advice on credit cards and overdraft

davidm_3

Hi
if anyone can provide some advice I would be enormously grateful.
Situation I have £5400.00 on Egg card, £5000 overdraft with NatWest and I have recently transferred £4600 to a natwest Platinum card on 0% for 9 months. i also have an emergency fund of £7000 in a stocks and shares ISA which has been performing well (up 20% in last year) the ISA which we keep as an emergency fund. I have recently applied for a Sainsbury's credit card and have £3500 credit limit on that to do a 0% balance transfer and my wife has applied for a platinum amex in order to have a low interest lifetime balance.

So in all we have £7k in an emergency fund and approx £15000 in debt and are paying approx £100 in interest a month with the overdraft and egg card.

I saw today that Abbey have a current account which offers to match your current overdraft, doesn't charge interest for 4 months and after that charges 10% (compared to 17% @ Natwest)

My wife is on maternity leave until March and I start a new job later this month so we may well have to use our emergency fund over the next six months to get us through until I start earning a reasonable income and my wife returns to work.

My query is should we put the emrgency fund into paying off our debts, should we go for the Abbey current account and can I keep reapplying for credit cards and swapping over to ensure I still keep the 0% balance offers?

many thanks for any advice offered and I trust my query is clear if not concise!

Edinburghlass_2

Hi David, Welcome to MSE.

Its not advisable to use your email address as your user name due to spammers picking up on email addresses on forums such as this. If you email !!!!!! they will change this for you.

Hopefully someone will be along soon to help you with your post

davidm_3

yes thanks for that - reading the information often helps - I'll get it changed.

Bargain_Rzl

Hi David,

Not sure of the CURRENT terms & conditions of the Sainsburys card (I have one, but it dates back several months) but I don't think it has a preferential rate on balance transfers I think it's mainly geared towards purchases??? Somebody please correct me if I'm wrong.

If so, all is not lost - you could do your main day-to-day spending on the Sainsburys card, using your unspent salary to pay off some of your debts. The net effect would basically be the same as a balance transfer.

Just don't combine the two (purchases & BTs on the same card) or you'll get screwed on interest!

System

My query is should we put the emrgency fund into paying off our debts

Hi David

If you think the fund will grow another 20% or so this year, then the Interest Rec'd may exceed your Interest Paid. (currently £100 per month)

My wife is on maternity leave until March and I start a new job later this month so we may well have to use our emergency fund over the next six months to get us through until I start earning a reasonable income and my wife returns to work.

You say you may have to use the Fund to subsidise you over the next 6 months, so if things are that tight, even if you did cash in the Fund, you wouldn't really be using it to pay off your debts would you?

should we go for the Abbey current account

If you let the NatWest know that you're unhappy with the interest rates they're charging and that you're thinking of moving your a/c, then they may lower your overdraft rate. You can only ask! If they won't match the rate, then I'd move.

can I keep reapplying for credit cards and swapping over to ensure I still keep the 0% balance offers?

You can apply for as many cards as you want, but if money's tight at the moment, do all you can to avoid the temptation of maxing out a new card.

See if you can get Egg to reduce your interest rate too.

Best wishes
Dave

Robert_Sterling_3

I would crystalise the gain on your ISA shares by selling £5000 of them at least and reduce the NatWest overdraft to £1.




This is not financial advice ... just the personal view of a risk averse poster.

macca64

If you switch to A&L they will match your current overdraft, and it will be 0% for 12 months, which should save on the interest costs. If you get referred by a friend you can earn an extra £50, which you can then use to repay some of the debt on a credit card.

RE: ISA - All depends on if you think the stock market is going to go up. Wouldn't like to give advise myself, so your choice.