have any problem, when i change my account, putting a 300euro overdraft into my account?

how long does it usually take for the overdraft to be in my account?

and also, what are the main flaws of changing from student to current account?

thanks for your answers

goldenhoarde

Fees for one would be on the CA and with the student one you possibly get free banking still

300 euro OD should be doable as long as the wages are paid into the bank as this will clear the OD week to week but still allow you 340 a week

Also there are fees associated with setting up an OD and interest

drunkmonkey

If you set up the new account they'll probably give it to you. Do you really want it though, a small loan could be better if it's to start you driving, once you get an overdraft and max it out your stuck.
Try and keep the current account in the plus and use a small loan for the car.

Some info on them here http://www.nca.ie/nca/overdrafts there an expensive form of credit.

timex711

i have enough saved 900euro, and already have the car, so the overdraft is just for insurance (120 a month) and petrol. so i think ill just be safe with the overdraft to keep me ticking.

im going into change my account tomorrow, if i ask them tomorrow will they giv it to me, seeing the 900 in my account? although 500 will be taken out of that this weekend for a holiday in november.

how long does a overdraft take to activate?

Jim2007

timex711 wrote: »

i have enough saved 900euro, and already have the car, so the overdraft is just for insurance (120 a month) and petrol. so i think ill just be safe with the overdraft to keep me ticking.

An observation: borrowing money to pay regular out goings is a really bad idea, even if everyone else is doing it! Your borrowings will simply grow over time, that is always how this story ends.

coylemj

Jim2007 wrote: »

An observation: borrowing money to pay regular out goings is a really bad idea, even if everyone else is doing it! Your borrowings will simply grow over time, that is always how this story ends.

+1 when you get an OD you tend to use it up the limit, it's a mugs game because (1) you'll be paying interest (2) will not qualify for free banking and (3) once a year an official will review your OD facility which in the case of BOI attracts an annual charge of €25 so there's a triple whammy for what in your case is a relatively small overdraft.

Better to discipline yourself and stay in the black. If you need a loan to pay for a holiday or an annual expense like motor insurance, take out a term loan and make sure to pay it back before the next one comes around i.e. don't extend a loan for greater than the period of the benefit which means for car insurance or a holiday that you pay it back within 12 months.

Another benefit of doing it via a loan is that when you take out a loan and pay it back, it looks good on your credit record if you go back later for a car loan or a mortgage. If you have an OD on your current a/c and occasionally go over the limit, it will be a black mark on your credit rating.