Overdraft and Credit Card Help!

shell88 · 30 December 2013 at 3:33PM

Hi All,
I am just wondering what the best way of clearing my debt would be. I have a Vanquis credit card with a limit of £3000 which has about 34.9% interest rate and an overdraft on my current account of £2000 with about 19.9% interest rate. My question is whether i should increase my overdraft to pay off some of the credit card? I know it isnt the best idea to use debt to repay debt, but would it work out that i pay less in interest on the credit card?

Any help would be much appreciated!

Thanks

simeyb · 30 December 2013 at 4:06PM

Hello

I guess if you are between a rock and a hard place, what you suggest doing makes sense purely based on the interest rates. However, remember that the bank can pull your overdraft in its entirety (think they would have to give you 6 weeks notice or something) but the t's and c's are that they have the right to withdraw it. If you max out your overdraft, the bank are more likely to become concerned about granting you the facility, especially if your salary each month doesn't bring you back into the black for long, if at all.

Just saying, on pure interest rates alone, you're right, but it could be a risky strategy. On the basis you have a Vanquis card, I assume your access to a more mainstream 0% balance transfer card isn't available?

shell88 · 30 December 2013 at 4:14PM

Thanks for your reply! Yes a balance transfer card would have been my first choice, but with a poor credit rating I am unable to get one!

Overdraft and Credit Card Help!

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free