Pay off Overdraft with a credit card?

BillBonesKnows

Morning all,

Quick question for you today if anyone knows what the situation with this is I'd be glad to hear your advice:

- I have an amount sitting in overdraft with my Nationwide account.

- I now have a 0% balance transfer card with Barclaycard.

- I plan to call Nationwide and pay off my overdraft (which is in collections currently) using my American Express credit card, then transfer the amount to my new 0% for 12 months card to avoid paying unnecessary interest.

(I will do this because I cannot just transfer the amount directly from my current account to the 0% Barclaycard)

The question is, will I be able to pay the overdraft off as a transaction using my AMEX, or would this count as a cash advance?


Thanks in advance for your input:o

NickX

BillBonesKnows wrote: »

The question is, will I be able to pay the overdraft off as a transaction using my AMEX, or would this count as a cash advance?

Very unlikely that you will be able to pay off your overdraft using an AMEX card. Sorry.

You really need a card that offers Super Balance Transfer (SBT) capability. This means that they will transfer funds directly to your current account (thereby paying off your overdraft) and treat this as a Balance Transfer.

Only certain special cards offer this facility including Egg, Post Office and any card from the MBNA stable (including the Virgin range of cards).

Most will charge a fee ranging from 2% - 4%.

BillBonesKnows

No worries, I didn't think they would...

the only thing that made me consider if this was possible was that when talking to Nationwide on the phone after they reduced my over draft limit (which is what prompted the repayment plan that I had to go on) they said "don't you have a credit card you could pay the full amount on?"

so I was thinking that as I have started the repayment plan, that now the balance would be treated differently and that I could pay it off with AMEX..

stephane_2

How much is your overdraft for because I think you could take cash out from Amex and pay off that overdraft with then transfer amex to your 0% barclaycard. Am I right we can do that?

BillBonesKnows

700 odd

Taking cash from AMEX would be charged at a rubbish rate as a cash advance so would be better if I can jsut pay Nationwide off as a normal credit card transaction...

YorkshireBoy

You must be incurring significant costs with the overdraft now?

If so, even paying around 6% (3% on the cash advance, immediately followed by 2.5-3% for the BT to Barclaycard) is likely to deliver significant savings over the Barclaycard 0% intro period (of 12 months?).

With good timing, it should be possible to minimise (eliminate even?) any high APR cash interest on Amex.

Do bear in mind though, that if Nationwide have reported negative data to the CRA's (you said the account was in collections) then the Barclaycard 0% deal may be the last decent deal you get for a while...so get it paid off ASAP.

You might want to check that Barclaycard are happy to BT from Amex before going ahead with this plan.

BillBonesKnows

not significant really - just about £10 a month at the moment, just want to get it all shunted to the 0% card to pay it off without interest...

just spoke to amex - they said that if nationwide collections will take the credit card payment then they can do it...

nationwide told me that the overdraft being on a repayment plan did not mean anything negative for my credit score, do you think they have fibbed on that?

Barclaycard said that they will transfer from AMEX so think its looking like a go-er

Moggles_2

Sounds like a plan

BillBonesKnows wrote: »

Nationwide told me that the overdraft being on a repayment plan did not mean anything negative for my credit score. Do you think they have fibbed on that?

No experience personally, but I think something's been lost in translation somewhere along the line.

If you have had to agree to a repayment plan to reduce the overdraft more gradually, then realistically you must be prepared for that to affect your credit rating, so I would settle ASAP.

Certainly, I'd check your credit reports to see what's on there before applying for any new credit facilities. (For help, see page 1 of the *How to obtain credit reports* sticky.) The status codes shown on current accounts have a different meaning from those associated with credit cards and banks vary in their use of these codes and the data they report to the credit reference agencies.

Very best
M

BillBonesKnows

no worries, yeah i did the credit check thing online - just need to cancel before the end of the month to keep it for free

yeah amex said they could do it but then nationwide wouldnt take the amex card !

nothing sever simple haha

just need to clear enough credit on my nationwide card and then do it that way

cheers,
:rotfl:

Moggles_2

Yeah i did the credit check thing online - just need to cancel before the end of the month to keep it for free.

It's too early to say for certain.

Unlike credit searches and an increasing number of online and telephone credit card applications which appear on your credit file more or less in real time, this type of data can take up to a month.

Any negative data involving your overdraft will not have been reported to the CRAs yet.