Does using your agreed overdraft effect your credit rating

Simon_Wallace

I have around £800 in my current account, and I deposited a cheque for £4,000 on Friday which will take a few days to clear.

I have a credit card bill of £1,400 which I have to pay today. I see my options as

a) pay the full credit card amount and pay the £1 a day agreed overdraft charge, but potentially sully my credit record.

b) pay the minimum (or less than the full amount anyway) and incur £36.50 in interest charges for the balance (zero if fully paid)

What would mse'ers do? [I think I might get myself a WWMD bracelet made up]

It's weighing up a £5/6 charge versus a £36.50 charge but with the credit rating complication.

Any advice gratefully received.

Cheers
Simon

blueberrypie

For option (b), how are you working out the interest? Even at 20% p.a., the interest charge on £1400 only works out to a little over £5 a week.

richard9991

Simon_Wallace wrote: »

I have around £800 in my current account, and I deposited a cheque for £4,000 on Friday which will take a few days to clear.

I have a credit card bill of £1,400 which I have to pay today. I see my options as

a) pay the full credit card amount and pay the £1 a day agreed overdraft charge, but potentially sully my credit record.

b) pay the minimum (or less than the full amount anyway) and incur £36.50 in interest charges for the balance (zero if fully paid)

What would mse'ers do? [I think I might get myself a WWMD bracelet made up]

It's weighing up a £5/6 charge versus a £36.50 charge but with the credit rating complication.

Any advice gratefully received.

Cheers
Simon

As long as you stay within your agreed od limit i cant see how it can

Degenerate

Simon_Wallace wrote: »

a) pay the full credit card amount and pay the £1 a day agreed overdraft charge, but potentially sully my credit record.

Where did you get the notion that use of an agreed facility would appear negative on your record? It's a credit facilty, like any other. Yes it affects your credit record, but only in the same sense that use of your credit card is recorded there.

Simon_Wallace

blueberrypie wrote: »

For option (b), how are you working out the interest? Even at 20% p.a., the interest charge on £1400 only works out to a little over £5 a week.

Like most credit cards if I pay it off in full every month I get charged nothing, if you don't then the monthly interest fee is charged. It says on the bill itself:

Estimated Interest Amount £36.50

Cheers
Simon

blueberrypie

Clearly it's been a while since I paid interest on a credit-card...!

Are you charged interest from the date of purchases, or from the date of the bill?

I was clearly not working it out the way credit-card issuers do (no surprises there then...) - I agree with the others that as long as you're not going over your agreed overdraft limit that's probably the way to go.

Degenerate

blueberrypie wrote: »

Are you charged interest from the date of purchases, or from the date of the bill?

If you don't pay it off in full then it's interest from the day of the purchases - so even being 1p short of full payment can lead to a big hit.

Mikeyorks

Simon_Wallace wrote: »

It's weighing up a £5/6 charge versus a £36.50 charge but with the credit rating complication.

If your agreed overdraft exceeds £600 (and you require no other funds until the cheque funds are available (Wed ... Halifax? .... if paid in before 1630hrs)) ..... then the £5 (I make it £4?) is my vote.

No impact on your credit rating if you're inside the agreed o/d.