overdraft or credit cards

cat_lady_4

Hello, i'm a avid reader of this board, and had a lbm in november, did SOA etc and really reined in my spending. I am just a bit confused by the difference between APR and EAR, as i'm trying to work out whether to concentrate on paying my overdraft back, which is £389, or my much larger credit card balance of £6188. Obviously the credit card needs tackling, but i dont want to make larger payments and run into my overdraft. I tried to use the snowballed but was not sure whether an APR or EAR are interchangeable or not?
Thanks you

ps my credit card APR is on a 12% apr and my overdraft is 19.5%

Toni_Broke

Hi cat lady

How much are you planning to throw at the debts? I personally would clear the overdraft off first as its a good motivator to get the small debts out of the way. Plus it is a higher apr although obviously the cc alot bigger amount.
Not sure about EAR/APR tho, hopefully someone with the knowledge will be along soon.

Tonixx

cat_lady_4

thanks for that, yes i think clearing my overdraft will be a good motivator, i am hoping to be able to throw about two hundred pounds a month at my debts. I'll get there in the end!

Jacks_xxx

I think you can count them as equivalent if you will be in debt for a whole year, soI think the overdraft should go first.

I found these links:

http://www.guardian.co.uk/money/2007/oct/25/debt.savings

http://www.whatprice.co.uk/financial/mortgage-terms-APR.html

CLAPTON

APR refers to loan interest rate
AER refers to savings interest rate

I would suggest you concentrate on the OD as in the current climate there'e always the posssibility they may withdraw it.

Have you tried to get a low llife of balance credit card and transfer the CC debt to that?