Pay off overdraft with credit card?

Mrs_Boot

Completely new to this so sorry if it's a question already asked but couldn't find it anywhere. We've been living with a permanent overdraft for ages now, which doesn't look like getting any better for some time. Currently getting fleeced by the bank (between £20 and £30) every month for the privilege, which of course makes the overdraft even bigger. I'm already a cc tart and have just started with Virgin on 0% interest until October 09. They are offering cc cheque to pay off overdraft at bank. There is a fee attached to this of course, but I can only see that it will benefit us in that, although it will increase our cc monthly payments we won't be paying the bank loads of interest on the overdraft and every payment we make to Virgin will decrease the debt instead of it staying the same. We should be able to manage without getting into the same situation at the bank again as the overdraft has remained stable for some time, just hasn't gone down!

Is this a good idea or have I missed something?

NickX

Mrs_Boot wrote: »

Is this a good idea or have I missed something?

Bit of a no brainer really - clear an interest accruing debt and move to 0% :beer:

I would say definitely go for it. However a few things to be aware of :

(a) Virgin will probably charge you a one off fee for the transfer. (edit - I see you are aware of this)

(b) The first payment to Virgin will be quite high because they collect the Balance Transfer fee at that point, however after that the payments to Virgin are a fixed low amount of between £5 and £25

(c) Know exactly when the 0% promotion expires and get a plan in place to either pay this debt off before the expiry date or transfer it elsewhere.

(d) Always make the Minimum Payment and make it on time, otherwise you will breach the Terms and Conditions and they will probably remove your 0% promotion.

(e) They usually only allow you to transfer up to 95% of your Credit Limit.

Finally, Good Luck.

YorkshireBoy

NickX wrote: »

(b) The first payment to Virgin will be quite high because they collect the Balance Transfer fee at that point

Just to add, if this is going to be a problem, ie without dipping back into the overdraft, then SBT 3% more than you need to clear the overdraft.

betti911

I used my virgin card to pay off my overdraft. They did charge a fee but it was worth it for me. I am paying it back monthly (as well as some other debts). Its working pretty well but you need to be disciplined and pay it back within the interest free period.