using a credit card to pay off overdraft?

stevet_2

hi all
is it possible to use a credit card balance transfer to pay off a planned overdraft?

i pay £35 in account fees and intrest on my overdraft and becuse of a 10% cut in salary i'm finding it hard to drastically reduce this overdraft

would it be of any advantage to me?

what are my other options?

CannyJock

Moggles answered about an hour ago on the Balance Transfer sticky. Applies to store cards, loans and overdrafts.

http://forums.moneysavingexpert.com/showthread.html?p=23572601#post23572601

To say whether it's worthwhile depends on amount of overdraft and the APR you're being charged. But if the £35 is a monthly fee then almost definitely yes.

EDIT: Massive disclaimer that if you go for the card and don't clear it within the 0% period you might find yourself back in the same boat.

anniecatz

surely your interest on your credit card is higher than your overdraft? you may get charged more interest for balance transfers on credit cards. or you could talk to your bank about reducing overdraft payments and going on a debt management plan with them- if you convince them you're desperate they will sometimes freeze interest or give you a longer period to pay off and a lower installment. generally speaking using a credit card to pay off debt is never a good idea because they'll fleece you somehow with interest-in my experience, could be wrong. you could get a 6month 0% intro deal on a credit card and keep moving, but you have to pay a fee and there's a lot of hassle.

CannyJock

anniecatz wrote: »

surely your interest on your credit card is higher than your overdraft? you may get charged more interest for balance transfers on credit cards. or you could talk to your bank about reducing overdraft payments and going on a debt management plan with them. generally speaking using a credit card to pay off debt is never a good idea because they'll fleece you somehow with interest.

Not quite.

0% balance transfer deals can be very useful in making massive reductions in interest charges for overdrafts, loans, store cards, catalogues and of course other credit cards.

The Virgin card that Moggles refers to in her answer (same one I'd recommend) charges a 4% fee for money transferred directly to his bank account and has no further interest for 16 months, equivalent to 3% APR.

If you can get money cheaper than 3% APR then let me know and I'll have some

stevet_2

thanks for your replies so far :T

talana

i pay £35 in account fees and intrest on my overdraft

Well you can of course change your account type so that you no longer have to pay the account fee. That would be a start, but double check first if that would affect the interest rate on the overdraft.

stevet_2

talana wrote: »

Well you can of course change your account type so that you no longer have to pay the account fee. That would be a start, but double check first if that would affect the interest rate on the overdraft.

i have recently switched my account with lloydstsb to a platinum account (i originally had a gold account)on their advice because of the £250 intrest free overdraft hoping to save a bit of money but after what someone told me in another thread i would have been better goin back to the classic account and not paid fees but an higher intrest rate i would be approx £5 amonth better off at the moment not alot i know but better in my pocket

so much for their advice :mad:

CannyJock

That'll be the platinum account where they charge you

£12 a month for the first two months. £17 thereafter.

as opposed to gold account where the charge you

£7.95 a month for the first two months. £12 thereafter.

Bargain

If you're living in overdraft, why would you let them leech money out of your current account like this? I've banked with Lloyds for over 20 years, been through their full range of accounts including these monthly fee ones. I'm now on their Classic Vantage card, costs me nothing and they pay up to 4% interest.

EDIT: Got to love how they choose the bits to highlight in their comparison table

stevet_2

CannyJock wrote: »

That'll be the platinum account where they charge you



as opposed to gold account where the charge you



Bargain

If you're living in overdraft, why would you let them leech money out of your current account like this? I've banked with Lloyds for over 20 years, been through their full range of accounts including these monthly fee ones. I'm now on their Classic Vantage card, costs me nothing and they pay up to 4% interest.

EDIT: Got to love how they choose the bits to highlight in their comparison table

the reason i would allow them to do this because i trust them to give me the best advice for me not them obviously not

as a matter of intrest would the bank allow me to change my account to a classic vantage and move my 2k overdraft with it and what would my likely intrest payments be for 2k on that account

thanks again for your answers

CannyJock

stevet wrote: »

the reason i would allow them to do this because i trust them to give me the best advice for me not them

:eek::eek::eek::eek::eek:

Still, better to realise it now than never.

stevet wrote: »

as a matter of intrest would the bank allow me to change my account to a classic vantage and move my 2k overdraft with it and what would my likely intrest payments be for 2k on that account

You need to stay in credit with a Vantage account, so no overdraft. I thought you were going for a 0% virgin card to clear the overdraft

Once the overdraft is cleared it's, just a question of the easiest way to do it.

1. Go into your online banking.
2. Press the Upgrade button, it'll give you a pop-up where they offer you a recommendation
3. Select View our other accounts to get the full range, and hopefully at the bottom of the list (on my screen anyway) is the Classic with Vantage option with a big green button to the right of it.

Yours might technically count as a "downgrade" so you might need to phone them or go into a branch.

stevet_2

thanks again jock your being very helpful as it's all abit confusing to me hence the trust i put in the banks to sort my money but hey ho as you say better late than never