High % APR overdraft debt moved 0% balance transfer credit card

Keane16

Hi,

First post.

Loooong time reader and fan of this site. Just wanted to ask for some clarification\advice….


I graduated a couple of years ago. And racked up some overdraft debt. Struggled for a decent job so the debt has been sitting there. Recently 2 things happened:

1. I got a decent job allowing me to pay off the debt
2. The overdrafts are no longer interest free + I'm getting charges

The debt itself is spread over 2 graduate accounts with about £970 + £721 in each (£1691 total). APR is 15% and 17.9%.

I was reading the articles on this site and thought a 0% balance transfer credit card would be the best way to go:

1. I have a 3rd account - my Lloyds TSB current account. I've never been overdrawn in this account - so I could get a credit card for this account.
2. Pay off the 2 overdrafts using the new Lloyds TSB credit card.
3. Get a 0% balance transfer card. Probably the Barclaycard as I expect to pay off the debt within a year, currently I'm paying off about £500-£600 a month. Then transfer the balance of the Lloyds TSB card to the 0% balance transfer card.
4. Pay off the 0% card over the next 3/4 months.


Would that work? IS there a better way? Any advice appreciated.

Thanks.

Happytogetdebtfree

how much a month you paying on overdraft ? ... 0% is good if you can get i know egg lerts you transfer to current accounts, make sure this is the case with the card your looking at.. because drawing cash out will not be 0% good luck

Keane16

Hi,

I currently pay off about £500\600 a month. So should clear the debt in the next 3 months. Which is why it thought a 0% balance transfer card would be best.

According to the "Top online 0% balance transfer deals" section on this site (can't link as I'm a new user ) - either NatWest, RBS or the Barclaycard Platinum are the top deals at the moment.

One of my overdrawn accounts is NatWest, so I thought it would be best going for the Barclaycard online. I've never used a credit card before so that may go against me during the credit check?

I've just looked at the Egg Card, looks good too. If I get rejected for the Barclaycard I'll try them.

because drawing cash out will not be 0% good luck

Thanks for the tip. The card will be used purely for balance transfer. I won't used it for cash withdrawals, purchases etc.


I'll apply for the Barclaycard now. If/when I'm successful I'll get a credit card sorted with Lloyds TSB.

Keane16

Okay. So I was approved for the Barclaycard.

Now I just need to know what the best method is to get the debt onto the card. I have:

A Lloyds TSB current account - never been overdrawn, no debt has ever been associated to this account. Only have a debit card though.
NatWest account - £1002 overdrawn (been hit with £30 charges since my last post )
HSBC account - £721 overdrawn
Barclaycard - with 0% balance transfers (3% charge)

NOTE: I'm going to clear the HSBC debt this pay day so we can ignore this debt. I'm only concerned about the NatWest.

I've never used credit cards before. But my plan:

- I was thinking of applying for a 2nd credit card
- Withdaraw cash on that card, so I'll need one that doesn't charge for cash withdrawals
- Pay off the NatWest account with the cash
- Transfer the balance of the 2nd credit card to the 0% barclay card


Questions I have:

1. Do any credit cards not charge for withdrawals?
2. Are there any flaws in my logic above?


Thanks.

and_breathe

I think (and I could be wrong) that you just phone barclaycard and give them the details of your overdraft and they pay it off and put it on your credit card.

Please be careful with credit cards, they sting.

Thinking about it - why don't you just have your salary paid into the Lloyds account and pay money into the Natwest account from there every month to pay off the overdraft?

Tixy

Be careful with this

You need a super balance transger card in order to transfer an overdraft to a credit card. The only banks that do these are listed here- http://www.stoozing.com/sbt.php. Other banks don't allow it and will charge you at the cash withdrawal rate (usually nearly 30%).
Those that do do it charge a one off money transfer fee, typically around 4%

Keane16

Hey,

Finally got all this sorted. Thought I'd post in case anyone with similar issues is searching and comes across this thread.

I went with the Egg Card to do the balance transfer as that allows transfers from overdrafts - 3% charge for the transfer.

So I've now got £1300 of debt on my Egg Card which will be interest free until 1st Sept 2011.

£100 a month will clear it by the time interest will be charged. The additional £4/500 a month can now go into the savings. Relieves some of the pressure as I was being hit with monthly fees.

Seems this is a really good method of managing debt for graduates who lose their interest free overdrafts a few years after graduating.



Thanks for the help! :beer: