Juggling credit cards and overdraft limit- student account.

Comstock

Hello folks- I hope it is OK to open with a thread about myself?

My position is as follows

I am £700 in credit on my Co-op student account, with 8 weeks to go til I get my next money.

I calculate I need about £1000 to live off until then (As a mature student I have to live year round but I live pretty frugally)

I have an overdraft limit of £1400, and that is guarenteed. I think I'm allowed a higher limit on demand, but I don't want to go any higher. Nor do I want to switch away from co-op.

I have 2 years to go until graduation.

However I have a credit card debt with Barclaycard of £715, on which I am being charged interest at a fairly chunky 21.9%. I'm currently paying £50 a month on this.

How should I play this. Should I use some of my overdraft to pay off my credit card? Either now, or after my next loan payment?

agsnu

Ideally you should shift your balances so you are paying the least amount of interest: i.e. you should pay off your Barclaycard now, leaving you at £-15 in Co-op now. You'd then drift down to ~£-1000 before your next student loan installment, at which point you'd be back in the black on your student account. This will save you ~£25 in interest charges on your credit card.

No offence, but if you didn't figure this out on your own then credit cards probably aren't for you. Cut it up, close the account, don't use it.

Comstock

agsnu wrote: »

No offence, but if you didn't figure this out on your own then credit cards probably aren't for you. Cut it up, close the account, don't use it.

I've no wish to fall out with someone on my first day, but I don't think that was called for. I'm quite capable of doing a simple sum.

I perhaps should have made this clearer though, would it balls up my relationship with Co-op if I go £1000 overdrawn before term even starts?

Would it make more sense to do this straight after my next loan payment, for example.

Or should I talk to Co-op about switching my credit card to them, at a potentially lower rate of interest?

never-in-doubt

I'd be transferring the CC balance to a normal 0% card (look at MBNA/Virgin/M&S) and as you'll be paying 0% interest, you may as well keep your savings and pay £70pm for the next 10 months (interest free) from the spare cash you have which will then clear the new credit card before the 12mths 0% expires and you may earn enough for a free pint out of interest from your bank savings!

agsnu

never-in-doubt wrote: »

I'd be transferring the CC balance to a normal 0% card (look at MBNA/Virgin/M&S)

A student with no other source of regular income has approximately zero chance of being accepted for a 0% BT card. Not to mention, the current interest rate climate has eaten stoozing profits massively, I personally wouldn't think it's worth the hassle any more.

agsnu

Comstock wrote: »

I've no wish to fall out with someone on my first day, but I don't think that was called for. I'm quite capable of doing a simple sum.

I perhaps should have made this clearer though, would it balls up my relationship with Co-op if I go £1000 overdrawn before term even starts?

Again, it wasn't meant as an attack on your budgeting skills or mathematical ability - it's just that an awful lot of people just don't "get" credit cards and should therefore steer clear, otherwise they're setting themselves up for failure.

There is no problem with using your overdraft as long as there are regular transactions going through the account. The only time they might get uppity would be if you went over your limit, or if you just withdrew a bunch of money and then didn't touch the account for a while.

Of course there is the further consideration that overdrafts are technically repayable upon demand, so theoretically that's always a possibility that you should be aware of. Although it's unlikely that they will do anything without some provocation (over limit, lack of use, etc).

never-in-doubt

agsnu wrote: »

A student with no other source of regular income has approximately zero chance of being accepted for a 0% BT card. Not to mention, the current interest rate climate has eaten stoozing profits massively, I personally wouldn't think it's worth the hassle any more.

You cannot say this! There is absolutely no proof of such (economic climate or not!) and Tesco for one offer 0% to students. I can list a few more if u want.

agsnu

never-in-doubt wrote: »

You cannot say this! There is absolutely no proof of such (economic climate or not!) and Tesco for one offer 0% to students. I can list a few more if u want.

I looked into this when I was a student, and all of the ones you mentioned originally (MBNA, Virgin, M&S) required other sources of income. This was back in the good old days of credit card lending bonanzas, so I'd be surprised if it was any different these days.

Lokolo

Getting into more debt before second year starts is a very bad idea.

What will you do next summer? Assuming that your loan won't pay for the whole year, plus the £1000+£700+£715

Comstock

agsnu wrote: »

Again, it wasn't meant as an attack on your budgeting skills or mathematical ability - it's just that an awful lot of people just don't "get" credit cards and should therefore steer clear, otherwise they're setting themselves up for failure.
.

No offence taken, after 15 years on newsgroups and more recently blogs and discussion boards, I've got a fairly thick skin- online at least!!

Lokolo wrote: »

Getting into more debt before second year starts is a very bad idea.

What will you do next summer? Assuming that your loan won't pay for the whole year, plus the £1000+£700+£715

I agree that getting into more debt would be bad, but not quite sure what you mean about more debt? My current balance is £700 (I think it is nearer £800). I owe £715 on my credit card. I need about £1000 to live until late September (assumming I don't get anymore work-best to be pesimisstic on this count)

That will leave me £1000 in debt before the start of next year (which will actually be 3rd yr of 4), but with no other debts at all.

That is a worrying figure, but not the £2415 you seem to imply








(I am considering a year out to earn money, but obviously no point unless I can get a job)