Interest free overdraft as a loan

jiffk

Hi,

I've recently started a new job that requires a lot of driving, although i have a car its not extreamly reliable so was planning on getting a new one.

To save money i started looking around at graduate accounts (having just graduated this year) and most offer up to 2k interest free overdraft that comes down in stages after year 1 2 3 etc.

Anyway are there any dangers in using 2 of these accounts as a loan keeping the overdraft maxed out for the longest time possible and paying it off before interest charges hit?

The idea was to get my wages paid into one then transfer the money to the other (to keep the banks happy with some sort of cash flow) then out to a savings account for the interest.

Thanks for the help

grumbler

Are you aware of Martin's article: The Best Graduate Accounts 2006/07 - and the discussion thread?

jiffk

yes, i opened a rbs graduate account and posted in the forum you linked but its not really on topic or busy

My question really is what are the dangers of using an overdraft as a loan, what are the chances that the bank will call it in (as per their terms and conditions) will it damage my credit limit or chances of getting mortgaes etc for having 2 overdraft's in negative ballance for 2-3 years.

grumbler

jiffk wrote:

My question really is what are the dangers of using an overdraft as a loan, what are the chances that the bank will call it in (as per their terms and conditions)

I don't know about chances, but I think that if there are regular credits coming into accounts, chances are quite low

will it damage my credit limit or chances of getting mortgaes etc for having 2 overdraft's in negative ballance for 2-3 years.

Any available (even unused) credit affects your ability to get further credit. Any available and used credit affects this ability even more (and you cannot offset your debts with your savings when applying for new credit). Number of credit accounts and number of years don't matter. If you run these accounts properly, this could even improve your credit score.