Managing your borrowing

Many people in the UK use borrowing to boost their finances. Credit cards, loans and arranged overdrafts are all types of borrowing. Borrowing sensibly can provide a welcome relief for a financial tight spot. Or simply help you to make the most of things. But how you manage your borrowing can make a big difference to your financial health.

Received a letter about repeat use or persistent debt?
These patterns of borrowing on your arranged overdraft or credit card are expensive and may lead to financial difficulty. These tips for managing your borrowing effectively can help.

Why it's important to manage your borrowing effectively

Managing your borrowing effectively can:

  • get you out of debt faster
  • mean you pay less in interest
  • help you to avoid additional charges from late payments
  • prevent expensive patterns of borrowing like repeat use or persistent debt
  • improve your credit rating and ability to get more credit
  • stop you getting into difficulty repaying your debts
  • make it easier to cope with unexpected expenses

How to manage borrowing effectively

Keep track of everything you owe

List all the people and companies you owe money to. Include as much information as you can, including what payments are due and when.

Tools that can help you keep track.

  • Our Banking app and Internet Bank give you instant access to all your Nationwide accounts.
  • Text alerts can help you keep track of your overdraft, and spending on your Nationwide current account.

Prioritise your borrowing

Some types of borrowing have more serious consequences if you don’t keep up repayments. For example your mortgage, or repayments for a car you need to get to work. Keeping up with contracted repayments on these debts should be your priority. You can find out more about priority debts here.

Other types of borrowing such as overdrafts and credit cards are less urgent, but interest and charges will add up the longer you have them. As long as you’re on top of your priority borrowing repayments, reducing non-priority debts like these will save you money.

Make a budget

A budget will help you see what you’re spending and plan realistically. Look for ways to cut back on spending, if you can.

Tools and information to help you make a budget

Adjust your payment date
If you find you’re often short of money, you could change the date of your payments so that any important payments, such as your mortgage repayment or utility bills, are made soon after payday. This can make it easier to budget for the rest of the month. You can do this by asking companies to help you change the date your direct debit is taken and speaking to your financial provider about changing the repayment dates for your mortgage, credit card or personal loan.

Add up the costs of your borrowing

Add up the costs of each of your debts, and what your future charges are likely to be. This will show you where you can save the most money by reducing the cost of your borrowing.

Nationwide tools and information to help you add up the costs

Reduce the cost of your borrowing

Remember to keep up repayments on your priority borrowing commitments first. Then focus on finding ways to reduce the cost of the most expensive non-priority borrowing.

  1. Use any savings to pay off your debts. You’ll be paying more in interest on your debts than you’ll be earning on your savings. It’s still a good idea to keep some savings in case of unexpected expenses, such as a broken washing machine.
  2. Look for ways to cut back on spending. Even small purchases can add up over the month. The extra money you save can be used to reduce your borrowing, saving you money in interest.
  3. Avoid increasing your borrowing. Stick to your budget where you can. If you’re prone to an impulse buy, you could leave your credit card at home. Or reduce the amount of credit you have available.
  4. If possible, increase your income. If you have the option to do extra shifts or overtime, use this money to reduce your debts faster.
  5. Shop around for cheaper rates so you can move your debts and pay less interest. But look out for early repayment charges or short-term offers on interest rates which will increase later.

Information to help you reduce your Nationwide borrowing

Consider different types of borrowing

There are different types of borrowing designed to meet different needs. Using a form of borrowing in a way that it is not designed to be used can be expensive. It may make sense to switch to a different form of borrowing. We’ve made a list of the different types of borrowing to help you.

On the whole, credit cards and arranged overdrafts are designed for short term borrowing. If we notice a pattern of use of your Nationwide arranged overdraft or credit card that may not be in your interests, we'll write to you to let you know.

Repeat use on your Nationwide arranged overdraft

It's called repeat use if you're often overdrawn for most of the month. It can be a sign that you're dependent on your arranged overdraft to get by.

We’ll write to you if we think you’re falling into a repeat use pattern on your Nationwide arranged overdraft. If you’re in repeat use, try to reduce your overdraft spending as soon as possible. Arranged overdraft charges add up over time, making it harder to stop repeat use the longer it goes on. You can use the tips and tools on this page to help you get back on track.

Our overdraft calculator can show you how much you can save in charges. Either by reducing the number of days you’re overdrawn each month. Or by reducing the amount you borrow.

However, if you would prefer to speak to someone for help with repeat use or you feel you may be in financial difficulty, please call our dedicated team on 0800 328 7807. This team is open Monday – Friday 9am-5pm. When you call please have details of your income and outgoings to hand. Our income and expenditure form can help you to make a list before your call.

Persistent debt on your Nationwide credit card

Making minimum or low repayments on your credit card balance over a long period of time can result in persistent debt. This is where you're paying more in interest charges and fees than you're paying off your credit card balance. It's an expensive way to borrow. Find out more about persistent debt and how to manage it.

What to do if you're worried about money

We understand that circumstances can change and sometimes the budget is just too tight. If you’ve missed monthly payments, or are concerned about being able to afford your borrowing, then get in touch. We'll do all we can to help. You should also contact all your other lenders to discuss your repayments.

If you'd prefer some help from an independent organisation, try one of these free services: