Clear your overdraft for good

An estimated 18% of all overdraft holders are permanently in the red, according to a study by group buying website, groupola.com and a further 24% say they couldn't manage without their overdraft facility and need to dip into it most months.

However, while an overdraft might be a convenient form of borrowing, it's also an expensive one, so if you're too reliant on your bank account buffer, follow our six tips to reduce the sting and clear your debt for good.

1. Overdraft negotiating

If you regularly breach your agreed overdraft limit, try negotiating an extension of your overdraft limit with your bank. If it was a one-off mistake, ask for a charges refund. If you don't ask, you don't get.

2. Low-interest credit cards

Never use an overdraft as a long-term borrowing facility. With typical authorised overdraft rates currently between 18% and 19%, it makes much more sense to use a low-interest credit card.

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3. Transfer debt

Find a credit card that allows you to transfer your bank overdraft debt onto your card, like a balance transfer from another card at 0%. Some MBNA cards will allow this, but check the terms and conditions because these can change.

Best credit card rates

4. Checking balance

Check your balance regularly. Try to avoid paying by cheque as you can never be sure when the money will leave your account, making it harder to budget and overdraft limit breaches more likely.

5. Comparsion tools

Use online comparison tools to find a cheaper bank and then switch.

How to switch current accounts

6. Don't take the risk

If you simply can't help busting out of your overdraft limit, force yourself to have an account that doesn't offer an overdraft facility at all – and budget more carefully.