New to this and after some information.

Popeye84

Hello all, I have been looking over this forum for some time and picked up a lot of good tips!

Im pretty much up to scratch with my monthly spending but at the moment a few days before payday I am £200 Overdrawn and have £500 on my credit card. Both of these are well within their credit limits and I have cut them down over the last two years.

I just wanted to know if it would be better to clear my CC debt on payday and then have my debt in the overdraft. I have a nationwide flexaccount and I cant find the overdraft rates anywhere. My CC is a Nationwide gold card and I think it works out at 16.9% APR.

I know the debt isnt massive but I just want it cleared!

Thanks for your help in advance!

tbourner

Personally I would pay the CC first, if I had a big enough overdraft I'd pay all mine off now!

Popeye84

tbourner wrote: »

Personally I would pay the CC first, if I had a big enough overdraft I'd pay all mine off now!

Thanks for your thoughts.

My overdraft limit is currently £800 so it would mean potentially being £700 overdrawn but having £0 on my CC (with a limit of £6500)

I have usually split the debt between the OD and CC but want to start getting it down now.

foxgloves

The usual advice is to pay the credit card as that's usually costing you most in interest. However, if you're not brilliant at budgetting, you may find it easier to budget if your current account is in credit. Both my partner & I used to run a pretty much permanent overdraft as well as debts on cards, loans, etc, and it was clearing the overdrafts that I found made it suddenly so much easier to get the rest of our finances straight. Once you are in credit in your current account (or even just solvent at the end of each month), you can instantly see how much money you have got. Once your living expenses have gone out, then what is left is available for paying down debts. I found this also got rid of that demoralising feeling when your salary goes in at the end of each month and just disappears straight into a black hole. I'm sure lots of people will go for paying off the credit card first & I can see the point of that too, .......just wanted to give our experience as it was getting overdrafts clear at long last that turned two absolute non-budgetters into much better money managers.

david_hellier

Firstly, ask NW to confirm the OD rate. If it's less tnan your CC, then pay them off. You will now be presented with an OD that needs to be managed properly. They are notoriously difficult to reduce, so you need to budget towards their reduction.

I suggest you do a budget (see SOA sticky) and let us all advise further.

Popeye84

I just looked at my latest bank statement and it says that the Authorised Rate is 1.453% per month.

Toni_Broke

Hi another suggestion, depending how your credit rating is would be to get a 0% balance transfer and transfer both debts. We have just done this and will budget to pay it off within the 0% time. I aggree with foxgloves that getting rid of your overdraft makes things much clearer, its very difficult to stick to budgets when in your overdraft.
Good Luck
Toni xx

MrsTinks

You might find that you get charged for your overdraft BUT if you pay your card in full each month you DON'T get charged... so yes you'd be £7-800 in the red on the card the day before payday, £0 on the overdraft but it may oddly work out that by using your card as your main account for now will cost you nothing... please check your T&Cs

david_hellier

Popeye84 wrote: »

I just looked at my latest bank statement and it says that the Authorised Rate is 1.453% per month.

That's 18.9% APR. Probably better to stick with paying off CC. Set up a standing order for a fixed manageable amount. Never pay the min payment. Stop using the card. Good luck