Is it better..

squigglebit

I was just wondering, I have a debt on a credit card and they have just upped the APR to a wopping 34.9% APR thats worse than a store card, I have approx £2000 on it, I have an overdraft of £1500 (which is in the black), is it better the pay the credit card off with my overdraft or leave it as it is?

hypno06

It depends.....

1. What is the APR on the overdraft - even agreed overdrafts often have whopping rates, it is just that we see the word "agreed" and assume that they are favourable....worth checking out.

2. Are you disciplined enough to then cancel the credit card? If not, you may find you are running the card up again as well as maxing out the overdraft!

3. Banks are having problems at the moment, and some are calling in overdraft facilities - make sure that if this happens, you are able to get through it.

4. Have you tried calling the credit card company and asking if they will reduce the rate? They may say no, but it is worth asking. You could always tell them you will take it away from them if they don't play ball.

tyllwyd

Using the overdraft isn't the only option - have you looked at getting another card with a better rate, or even getting a loan (less flexible, but at 35% interest it will be very difficult to ever get that card paid back). I'd say do your homework before you make a decision, but you do need to do something if you can.