Virgin to help with my overdraft?

mte

Hi my name is Mark and I could do with a little help...

At the minute I am overdrawn on my current account by £500. This may not seem much but each month when my wages go into my account is has gone from being £50 overdrawn, to £100, then £200 and has now got to the point of £500 (which include daily bank charges!).
There has been a lot of birthdays and christmas etc etc and things seem to be snowballing.
Last month I received a pay rise (about an extra £300 a month extra) and my rent has dropped by £300 starting next month. I want to get out of my overdraft and get back on top of things.

I read the Virgin credit card offers 0% over 16 months for balance transfers.
If I was to apply for a Virgin credit card and make a balance transfer of £500 to my current account from this, I would then be out of my overdraft and have 16 months to pay off the £500 at 0% ?
My plan is to set up a direct debit for the minimum monthly repayments on the credit card and never to use the credit card for purchases.

Once the overdraft is paid off by the credit card I should notice an increase in my wage and due to the drop of rent, allowing me to get back on top of my finances.

Does this seem like a good plan?
I also intend to use the template letter in an attempt to reclaim my bank charges over this period.

Any advice would be appreciated.

Thanks very much.

Mark

Robert_Sterling_3

Do not go deeper into the mire by getting another credit card.
Just start paying money you save from your mortgage off your existing credit card. In two months you would owe nothing.
From then on pay the full amount owed off your credit card each month.
Then open an ISA Cash account and start saving. The low mortgage payment will be increased in due course.

NickX

Robert_Sterling wrote: »

Do not go deeper into the mire by getting another credit card.

Sorry I disagree with this.

The overdraft will be charging your interest. Perhaps you can find out the precise APR. The deal from Virgin is at 0% (with a 2.98% Balance Transfer fee). Get the debt onto this and you will pay less interest, got to be a good thing.

Just remember :

(a) Once you have transferred your overdraft to a Virgin card, NEVER use that card to spend on.

(b) Do not allow you current account to go overdrawn again.

(c) Ensure you have a plan to either pay off the Virgin card or transfer it to another 0% deal BEFORE the promotional period expires.

Good Luck.

gizmo111

And claim back your bank charges.

sarahs999

I was going to do the same thing with Virgin; I'm alongstanding customer but they offered me the same deal. THe only reason I didn't, after a lot of thought, was that once that debt is on a credit card, it has to be serviced every month. If it's still on my overdraft there's no minimum that I have to pay off each month, so any unbudgeted for bills/expenses won't screw up my monthly budget. Also I already have three cards at 0% and I'm trying to reduce them.

In your situation though, if you're on top of the figures and won't be tempted to spend on the card, it seems like a fair idea.

nomoneytoday

If you have £300 extra salary plus £300 saving on rent then can't you clear a £500 overdraft within a month or two without resorting to more plastic debt?

mte

Not when I could really do with the debt clearing right now... I dont have a month or two to wait...

sparkey1

but even if you apply for credit card now, by the time you receive the card and and the transfer goes through (allow up to two weeks) its going to be March. Im guessing your paid at the end of the month and your rent is probably due at the begining so you will be debt free in 2 weeks. So whats the benefit of the transfer?

Also, if the bank are charging you unfair penalties for going overdrawn you should claim them back. Problem solved, your debt free and saving by the begining of March. In the current climate of regular job cuts don't be tempted to take on a credit card debt to benefit from miserly savings interest rates.

mte

I get paid at end of the month, as soon as my wages go in and all my other direct debits come out at the beginning of the month I will be back into my overdraft. When I am in my overdraft I cannot pay for fuel or food on my debit card, only direct debits can come out of my account, and when they do I get charged £35 each time, if I am in my overdraft.
Do you see why I could do with being out of the overdraft pretty quickly...

I am having to borrow money to pay for fuel and food etc etc.

sparkey1

ok, I can see where your coming from. Are you able to change your direct debits so they go out later in the month, or even get rid of a direct debit that you dont need.

The virgin card is initially a good offer, but dont forget they charge a 2.98% fee. They will also transfer directly to a bank account but as I said earlier it might take 3 weeks for you to recive the money. Im guessing that you have asked your bank for an overdraft and that they have refused? If not, consider speaking to them tomorrow. That might be a quicker option and will stop the hassle of having to claim back charges. Just a thought!

YorkshireBoy

Some observations:

If you're being charged £35 fees you're not in your overdraft...you're exceeding it. Have you asked the bank to extend you a larger overdraft facility?

Your monthly disposable income has just increased/is about to increase by £600, and you are only £500 overdrawn.

It could be several weeks (2-3?) before you 'see' the Virgin cash in your account...by which time your overdraft will be considerably reduced. So much so that you'll be paying a 2.98% fee for cash that will save you only 1.5% on a months debit interest.

Birthdays and Xmas happen on the same day each year...you should be budgeting for them, or telling relatives that you won't be buying them anything because whatever you buy them will cost you the price of the present PLUS £35...and that's madness!

Speaking of budgeting, you should move your direct debits back to the end of the month to minimise the debit interest incurred each month.

If you do go the Virgin card route, and I'm convinced it's not the best option for you, you must not make any purchases once you've done the SBT...unless you can clear the entire balance within the first 6 months.

You posted your OP nearly 24 hours ago. Only one person has so far supported you in your idea...everyone else seems to be trying to dissuade you from going this route. What are you going to do?