£2000 debt, how do I keep it interest free for 6 months?

mestone

Hello to all ferverent MoneySavers!

This question deals with several subjects, and doesn't neatly fit into any main topic (it is primarilly a debt question, but also asks questions on current accounts, overdrafts and credit cards).

This is a problem I've been using various resources to do research on, and have reached several different solutions to. I would like to now seek someone with experience and know-how to give me advice on the best way forward (either out of my plans, or something I didn't think of!). Here's my story:

I'm a recently graduated student with a Cooperative Bank Student Current Account.

This account has a £2000 interest free overdraft, which is extended for a year after I graduate (due to expire July 2009). At present, I have run this to the hilt, and my measly graduate wage doesn't even lift me out of the red every month!

At current I do not have enough liquidity to subsidise paying this off from my income, and won't do until at least August 2009 (combination of marriage and a house move, and even that is tight!). After august, I estimate I can clear this £2000 in about 6 months by saving away a certain amount from my wage each month.

So my question is, what is the best way to keep this debt interest free, or at as little expense as possible, until I have enough liquidity to start paying it off?

Here are several of my solutions - see which one you think is best:

Stick with the Co-op
The Coop will charge me 1.24%/month on overdrafts after the interest free period expires, BUT the overdraft limit will automatically reduce to £500 in June this year. They tell me my credit rating allows for this to be extended to £1,860 if i request it. Sums:

1.24% of 500 is £6.20
1.24% of 1,860 is £23

So by staying with the coop, my debt will cost me £23 a month (by paying off £140, which could be done at a stretch). If I leave my overdraft at £500 without extending it, I could shift £1500 elsewhere and pay £6.20 instead. This may be worth taking into account if i can only find another place for £1500, or if the cost of balance transefers is costly enough on the extra £500 to warrant keeping it there and paying the 6 quid.

Transfer to a different current account with 0% interest free overdraft
This method, using Alliance & Leicesters 0% interest free overdraft, would allow me to keep that debt in my current account past the July deadline. This would also give me a free £100 (a middling drop in my debt ocean). A&L offer an overdraft matching service which would allow me to do this, but I would have to get my account into the black for 15 consecutive days to qualify for this. (possibly a credit card balance transferred into my account for those 15 days, paid back then cancelled?).

Transfer the debt to a credit card using 0% balance transfer
Someone told me this was possible, though I haven't been able to find many articles on moving current account debt to a credit card (maybe i'm just being blind!).


So in conclusion, is it worth moving some debt around using various mechanisms, or should i just accept the £23 a month charge in exchange for less effort involved?

Thanks, I know it's a lengthy one, I'm one of those people that likes to lay out all the chess pieces, and think for an hour before making a move!

Any help will, of course, be gratefully appreciated. Maybe you were once in the same situation as me? How did you go about maintaining your debt in a cost-free environment before you had the resource available to pay it off?

Thanks to all who read this, and have an insight or word of wisdom they could share with me!

Matt