paying off overdraft with credit card - Egg Money

linell

Hi
I'm hoping someone will be able to help and offer advice.

my husband and I have 5 different current accounts with all of them being almost permanantley overdrawn. (authorised overdrafts).

bascially, 2 of these accounts are with the Halifax (750 each) so we are paying £1 per day for each account meaning charges of approx £60 per month over both accounts.
we want to move the debt onto a credit card so that we can continue paying £60 per month but will be paying the amount off rather than it being 'dead money'.

We have an Egg Money card but unfortunately cannot get a 0% or low rate card to move the debt over to.

(are you still with me??)

are we best to move the debt over to Egg money regardless of the higher APR as we would at least be paying off the amount albeit slowly!!
OR do we get a high APR card that we are almost certain to qualify for, get a cash advance off it (to pay off the overdrafts) and then pay the new debt off with the Egg card straight away? (egg have an 8.9 balance transfer deal).

sorry the question was long winded!! 8.9% on balance transfers would be quite good.....

REALLY HOPE SOMEONE CAN HELP!!!!!

apt

I think (but check) that you can do a balance transfer from Egg Money direct to your current account. The relevant condition is:

9.5 You can ask us at any time:

to pay off an amount you, or your Additional Cardholder, owes to another UK lender and transfer it to the Account, as long as the amount would not make you go over the Credit Limit, is £100 or more, and is not used to discharge your or your Additional Cardholder's indebtedness to any Group company;

to transfer (by direct bank transfer) an amount from your Account directly to a specified current account held by you or an Additional Cardholder as long as the amount transferred would not make you go over the Credit Limit and is £100 or more.


However you need a zero balance on Egg Money and not to use this credit card for purchases. This is because payments you make to Egg Money will be used to pay off the cheaper balance transfer first leaving an increasing part of your debt on the standard rate. You also need to look carefully at your fundamental financial problem of spending more than you earn. Otherwise you will just keep building up overdrafts and credit card debt.

linell

Thank you.

we have a zero balance on it and don't intend to use it for spending. the reason we got the card in the first place was to move the overdraft debt over to a 0% card but we couldn't get one of those as well! ah well.
it is possible to do a direct transfer to my current account, yes.
I was wondering more if this was the right way to go about doing things as I have no where to shift the debt onto once it is on the Egg card so I would be paying the amount off at a high rate (I think).
the plan would then be to close the 2 Halifax accounts and rid the problem from there completely! Step one in the plan to get back 'in the black'!

CLAPTON

you owe 750 each on two overdrafts i.e. 1500 in total
its costing you 60 per month

if you transfer to a CC (say eggmoney ) then you will pay interest on the egg money card depending upon your APR
so if e.g. the APR is 16.9% on the bt then you will pay approximately 1500 x 16.9% /12 per month i.e. £21.13 per month
if you choose to pay 60 per month then it would take about 30 months to clear the debt

opinions4u

Just a thought on the Halifax accounts .... could you get one overdraft of £1,500 and keep the second account in credit, and move £1k a month through both accounts?

This would reduce the cost of borrowing from £60 a month to £20 a month.

It might not be the right solution, and what you are considering appears to make sense, but it might be an alternative that allows you to focus on the other debts.

linell

good thinking though we are unable to extend the overdrafts any further. I think we need to get rid altogether and focus on getting things paid off!
I'm glad it sounds like it all makes sense though and that we're not just going to end up in a bigger mess. I know the trick is definately to get rid of the overdrafts once they are cleared! I've learnt this one!!