The frustrated writer...clearing your overdraft

  "I warn you, Sir! The discourtesy of this bank is beyond all limits. One word more and I—I withdraw my overdraft."

To everyone who was wishing me well for the writing test, I was not accepted. However, I think the article was so good that my readers can enjoy and maybe benefit from it instead....

New year resolution ??...pay off your overdraft

(http://www.money.co.uk/article/1004255-how-to-pay-off-your-overdraft.htm}

Unfair overdraft fees cost Americans $24 billion a year,

Banks now have to obtain your consent ( referred to as an opt-in ) before they are able to add debit card overdraft protection to your account. Previously, customers were often signed up without their knowledge and paid dearly ...usually around $35 per overdraft

Bankers launched a heavy marketing campaign amounting to scare tactics to force people into feeling they had to say 'yes' when asked to agree to signing up for protection..When the bank pitched credit card overdraft protection they often gave the impression that not opting in could cause disruptions when using accounts. This included using emotional scare tactics such as there could be problems when making medical and health care purchases.
Account holders then opted in to the overdraft service, afraid of such things as a fee if their debit card was declined. The truth is that a declined debit card does not incur a fee, the customer simply does not get to buy the goods they want. There was also a lot of confusion over what the protection would actually cover. Many customers said that they wanted to avoid bouncing cheques, but the protection does not cover cheques, only point of sale debit card purchases and ATM transactions. Some banks are more up front about how they treat customers, Citibank for example, simply does not authorise debit card overdrafts.If the money isn't there to cover a purchase or ATM withdrawal, you don't get it..simple as that.Bank of America, now follows a similar policy with point of sale purchases.Oddly though, customers can still take money from an ATM, even when they don't have it, but at a price..they must agree twice to pay the fee of $35
There is no limit to the overdraft fees you can be charged and no law to say that they have to be reasonable and in proportion to the costs of the bank administering your overdraft.

2013 opens with the UK government in a mood of optimism, even if misplaced. Unemployment is down and according to the government, the Bank Of England thoroughly approves the savage cuts that have in many cases devastated the lives of the sick and and unemployed, by cutting their already low incomes and says that the government is on the right track in cutting the deficit and must not backtrack. On January 4^Th , it was reported in the Eurasia Review. that the . US economy gains 155,000 jobs. However, worldwide there is still a generally gloomy outlook, and for many people, unemployment , rising living costs and expenditure very close to or actually greater than income looks likely to be the situation for some time to come.

We have a very complex relationship with money, perhaps because of the very fact that ever since man (or possibly woman) discovered, way back in the caves, that they could supply something that someone else wanted , it cannot be avoided. Even too much of it, when given to the wrong people can cause huge problems eg in family disputes over wills, 'Money isn't everything but it sure keeps you in touch with your children' said J Paul Getty. However, the lack of an adequate cash flow and resulting debt is known to have serious effects, not just the practical inability to make ends meet, but in effects on mental and physical health. The Emotional Effects of Debt gives a very profound insight into the effects of living with debt including the fear and panic. This description is familiar on a daily basis to thousands throughout the world.....

The phone rings, and you don’t want to answer it because it could be a creditor. You won’t open your mail because it may contain a late bill notice. Regardless of who knocks on your door, you’re never home. You fear that you will never get out from under your financial obligations. You shun social contact, as your constant apprehension and paranoia cloud your relationships with your family, friends and co-workers. All aspects of your daily life become infected with anxiety.

Money is a factor in almost every aspect of our lives, not just paying the household bills but also in our relationships and ability to interact with family and friends.Debt is frequently described as a spiral , and it it does indeed go round and round in circles. Being in debt costs money, at a time when you can least afford it, one of the most well known examples of this are bank overdraft fees, the fee charged by banks and building societies for transactions on your account when you are not in credit ie overdrawn.Also, when you are in debt, utility services cost more at a time when you can least afford it, an example being that it is difficult and can be impossible to get a contract cell phone and are limited to expensive pre pay services.Certainly in the UK, many are forced to pay higher rates for essential gas and electricity through pre-pay meters. If y0u have no money,perhaps because you are waiting for benefit day, then if the meter has run out, you have no gas and electricity.

However, an overdraft can be one of the easier debts to clear, gradually leaving you with an increased income and making it easier to come to arrangements to clear any other debts as you organise your cash flow..If you are still thinking about some new year resolutions a good one is to end the year with your overdraft cleared

Action Plan:

The first thing to do is to face up to the problem and work out which ways you will use to solve it, since it certainly won't just go away .And like all good goals, to reach it, a plan is needed

There are now fewer options for ways to clear an overdraft, or the options available are open to fewer people and it is harder to qualify. Until recently, there were solutions such as moving to an interest free overdraft, by e.g. changing the type of bank account you have, putting the overdraft balance on to a % interest credit card, or quite often the bank would transfer the overdraft to a loan at a lower interest rate and you paid the loan rather than trying to clear the overdraft. These days such solutions in the financial markets are fewer and far more difficult to qualify for. Increasingly we are having to return to old fashioned remedies such as not spending more than we have coming in. Like in the song Do Re mi from the Sound of Music, a very good place to start is at the beginning, facing the fact that more money is being spent than we have. On the Internet can be found many excellent budget, or income and expenditure sheets..Google free budget planner and have a look through the links, you will be sure to find a format that you can work with. Be prepared for a nasty shock, if that is you are honest as you fill it in . It can be a real eye opener to see in print that what you have going out exceeds what is coming in !!!

In the UK, state benefits and the endless cuts to entitlement is in the press every day, but it is still worthwhile wherever you live, to check with your welfare offices, if you are on a low income, that there might be something you are entitled to but are not claiming. The next step is to look for ways to maximise your income

Putting your skills to good use:

If you are unemployed, even if you are not claiming and entitled to any state help, there is a wealth of help and information on the Internet to help you get a job. The first thing to do, is take a look at your skills and experience and put together a resume or CV., then post it to job boards.Register for emails for the type of work you are looking for, and network network, network. !!! If you are not using social networking sites ...Facebook, LinkedIn, Twitter, set up your profiles and follow possible employment related leads and posts.
Even if you do have a job, many are finding now that the salary just does not stretch far enough. Take a look at skills which maybe you could use in a freelance capacity eg babysitting.Even if you don't feel very confident, and debt can certainly have that effect, everyone knows something about some subject or other....even if it is sharing ways that you have coped with difficulties. Set up a blog, you don't have to pay hosting fees and other costs, there are plenty of free blogging and website platforms.Place ads on your site via joining affiliate schemes and make a little money. You won't get rich overnight but it can build up. Write about things you know about and Google get paid to write articles,or get paid to blog. The Internet is full of suggestions of ways to make a little money from home, and maybe eventually a business.


Getting into good habits
It is very likely that while clearing an overdraft, you will have to maintain the overdraft facility on your account. However, once it is cleared, close the overdraft or risk starting allover again and getting back into debt.. Clearing overdrafts and other debts, involves a rethink on how we spend money, only buying what is absolutely necessary, and going without things we don't need. Indeed we have to reconsider what we actually need.
Get into the habit of making small savings, not just economising wherever possible, eg buying cheaper brands of staples, but give yourself a feel good factor and start to see small amounts of savings building up by keeping a jar where you put your small change, and let it grow until you have enough to take to the bank.Make this the year you at least make a start to get your finances in good shape. It will do your health as much good as any diet.


Valerie Hedges



This image comes from the Project Gutenberg archives. This is an image that has come from a book or document for which the American copyright has expired and this image is in the public domain in the United States and possibly other countries.