Virgin to help with my overdraft?

jd87

I would agree with the other people above that it probably isn't the right option for your situation, but just in case you are thinking of doing it anyway, let me tell you my story:

Someone in my family has done exactly this, paid off overdraft using the virgin credit card. It is working really well for him, and we are talking a lot more than £500 too. The only way he has been able to do it though, is by letting me set it all up and letting me hold onto the card. He doesn't have the discipline to look after it all himself, he would be spending on the card if he could get his hands on it.

Only do this if you are going to be disciplined about it. Do not spend on the card. Pay as much as you can off each month to aim to get it paid within the 18 months, not just the minimum payment.

mte

I don't know what to do right now. I can see both sides to each story.
I applied for the Virgin Card yesterday and was told I would have to wat 3 - 5 days. Readin the other comments I can see your points.

I will phone Yorshire Bank today and ask them to increase my overdraft to £600. This will cover me until the end of the month, then I will see what position I am in after my Direct Debits have gone out.
I think I will do this option first, but if I am in no better position this time next month I am sure I will go the credit card route....

What are your thoughts?
Thanks for the info...

sparkey1

Dont do it mate. This website is full of people that have done what you are thinking of doing, and once they started doing it, they continued doing it. Years later they are in a bigger hole. The trouble is that credit card industry is changing. I received a letter from Virgin only this morning warning that they are going to increase the balance transfer fee to 5%.

So if you want to Balance transfer £600 it is going to cost you thirty pounds. They will then charge you interest on the balance transfer fee until the complete loan is paid off. They charge interest at the rate of the standard cared rate they give you. That is between 16.9 and 35%. In the meantime they will take a minimum repayment of £25 per month. This is credited against the 0% offer, not against the balance transfer fee. In short you will pay interest of up to 35% until the balance is paid off.

So after a year you will have paid up to potentially around £200 in fees (if they charge you 35% interest rate.)

In the meantime you could have paid for an overdraft facility (Say £30) and you would be paying interest for only the days you were using it.

I really don't understand why you dont take the advice of the majority of people that are urging you not to go the credit card route.

YorkshireBoy

sparkey1 wrote: »

They will then charge you interest on the balance transfer fee until the complete loan is paid off.

Interest on the fee is charged at the same rate as the relevant transaction, ie 0% for a 0% (S)BT.

sparkey1

I could be reading the terms and conditions incorrectly, but it says that interest is charged on fees at the standard rate for purchases. (Ie the rate for your account) Last year when I compleated a balance transfer I was paying interest and that was charged against the fee not the 0%.

jd87

I have been involved in two virgin balance transfers and neither have incurred interest on the bt fee.

sparkey1

From their website summary box.

Card purchases, balance transfers, cheque transactions, money transfers and cash transactions: we will charge interest on all transactions, fees, other charges and interest, starting on the transaction date and ending on the date you pay the bill in full. We work out interest each day so the earlier you make payment, the less interest you will have to pay.

According to the leaflet received today the interest rate applied is the same as the purchase rate for that account.

They quote a rate of 18.6% (1.4352 per month) on their website, however of course no everyone gets the rate.

As we are all aware MBNA charge different rates to different people. Although you weren't charged on a 0%, I was. The interest was charged on the fee paid at my card rate, which was about 18.9%. Note I have had the card for years and this particular rate was applied last year.

sarahs999

I've never been charged interest on a BT fee. Maybe this is the way they are going to make money out of us now though.

sparkey1

Clearly they stitched me up like a kipper!

lol

YorkshireBoy

From the (current) T&C's...

2d We will charge interest on all transactions, handling fees, and on interest you already owe, at the interest rate which applies to the relevant transaction set out in paragraph 2.

https://www.euapplyonlinenow.com/UKCCapp/Ctl/link?eid=EF3C6FB7

I've never paid interest on a BT fee on an MBNA run card.