Credit Card To Pay Off Overdraft on Current Account

LS7

Hi, i was wondering if it would work out any cheaper, I have got £600.00 overdrawn on my halifax current account and been charged £1 a day Once my wages go in at the end of the month it will be cleared but in the mean time im been charged £1 per day wondered weather to pay it off with my credit card

Thanks

Steady_Eddie_3

It will depend on how long you take pay off the overdraught. Using credit cards to pay off debt can be useful but be careful its possible you will end up paying more in interest in the long run. If you think you can clear the overdraught in a reasonable amount of time this has to be the best way. If you transfer the debt to the credit card you will firstly be charged a handling fee of around 2% and amusing you use a 0% card you will have to be disciplined to not spend on it and transfer the balance every 6-12 months. There are websites you can use to do a cost comparison on transfering debt, might be useful to do this.

Always best to stay clear of cards if you can.

stephane_2

You cannot just pay an overdraft with a credit card, you would need one that would allow Super Balance Transfer, which basically would allow you to transfer fund directly to your bank account.
The best way to pay off your overdraft is too control your spending, if you were going spend £50 less every month then your overdraft would be paid off within 12 to 14 months.

Steady_Eddie_3

stephane wrote: »

You cannot just pay an overdraft with a credit card, .

I did, not that I'm recommending it. Can't remember the name of the Card (might have been Egg? not sure) but I transfered all my balances and my overdraft.

Tixy

Steady_Eddie wrote: »

I did, not that I'm recommending it. Can't remember the name of the Card (might have been Egg? not sure) but I transfered all my balances and my overdraft.

Stephane means you can not do it with every credit card. It has to be one that allows super balance transfers, of which egg is one, the MBNA group also do, but the majority of cards do not.

OP - You'd also need to factor in the cost of the balance transfer (typically 3-4%) of the amount you transfer.

You really need to work out how soon you can pay it off in full and how many days on average you pay the £1 fee each month, then compare this to the transfer fee cost if you moved it to a credit card and check that you could pay it off before the 0% finishes. Then you should be able to work out which is cheaper.

I would say only take the card route if you can be disciplined to pay it off before the 0% finishes, not use it to buy anything else and not to run up the overdraft again.

YorkshireBoy

LS7 wrote: »

...been charged £1 a day

That figure is largely meaningless. What's more important is for how many days each month you're overdrawn?

...wondered weather to pay it off with my credit card

That'll depend on the answer to:

a) the question above
b) whether you can shift bill payments (ie utilities, council tax, etc) back to the end of the month...the day before payday would be ideal
c) the APR on your credit card
d) whether there's an existing balance on the card, and how large it is
e) whether you intend using the card for future purchases
f) which card you have (so we know the cash advance fee)
g) how long you envisage it taking to clear the debt (wherever it is)