If you’re trying to clear your HSBC overdraft, you probably know how difficult it can be to stop relying on a bank account overdraft once the habit is formed.

Although it can be a challenge to break the cycle... you’re not alone. 58% of Plum customers will be overdrawn on their current account this month, with 6% spending the entire month in 'the red'. Thankfully, there’s help at hand 🤝

Reliance on an overdraft is a stumbling-block that prevents many of us from taking control of our finances, so we decided to do something about it!

When is an overdraft a problem?

For most people, their first contact with an overdraft will have been at a relatively young age. Often in conjunction with taking a student loan 🧑‍🎓

However, with even the most basic bank accounts coming with an overdraft… temptation is never far away!

Carrying any type of debt can be incredibly stressful, but if you’re unable to keep up with repayments or overdraft charges then it’ll also be recorded on your credit report, which affects your credit score (lenders will use this to assess your eligibility for credit in the future).

Any financial whiz will likely tell you that the first step in any meaningful financial strategy is to clear debt, and that also includes free overdrafts too.

How to clear your overdraft debt

If you’re struggling to get out of your bank account overdraft, then you may find the solutions to your problem can be split into two main categories:

  1. Manage your budget: if you tend to use your overdraft because you struggle to control your spending or keep track of any direct debits and standing orders coming out of your account, then a money management app or budgeting app like Plum could help.

Plum can give you an overview of all your bank accounts and credit cards in a single view, and even calculate a real-time available balance which has been adjusted for any regular payments that are due before your next payday.

In addition diagnostic tools allow you to categorise your spending and anonymously benchmark your budget against other Plumsters in your area with a similar financial profile.

2.  Managing your debt: if you already have existing debts that you’re struggling to clear, interest charges or overdraft fees can nullify your attempts to break free. Creating a plan to tackle the debt with the highest rate of interest can help buy you some breathing space.

It could even be worth looking for a new bank / building society, or moving the balance to a (interest free) credit card or if you’re juggling multiple debts, by taking out a debt consolidation personal loan. An app like Plum can also scan the market for you to find the best deals, and can save you money on everything from personal loans to household utility bills by switching you to a better provider.

By switching to a new account with a higher arranged overdraft limit or lower interest rate, you can start paying off the balance you owe.

How Plum can help clear your HSBC overdraft

If you’d like to regularly save money that you can use to pay off your overdraft then the best time to do so is when you first get paid 💸

Plum is a money saving app with a feature that can be configured to deposit an additional lump sum to your Plum account when your salary first hits your bank… but before life has a chance to get in the way of your best intentions!

The concept of setting money aside despite being unable to repay your overdraft in full, may initially sound counter-intuitive. Especially if you’re incurring overdraft fees or overdraft interest. However, this short-term pain can hopefully mean you’re able to gain over the long-term

Once enabled (it is inactive by default), our Overdraft Savings feature allows Plum to continue making automatic savings for you, even in your overdraft.

For example, if you normally reach a bank balance of -£100 before payday, then Plum will keep making savings for you without taking you below this amount. Humans tend to be hard-wired to spend what’s available, so the idea here is that you still reach payday with the same balance... though, now with the benefit of having some money tucked-away as well 💰

This money can then be used to pay off (at least, some of) your overdraft, with a view to ultimately clearing this for good in the long-term!

We will also ensure that automatic savings will never take you over your overdraft limit, and will refund any fees incurred if we do (note: does not apply to manual deposits or Round Ups).

You can enable Overdraft Savings within the Plum app by heading to the 'brain' section within the app and tapping 'overdraft savings' 📲

What about unarranged overdrafts?

Although you may occasionally find it necessary to use an unarranged overdraft on your account, the higher fees associated with doing so mean that Plum will not continue to make automatic savings unless you have specified you wish to use the overdraft savings feature in advance ✅

If you’re struggling with problem debt then it may be worth seeking professional financial advice. Organisations such as the Citizens Advice Bureau or national debtline are there to offer support if you need it.

If you are an existing Plum user, then you can enable Overdraft Savings by heading to the 'brain' section within the app and tapping 'overdraft savings'.

If you’re trying to save money, then we have earlier articles on: regularly saving money, creating your budget, saving money fast, saving a lot of money, calculating how much to save, saving to buy a house, saving money for people who struggle, student money saving tips, saving £5,000 in a year, advice on being frugal, the best way to save money


If you’re looking for more ways to save money then cancelling any unwanted or forgotten subscription services is a great place to start! We have guides for cancelling: Audible, British Gas, BT, Equifax, Experian, G2A, GiffGaff, Grindr, HelloFresh, ID Mobile, Lycamobile, MBNA, Monzo, National Lottery, Octopus Energy, Only Fans, Prime Video, RAC, Scottish Power, Shell Energy, Sky Email, Sky Mobile, Tesco Mobile, Thames Water, Udemy, Utilita, Vimeo, Virgin Media, Voxi, Weight Watchers, YouTube Music.

You can find out more about Plum on our website.

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